Looking for fundamental growth story? Pay attention to Damac Real Estate Development Ltd
18 Feb 2016 • About Damac Real Estate Development Ltd (
$DMC) • By InTwits
Damac Real Estate Development Ltd is a fast-growing stock in Real Estate Investment & Services industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Damac Real Estate Development Ltd showed growth in the last financial year. The company's revenue surged on 128% in FY2015. In addition to revenue Damac Real Estate Development Ltd also keeps delivering EBITDA growth. It was 163% in FY2015
In the longer period Damac Real Estate Development Ltd showed fast revenue growth of 49.8% from 2012 to 2015 annually. EBITDA surged on 76.1% from 2012 to 2015 annually.
Damac Real Estate Development Ltd ($DMC) financials for the last 5 years
| mln. AED | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|
| Revenue | 667 | 692 | 1,224 | 1,018 | 2,324 |
|---|
| Revenue growth, % | | 3.8% | 76.9% | -16.8% | 128.2% |
|---|
| Gross margin, % | 37.5% | 40.7% | 64.4% | 59.6% | 59.4% |
|---|
| SG&A, % | | | | 14.2% | 11.9% |
|---|
| EBITDA | 208 | 228 | 667 | 472 | 1,243 |
|---|
| EBITDA growth, % | | 9.3% | 193.0% | -29.2% | 163.2% |
|---|
| EBITDA margin, % | 31.2% | 32.9% | 54.5% | 46.4% | 53.5% |
|---|
| Net Income | 150 | 212 | 642 | 881 | 1,229 |
|---|
| Net Income margin, % | 22.5% | 30.7% | 52.4% | 86.5% | 52.9% |
|---|
| |
| CAPEX | 1 | 2 | 5 | 4 | 5 |
|---|
| CAPEX/Revenue, % | 0.105% | 0.303% | 0.400% | 0.393% | 0.201% |
|---|
| Debt | 104 | 104 | 111 | 720 | 1,025 |
|---|
| Cash | 94 | 119 | 578 | 1,800 | 2,587 |
|---|
| Net Debt/EBITDA | 0.1x | -0.1x | -0.7x | -2.3x | -1.3x |
|---|
| |
| ROIC, % | | 163.1% | 127.1% | 31.3% | 41.5% |
|---|
| ROE, % | | | 160.6% | 93.3% | 62.9% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. The company's EBITDA margin surged on 7.10 pp from 46.4% to 53.5% in 2015. In the longer period EBITDA margin surged on 20.6 pp from 32.9% in 2012 to 53.5% in 2015.
Damac Real Estate Development Ltd shows attractive ROIC at 41.5% for the last 12 months which assumes stable development model. During the last three years it dropped - it was 163% in FY2012. It's average level of ROIC for the last three years was 66.6%.
The company showed big decline in Net Income margin of 33.6 pp from 86.5% to 52.9% in 2015. In the longer period Net Income margin surged on 22.2 pp from 30.7% in 2012 to 52.9% in 2015.
Damac Real Estate Development Ltd operates at ROE of 62.9%. It's average level of ROE for the last three years was 106%.
Capital expenditures (CAPEX)
Damac Real Estate Development Ltd's CAPEX/Revenue was 0.201% in FY2015. The company's CAPEX/Revenue dropped on 0.103 pp from 0.303% in 2012 to 0.201% in 2015. For the last three years the average CAPEX/Revenue was 0.331%.
Leverage (Debt)
The company has negative net debt at -1.3x Net Debt/EBITDA - at the same time with high growth. If we look for the longer period Damac Real Estate Development Ltd showed fast leverage growth of 1.19x from -0.06x in 2012 to -1.26x in 2015.
