Private & Commercial Finance Group Net Income surged on 63.1% in 2016 and Revenue surged on 13.2%
09 Jun 2016 • About Private & Commercial Finance Group (
$PCF) • By InTwits
Private & Commercial Finance Group reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 16.6% in FY2016 vs. 15.4% in FY2015 vs. 11.7% in FY2012
- Private & Commercial Finance Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.1%.
- The company has business model with low profitability: ROIC is at 7.8%
- It operates with high leverage: Net Debt/EBITDA is 10.6x while industry average is -4.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Private & Commercial Finance Group ($PCF) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 52.016 | 41.370 | 42.656 | 45.293 | 51.262 | 13.2% |
| Gross Profit | 15.016 | 12.137 | 12.558 | 13.447 | 15.139 | 12.6% |
| SG&A | | | | 6.686 | 6.875 | 2.8% |
| EBITDA | 6.101 | 5.170 | 5.840 | 6.974 | 8.486 | 21.7% |
| Net Income | 0.479 | 0.574 | 0.732 | 1.614 | 2.633 | 63.1% |
Balance Sheet
|
|---|
| Cash | 0.541 | 0.530 | 0.283 | 0.139 | 0.084 | -39.6% |
| Short Term Debt | 6.390 | 7.651 | 8.570 | 11.436 | 71.879 | 528.5% |
| Long Term Debt | 72.411 | 66.627 | 72.784 | 78.521 | 18.089 | -77.0% |
Cash flow
|
|---|
| Capex | 0.021 | 0.116 | 0.008 | 0.083 | 0.038 | -54.2% |
Ratios
|
|---|
| Revenue growth | -10.2% | -20.5% | 3.1% | 6.2% | 13.2% | |
| EBITDA growth | -3.6% | -15.3% | 13.0% | 19.4% | 21.7% | |
| Gross Margin | 28.9% | 29.3% | 29.4% | 29.7% | 29.5% | -0.2% |
| EBITDA Margin | 11.7% | 12.5% | 13.7% | 15.4% | 16.6% | 1.2% |
| Net Income Margin | 0.9% | 1.4% | 1.7% | 3.6% | 5.1% | 1.6% |
| SG&A, % of revenue | | | | 14.8% | 13.4% | -1.4% |
| CAPEX, % of revenue | 0.0% | 0.3% | 0.0% | 0.2% | 0.1% | -0.1% |
| ROIC | 6.2% | 6.0% | 6.6% | 7.1% | 7.8% | 0.7% |
| ROE | 5.8% | 6.3% | 7.4% | 14.5% | 15.1% | 0.6% |
| Net Debt/EBITDA | 12.8x | 14.3x | 13.9x | 12.9x | 10.6x | -2.3x |
Revenue and profitability
The company's Revenue surged on 13.2% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 101 pp from 23.6% to -77.1% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue decreased slightly on 1.4 pp from 14.8% to 13.4% in FY2016.
Net Income marign increased slightly on 1.6 pp from 3.6% to 5.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Private & Commercial Finance Group had CAPEX/Revenue of 0.074%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 0.092%.
Return on investment
The company operates at good ROE (15.14%) while ROIC is low (7.81%). ROIC increased slightly on 0.69 pp from 7.1% to 7.8% in FY2016. ROE increased slightly on 0.65 pp from 14.5% to 15.1% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 10.6x and Debt / EBITDA is 10.6x. Net Debt / EBITDA dropped on 2.3x from 12.9x to 10.6x in FY2016. Debt showed almost no change in FY2016 while cash dropped on 39.6% in FY2016.
Valuation
The company's trades at EV/EBITDA 16.6x and P/E 19.4x while industy averages are 15.6x and 19.1x.
