Dee Valley Group Net Income jumped on 33.4% in 2016 and EBITDA Margin showed almost no change
10 Jun 2016 • About Dee Valley Group (
$DVW) • By InTwits
Dee Valley Group reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Dee Valley Group has high CAPEX intensity: 5 year average CAPEX/Revenue was 35.7%. At the same time it's a lot of higher than industry average of 21.7%.
- CAPEX is quite volatile: 5.6 in FY2016, 6.7 in FY2015, 6.7 in FY2014, 15.2 in FY2013, 7.1 in FY2012
- The company has potentially unprofitable business model: ROIC is at 6.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 4.4x while industry average is 4.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Dee Valley Group ($DVW) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 22.100 | 22.807 | 23.787 | 24.599 | 23.149 | -5.9% |
| Gross Profit | 21.444 | 22.095 | 23.073 | 23.834 | 22.342 | -6.3% |
| EBITDA | 12.466 | 12.203 | 12.012 | 12.112 | 11.364 | -6.2% |
| Net Income | 3.926 | 3.886 | 5.664 | 3.490 | 4.655 | 33.4% |
Balance Sheet
|
|---|
| Cash | 9.563 | 8.153 | 8.226 | 8.737 | 3.099 | -64.5% |
| Short Term Debt | 1.689 | 7.585 | 7.639 | 7.391 | 1.263 | -82.9% |
| Long Term Debt | 47.473 | 48.966 | 50.500 | 51.772 | 52.297 | 1.0% |
Cash flow
|
|---|
| Capex | 7.069 | 15.249 | 6.687 | 6.725 | 5.626 | -16.3% |
Ratios
|
|---|
| Revenue growth | 3.5% | 3.2% | 4.3% | 3.4% | -5.9% | |
| EBITDA growth | 8.7% | -2.1% | -1.6% | 0.8% | -6.2% | |
| Gross Margin | 97.0% | 96.9% | 97.0% | 96.9% | 96.5% | -0.4% |
| EBITDA Margin | 56.4% | 53.5% | 50.5% | 49.2% | 49.1% | -0.1% |
| Net Income Margin | 17.8% | 17.0% | 23.8% | 14.2% | 20.1% | 5.9% |
| CAPEX, % of revenue | 32.0% | 66.9% | 28.1% | 27.3% | 24.3% | -3.0% |
| ROIC | 8.2% | 7.9% | 7.5% | 7.4% | 6.4% | -1.0% |
| ROE | 16.4% | 15.5% | 21.4% | 12.3% | 15.1% | 2.8% |
| Net Debt/EBITDA | 3.2x | 4.0x | 4.2x | 4.2x | 4.4x | 0.3x |
Revenue and profitability
Dee Valley Group's Revenue decreased on 5.9% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.7 pp from 8.0% to 11.7% in FY2016.
Gross Margin showed almost no change in FY2016.
Net Income marign increased on 5.9 pp from 14.2% to 20.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Dee Valley Group's CAPEX/Revenue was 24.3% in FY2016. Dee Valley Group showed big decline in CAPEX/Revenue of 42.6 pp from 66.9% in FY2013 to 24.3% in FY2016. Average CAPEX/Revenue for the last three years was 26.6%.
Return on investment
The company operates at good ROE (15.10%) while ROIC is low (6.36%). ROIC decreased slightly on 1.0 pp from 7.4% to 6.4% in FY2016. ROE increased on 2.8 pp from 12.3% to 15.1% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.4x and Debt / EBITDA is 4.7x. Net Debt / EBITDA surged on 0.3x from 4.2x to 4.4x in FY2016. Debt decreased on 9.5% in FY2016 while cash dropped on 64.5% in FY2016.
Appendix 1: Peers in Gas, Water & Multiutilities
Below we provide Dee Valley Group benchmarking against other companies in Gas, Water & Multiutilities 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Inter RAO JSC ($IRAO) | 3.7% | 19.1% | 11.9% | 12.3% | |
| National Grid ($NG.) | | 3.8% | 3.1% | 2.6% | -0.6% |
| United Utilities Group ($UU.) | | 4.5% | 3.2% | 1.9% | 0.6% |
| |
|---|
| Median (3 companies) | 3.7% | 4.5% | 3.2% | 2.6% | 0.0% |
|---|
| Dee Valley Group ($DVW) | | 3.2% | 4.3% | 3.4% | -5.9% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| United Utilities Group ($UU.) | 56.8% | 56.9% | 57.3% | 58.5% | 53.8% |
| National Grid ($NG.) | 34.9% | 35.6% | 34.8% | 34.7% | 37.7% |
| Inter RAO JSC ($IRAO) | -2.7% | 0.8% | 5.6% | 5.9% | |
| |
|---|
| Median (3 companies) | 34.9% | 35.6% | 34.8% | 34.7% | 45.8% |
|---|
| Dee Valley Group ($DVW) | 56.4% | 53.5% | 50.5% | 49.2% | 49.1% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| United Utilities Group ($UU.) | 32.1% | 38.2% | 39.2% | 38.7% | 36.7% |
| National Grid ($NG.) | 22.8% | 22.4% | 19.9% | 20.2% | 22.5% |
| Inter RAO JSC ($IRAO) | 8.8% | 6.2% | 4.9% | 3.5% | |
| |
|---|
| Median (3 companies) | 22.8% | 22.4% | 19.9% | 20.2% | 29.6% |
|---|
| Dee Valley Group ($DVW) | 32.0% | 66.9% | 28.1% | 27.3% | 24.3% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| National Grid ($NG.) | 9.8% | 9.6% | 8.9% | 9.0% | 9.2% |
| United Utilities Group ($UU.) | 6.9% | 6.6% | 6.8% | 6.7% | 5.4% |
| Inter RAO JSC ($IRAO) | -6.9% | -4.3% | 4.4% | 5.5% | |
| |
|---|
| Median (3 companies) | 6.9% | 6.6% | 6.8% | 6.7% | 7.3% |
|---|
| Dee Valley Group ($DVW) | 8.2% | 7.9% | 7.5% | 7.4% | 6.4% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| United Utilities Group ($UU.) | 6.2x | 6.4x | 6.1x | 6.4x | 7.3x |
| National Grid ($NG.) | 4.7x | 5.4x | 5.0x | 4.9x | 5.0x |
| Inter RAO JSC ($IRAO) | | 2.4x | 0.7x | 0.2x | |
| |
|---|
| Median (3 companies) | 5.5x | 5.4x | 5.0x | 4.9x | 6.1x |
|---|
| Dee Valley Group ($DVW) | 3.2x | 4.0x | 4.2x | 4.2x | 4.4x |