Peers in Real Estate Investment & Services
Below we provide Damac Real Estate Development Ltd benchmarking against other companies in Real Estate Investment & Services industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Plaza Centers Nv ($PLAZ) | -37.7% | 28.0% | -10.0% | 131.0% | |
| Formation Group ($FRM) | | -60.8% | 147.9% | 35.8% | 199.3% |
| Etalon Group Ltd ($ETLN) | 11.9% | 18.3% | 48.4% | 29.0% | |
| Safeland ($SAF) | | 38.2% | -40.1% | 21.2% | -1.5% |
| Hml Hldgs ($HMLH) | | 12.9% | 20.8% | 15.3% | 16.7% |
| |
|---|
| Median (16 companies) | 1.6% | 4.4% | 13.0% | 3.4% | 7.6% |
|---|
| Damac Real Estate Development Ltd ($DMC) | | 3.8% | 76.9% | -16.8% | 128.2% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Arricano Real Estate ($ARO) | | | 96.1% | 96.5% | |
| Taliesin Property Fund Ltd ($TPFZ) | | 75.2% | 76.6% | 74.9% | 76.3% |
| Songbird Estates ($SBD) | 69.2% | 71.5% | 68.3% | 70.7% | |
| Panther Securities ($PNS) | 65.3% | 69.2% | 77.2% | 68.0% | |
| Hagl JSC ($HAG) | 45.2% | 27.3% | 43.2% | 40.2% | |
| |
|---|
| Median (12 companies) | 43.1% | 40.8% | 41.2% | 34.6% | 26.9% |
|---|
| Damac Real Estate Development Ltd ($DMC) | 37.5% | 40.7% | 64.4% | 59.6% | 59.4% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Summit Germany Ltd ($SMTG) | 77.8% | 78.3% | 78.7% | 89.3% | |
| Panther Securities ($PNS) | 39.9% | 44.8% | 56.9% | 50.3% | |
| Quintain Estates & Development ($QED) | -101.5% | -81.5% | -70.4% | 43.6% | 76.3% |
| Hagl JSC ($HAG) | 37.0% | 23.1% | 40.5% | 39.6% | |
| Farglory Land Development Co Ltd ($FLDS) | 33.7% | 33.5% | 31.8% | 30.2% | |
| |
|---|
| Median (15 companies) | 31.4% | 23.4% | 20.9% | 11.8% | 10.0% |
|---|
| Damac Real Estate Development Ltd ($DMC) | 31.2% | 32.9% | 54.5% | 46.4% | 53.5% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Quintain Estates & Development ($QED) | 136.2% | 210.6% | 162.3% | 217.2% | 173.3% |
| Hagl JSC ($HAG) | 152.8% | 134.2% | 171.2% | 145.6% | |
| Taliesin Property Fund Ltd ($TPFZ) | | 14.1% | 21.3% | 45.2% | 43.7% |
| Raven Russia Ltd ($RUS) | | 19.8% | 27.5% | 41.0% | 9.1% |
| Panther Securities ($PNS) | 176.0% | 87.9% | 42.6% | 26.0% | |
| |
|---|
| Median (16 companies) | 1.9% | 2.9% | 1.2% | 1.8% | 14.3% |
|---|
| Damac Real Estate Development Ltd ($DMC) | 0.1% | 0.3% | 0.4% | 0.4% | 0.2% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Etalon Group Ltd ($ETLN) | 20.1% | 12.1% | 14.4% | 14.3% | |
| PIK Group OJSC ($PIK) | 25.6% | 21.2% | 25.6% | 13.5% | |
| Hml Hldgs ($HMLH) | 5.6% | 8.2% | 9.9% | 12.5% | 12.5% |
| Farglory Land Development Co Ltd ($FLDS) | 16.0% | 9.7% | 13.0% | 7.7% | |
| Summit Germany Ltd ($SMTG) | 5.8% | 6.9% | 5.6% | 7.1% | |
| |
|---|
| Median (16 companies) | 4.6% | 3.6% | 3.0% | 2.3% | 1.8% |
|---|
| Damac Real Estate Development Ltd ($DMC) | | 163.1% | 127.1% | 31.3% | 41.5% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Raven Russia Ltd ($RUS) | | 6.4x | 4.1x | 75.5x | |
| Plaza Centers Nv ($PLAZ) | | 17.9x | | 41.9x | |
| Quintain Estates & Development ($QED) | | | | 15.3x | 4.5x |
| Hagl JSC ($HAG) | 7.5x | 13.4x | 10.5x | 14.2x | |
| London & Associated Properties ($LAS) | 10.8x | 40.8x | 11.1x | 13.0x | |
| |
|---|
| Median (12 companies) | 7.9x | 8.2x | 7.3x | 11.0x | 1.2x |
|---|
| Damac Real Estate Development Ltd ($DMC) | 0.1x | -0.1x | -0.7x | -2.3x | -1.3x |