Appendix 1: Peers in Financial Services
Below you can find Private & Commercial Finance Group benchmarking vs. other companies in Financial Services 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Volvere ($VLE) | -47.1% | 149.8% | -23.2% | 124.9% | |
| Real Estate Credit Investments Pcc ($RECP) | | 335.8% | -59.6% | 47.3% | -29.8% |
| Fairpoint Group ($FRP) | 32.7% | -17.5% | 35.1% | 41.2% | |
| Afh Financial Group ($AFHP) | | 49.9% | 39.3% | 39.5% | |
| Manx Financial Group ($MFX) | 5.6% | 33.3% | 22.0% | 28.2% | |
| |
|---|
| Median (30 companies) | 5.5% | 14.7% | 6.8% | 2.7% | 2.3% |
|---|
| Private & Commercial Finance Group ($PCF) | | -20.5% | 3.1% | 6.2% | 13.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Record ($REC) | 98.8% | 98.8% | 99.6% | 99.3% | |
| Panmure Gordon & Co ($PMR) | 95.2% | 95.0% | 95.3% | 95.2% | |
| First Property Group ($FPO) | 86.0% | 69.5% | 67.9% | 83.0% | 80.6% |
| Schroders ($SDRC) | 76.9% | 76.2% | 77.7% | 78.3% | |
| London Capital Group Hldgs ($LCG) | 64.2% | 70.5% | 73.6% | 67.9% | |
| |
|---|
| Median (15 companies) | 56.8% | 53.3% | 53.0% | 52.8% | 63.3% |
|---|
| Private & Commercial Finance Group ($PCF) | 28.9% | 29.3% | 29.4% | 29.7% | 29.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Livermore Investments Group Ltd ($LIV) | 84.9% | 64.8% | 78.8% | 83.5% | |
| Real Estate Credit Investments Pcc ($RECP) | 58.6% | 89.3% | 77.0% | 80.3% | 79.3% |
| Manx Financial Group ($MFX) | 39.8% | 49.2% | 56.5% | 58.8% | |
| Hargreaves Lansdown ($HL.) | 64.1% | 66.4% | 58.7% | 51.2% | |
| Daishin Securities Co ($DSS) | 53.8% | 51.5% | 38.8% | 49.2% | |
| |
|---|
| Median (28 companies) | 14.9% | 17.0% | 16.8% | 16.9% | 48.0% |
|---|
| Private & Commercial Finance Group ($PCF) | 11.7% | 12.5% | 13.7% | 15.4% | 16.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| London Capital Group Hldgs ($LCG) | 1.8% | 0.2% | 3.4% | 7.7% | |
| Daishin Securities Co ($DSS) | 6.0% | 24.7% | 15.0% | 6.5% | |
| Commercial Bank Of Qatar(The) ($CBQS) | 6.0% | 3.8% | 2.8% | 3.9% | |
| Nmbz Hldgs ($NMB) | 6.1% | 3.0% | 2.1% | 3.8% | |
| Afh Financial Group ($AFHP) | 1.6% | 1.5% | 0.7% | 3.8% | |
| |
|---|
| Median (29 companies) | 1.4% | 1.4% | 1.3% | 1.2% | 1.6% |
|---|
| Private & Commercial Finance Group ($PCF) | 0.0% | 0.3% | 0.0% | 0.2% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hargreaves Lansdown ($HL.) | 108.7% | 111.7% | 101.0% | 87.5% | |
| Manx Financial Group ($MFX) | 8.0% | 19.7% | 29.7% | 40.2% | |
| Record ($REC) | 23.8% | 19.6% | 20.2% | 20.2% | |
| Impax Asset Management Group ($IPX) | -13.7% | 17.2% | 18.7% | 16.1% | |
| Lighthouse Group ($LGT) | 7.2% | -3.9% | 8.6% | 14.6% | |
| |
|---|
| Median (30 companies) | 5.2% | 6.3% | 9.2% | 7.7% | 10.6% |
|---|
| Private & Commercial Finance Group ($PCF) | 6.2% | 6.0% | 6.6% | 7.1% | 7.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| First Property Group ($FPO) | 3.6x | 3.0x | 5.6x | 12.3x | 9.4x |
| Canaccord Genuity Group Inc ($CF.) | | | | 10.2x | |
| Daishin Securities Co ($DSS) | 1.5x | 2.4x | 10.7x | 8.0x | |
| S & U ($46IE) | 1.4x | 1.3x | 1.7x | 3.1x | 0.5x |
| Livermore Investments Group Ltd ($LIV) | 3.8x | 4.6x | 3.4x | 2.5x | |
| |
|---|
| Median (25 companies) | -1.2x | -1.7x | -2.3x | -1.1x | 0.1x |
|---|
| Private & Commercial Finance Group ($PCF) | 12.8x | 14.3x | 13.9x | 12.9x | 10.6x |
