Grafenia Net Income dropped on 92.5% in 2016 and Revenue decreased on 2.3%
08 Jun 2016 • About Grafenia (
$GRA) • By InTwits
Grafenia reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Grafenia is a company in decline: FY2016 revenue growth was -2.3%, 5 years revenue CAGR was -8.7%
- Grafenia has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 2.1%.
- CAPEX is quite volatile: 0.44 in FY2016, 0.17 in FY2015, 0.21 in FY2014, 0.30 in FY2013, 0.18 in FY2012
- The company has unprofitable business model: ROIC is at -4.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Grafenia ($GRA) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 21.768 | 20.664 | 19.443 | 11.024 | 10.766 | -2.3% |
| Gross Profit | 11.634 | 11.211 | 10.904 | 7.805 | 7.135 | -8.6% |
| EBITDA | 3.402 | 2.809 | 2.650 | 2.178 | 1.213 | -44.3% |
| Net Income | 1.100 | 0.805 | 0.863 | 0.848 | 0.064 | -92.5% |
Balance Sheet
|
|---|
| Cash | 1.874 | 1.417 | 1.401 | 1.277 | 0.686 | -46.3% |
| Short Term Debt | 0.080 | 0.023 | 0.000 | 0.000 | 0.066 | |
| Long Term Debt | 0.023 | 0.000 | 0.000 | 0.000 | 0.264 | |
Cash flow
|
|---|
| Capex | 0.183 | 0.303 | 0.214 | 0.172 | 0.438 | 154.7% |
Ratios
|
|---|
| Revenue growth | 27.9% | -5.1% | -5.9% | -43.3% | -2.3% | |
| EBITDA growth | 18.3% | -17.4% | -5.7% | -17.8% | -44.3% | |
| Gross Margin | 53.4% | 54.3% | 56.1% | 70.8% | 66.3% | -4.5% |
| EBITDA Margin | 15.6% | 13.6% | 13.6% | 19.8% | 11.3% | -8.5% |
| Net Income Margin | 5.1% | 3.9% | 4.4% | 7.7% | 0.6% | -7.1% |
| CAPEX, % of revenue | 0.8% | 1.5% | 1.1% | 1.6% | 4.1% | 2.5% |
| ROIC | 17.2% | 17.3% | 13.4% | 8.3% | -4.0% | -12.3% |
| ROE | 17.2% | 13.2% | 14.7% | 14.4% | 1.1% | -13.3% |
| Net Debt/EBITDA | -0.5x | -0.5x | -0.5x | -0.6x | -0.3x | 0.3x |
Revenue and profitability
Grafenia's Revenue decreased on 2.3% in FY2016. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 8.5 pp from 19.8% to 11.3% in FY2016.
Gross Margin decreased on 4.5 pp from 70.8% to 66.3% in FY2016.
Net Income marign decreased on 7.1 pp from 7.7% to 0.59% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 4.1%. The company showed CAPEX/Revenue growth of 2.6 pp from 1.5% in FY2013 to 4.1% in FY2016. Average CAPEX/Revenue for the last three years was 2.2%.
Return on investment
The company operates at negative ROIC (-4.00%) and low but positive ROE (1.14%). ROIC dropped on 12.3 pp from 8.3% to -4.0% in FY2016. ROE dropped on 13.3 pp from 14.4% to 1.1% in FY2016.
Leverage (Debt)
Debt level is -0.3x Net Debt / EBITDA and 0.3x Debt / EBITDA. Net Debt / EBITDA surged on 0.3x from -0.6x to -0.3x in FY2016. Debt surged while cash dropped on 46.3% in FY2016.
