Prudential revenue dropped on 31.3% in 2015
09 Mar 2016 • About Prudential (
$PRU) • By InTwits
Prudential reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Prudential is a company in decline: 2015 revenue growth was -31.3%, 5 years revenue CAGR was -2.8%
- Prudential has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has potentially unprofitable business model: ROIC is at 0.9%
- It operates with high leverage: Net Debt/EBITDA is 7.5x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Prudential ($PRU) key annual financial indicators
mln. £ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
---|
P&L
|
---|
Revenue | 36,506 | 54,438 | 52,375 | 60,126 | 41,305 | -31.3% |
Net Income | 1,415 | 2,163 | 1,346 | 2,216 | 2,579 | 16.4% |
Balance Sheet
|
---|
Cash | 7,257 | 6,126 | 6,785 | 6,409 | 7,782 | 21.4% |
Short Term Debt | 4,312 | 3,213 | 3,047 | 3,356 | 3,292 | -1.9% |
Long Term Debt | 3,611 | 3,554 | 4,636 | 4,304 | 5,011 | 16.4% |
Cash flow
|
---|
Capex | 124 | 139 | 221 | 172 | 256 | 48.8% |
Ratios
|
---|
Revenue growth | -23.4% | 49.1% | -3.8% | 14.8% | -31.3% | |
Net Income Margin | 3.9% | 4.0% | 2.6% | 3.7% | 6.2% | 2.6% |
CAPEX, % of revenue | 0.3% | 0.3% | 0.4% | 0.3% | 0.6% | 0.3% |
ROIC | 0.8% | 1.1% | 0.6% | 0.8% | 0.9% | 0.1% |
ROE | 17.1% | 22.9% | 13.5% | 20.7% | 20.8% | 0.2% |
Revenue and profitability
Prudential's Revenue dropped on 31.3% in 2015.
Net Income marign increased on 2.6 pp from 3.7% to 6.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
Prudential's CAPEX/Revenue was 0.62% in 2015. Prudential showed almost no change in CAPEX/Revenue from 2012 to 2015. For the last three years the average CAPEX/Revenue was 0.44%.
Return on investment
The company operates at good ROE (20.83%) while ROIC is low (0.92%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt increased on 8.4% in 2015 while cash jumped on 21.4% in 2015.
Management team
The company's CEO Michael A Wells "Mike" is a founder and has spent 3 years at the company. Prudential's CFO Nicolaos Andreas Nicandrou has spent 9 years at the company.
Appendix 1: Peers in Life Insurance
Below you can find Prudential benchmarking vs. other companies in Life Insurance industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
---|
Aviva ($AV.A) | -38.8% | 40.7% | -20.4% | 25.6% | |
Shin Kong Financial Hldg Co ($SKFS) | | 2.2% | 0.8% | 21.5% | 6.2% |
Cathay Financial Hldg Co ($CFHS) | 41.4% | -25.4% | 58.9% | 14.8% | |
Standard Life ($SL.) | | 111.1% | -12.3% | -1.4% | -46.4% |
Sagicor Financial Corp ($SFI) | -25.1% | 12.7% | -2.3% | -2.8% | |
|
---|
Median (6 companies) | -25.1% | 9.5% | -0.7% | 6.7% | 4.0% |
---|
Prudential ($PRU) | | 49.1% | -3.8% | 14.8% | -31.3% |
Top companies by CAPEX/Revenue, %
Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
---|
Sagicor Financial Corp ($SFI) | 1.3% | 1.9% | 1.8% | 2.1% | |
Torchmark Corp ($TMK) | 0.2% | 0.1% | 0.3% | 0.5% | 1.0% |
Shin Kong Financial Hldg Co ($SKFS) | 0.2% | 0.4% | 0.3% | 0.4% | 0.8% |
Aviva ($AV.A) | 0.3% | 0.5% | 0.1% | 0.3% | |
Cathay Financial Hldg Co ($CFHS) | 0.2% | 1.1% | 0.3% | 0.2% | |
|
---|
Median (6 companies) | 0.2% | 0.5% | 0.3% | 0.3% | 0.8% |
---|
Prudential ($PRU) | 0.3% | 0.3% | 0.4% | 0.3% | 0.6% |
Top companies by ROIC, %
Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
---|
Torchmark Corp ($TMK) | 5.5% | 5.4% | 4.9% | 4.6% | 4.3% |
Cathay Financial Hldg Co ($CFHS) | 0.5% | 0.6% | 0.9% | 1.3% | |
Aviva ($AV.A) | 0.5% | 0.4% | 0.7% | 1.0% | |
Shin Kong Financial Hldg Co ($SKFS) | 0.6% | 0.8% | 0.8% | 0.7% | 0.5% |
Standard Life ($SL.) | 0.5% | 0.7% | 0.5% | 0.5% | 0.4% |
|
---|
Median (6 companies) | 0.5% | 0.7% | 0.8% | 1.0% | 0.5% |
---|
Prudential ($PRU) | 0.8% | 1.1% | 0.6% | 0.8% | 0.9% |