Appendix 1: Peers in Support Services
Below we provide Grafenia benchmarking against other companies in Support 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Camco Clean Energy ($CCE) | | 88.0% | -54.7% | 99.4% | |
| Optimal Payments ($OPAY) | 39.9% | 41.5% | 44.0% | 68.1% | |
| Inspired Energy ($INSE) | 83.8% | 44.8% | 42.2% | 40.2% | |
| 21St Century Technology ($C21) | 0.1% | -22.8% | -16.6% | 35.5% | |
| Ibex Global Solutions ($IBEX) | 7.4% | 35.7% | 30.0% | 29.8% | |
| |
|---|
| Median (54 companies) | 5.9% | 8.0% | 5.0% | 6.7% | 1.7% |
|---|
| Grafenia ($GRA) | | -5.1% | -5.9% | -43.3% | -2.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Inspired Energy ($INSE) | 94.6% | 86.8% | 78.7% | 76.2% | |
| Ienergizer Ltd ($IBPO) | 56.2% | 78.4% | 76.8% | 72.7% | |
| Vianet Group ($VNET) | 53.3% | 51.3% | 58.8% | 69.2% | 70.1% |
| Prime People ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | |
| Murgitroyd Group ($MUR) | 58.4% | 61.4% | 57.6% | 55.4% | |
| |
|---|
| Median (48 companies) | 28.2% | 28.5% | 29.2% | 28.6% | 26.3% |
|---|
| Grafenia ($GRA) | 53.4% | 54.3% | 56.1% | 70.8% | 66.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($C21) | 13.4% | -0.2% | 36.0% | 44.8% | |
| Northgate ($67GX) | 41.2% | 40.4% | 40.6% | 39.4% | 38.3% |
| Inspired Energy ($INSE) | 46.2% | 48.5% | 1.5% | 35.4% | |
| Vianet Group ($VNET) | 18.6% | 17.3% | 19.7% | 27.1% | 22.1% |
| Vp ($VP.) | 23.9% | 24.5% | 24.2% | 26.2% | 28.4% |
| |
|---|
| Median (54 companies) | 6.7% | 6.3% | 6.8% | 7.2% | 7.3% |
|---|
| Grafenia ($GRA) | 15.6% | 13.6% | 13.6% | 19.8% | 11.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($VP.) | 21.4% | 17.7% | 21.6% | 25.7% | 24.1% |
| Sagentia Group ($SAG) | 1.9% | 1.4% | 1.5% | 25.2% | |
| Nature Group ($NGR) | 14.3% | 7.2% | 5.6% | 22.9% | |
| Augean ($AUG) | 9.8% | 15.9% | 12.3% | 12.3% | |
| Falkland Islands Hldgs ($FKL) | 3.7% | 6.8% | 12.9% | 11.9% | |
| |
|---|
| Median (54 companies) | 1.1% | 1.1% | 1.0% | 1.1% | 1.2% |
|---|
| Grafenia ($GRA) | 0.8% | 1.5% | 1.1% | 1.6% | 4.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($C21) | 20.3% | -2.9% | 45.6% | 111.0% | |
| Inspired Energy ($INSE) | 63.9% | 65.5% | -7.5% | 28.0% | |
| Petards Group ($PEG) | 35.5% | -78.0% | 24.7% | 23.9% | |
| Servoca ($SVCA) | 1.0% | 7.8% | 14.9% | 22.3% | |
| Rtc Group ($RTC) | 14.6% | 17.6% | 19.9% | 22.2% | |
| |
|---|
| Median (54 companies) | 9.5% | 7.8% | 9.3% | 10.3% | 10.5% |
|---|
| Grafenia ($GRA) | 17.2% | 17.3% | 13.4% | 8.3% | -4.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($RHL) | 22.8x | 5.8x | 6.6x | 16.8x | |
| Mitsubishi Corp ($MBC) | 9.9x | 15.9x | 14.3x | 12.5x | 25.0x |
| Ienergizer Ltd ($IBPO) | 6.3x | 2.8x | 3.0x | 4.0x | |
| Ceps ($CEPS) | | 3.0x | 6.6x | 3.8x | |
| Kellan Group(The ($KLN) | | | 6.5x | 3.6x | |
| |
|---|
| Median (50 companies) | 0.8x | 0.7x | 0.6x | 0.4x | 1.2x |
|---|
| Grafenia ($GRA) | -0.5x | -0.5x | -0.5x | -0.6x | -0.3x |
