Falkland Islands Hldgs Net Income dropped on 29.3% in 2016 and EBITDA Margin decreased on 4.4 pp from 16.5% to 12.2%
14 Jun 2016 • About Falkland Islands Hldgs (
$FKL) • By InTwits
Falkland Islands Hldgs reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Falkland Islands Hldgs has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.0%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: 1.9 in FY2016, 4.6 in FY2015, 4.9 in FY2014, 2.4 in FY2013, 1.3 in FY2012
- The company has potentially unprofitable business model: ROIC is at 6.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Falkland Islands Hldgs ($FKL) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 34.109 | 35.596 | 38.263 | 38.560 | 38.996 | 1.1% |
| Gross Profit | 13.978 | 14.418 | 16.051 | 15.633 | 15.499 | -0.9% |
| SG&A | | | | 12.050 | | -100.0% |
| EBITDA | 4.985 | 4.706 | 5.367 | 6.371 | 4.745 | -25.5% |
| Net Income | 2.256 | 1.604 | 2.633 | 3.144 | 2.222 | -29.3% |
Balance Sheet
|
|---|
| Cash | 2.751 | 11.416 | 5.715 | 7.435 | 14.037 | 88.8% |
| Short Term Debt | 1.140 | 1.149 | 1.109 | 0.293 | 0.546 | 86.3% |
| Long Term Debt | 7.145 | 6.139 | 5.061 | 5.580 | 7.855 | 40.8% |
Cash flow
|
|---|
| Capex | 1.277 | 2.415 | 4.933 | 4.597 | 1.854 | -59.7% |
Ratios
|
|---|
| Revenue growth | 7.1% | 4.4% | 7.5% | 0.8% | 1.1% | |
| EBITDA growth | 32.7% | -5.6% | 14.0% | 18.7% | -25.5% | |
| Gross Margin | 41.0% | 40.5% | 41.9% | 40.5% | 39.7% | -0.8% |
| EBITDA Margin | 14.6% | 13.2% | 14.0% | 16.5% | 12.2% | -4.4% |
| Net Income Margin | 6.6% | 4.5% | 6.9% | 8.2% | 5.7% | -2.5% |
| SG&A, % of revenue | | | | 31.3% | | -31.3% |
| CAPEX, % of revenue | 3.7% | 6.8% | 12.9% | 11.9% | 4.8% | -7.2% |
| ROIC | 9.5% | 7.7% | 9.3% | 11.1% | 6.8% | -4.3% |
| ROE | 7.5% | 5.0% | 7.6% | 8.7% | 5.9% | -2.8% |
| Net Debt/EBITDA | 1.1x | -0.9x | 0.1x | -0.2x | -1.2x | -0.9x |
Revenue and profitability
Falkland Islands Hldgs's Revenue increased slightly on 1.1% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 7.2% to 8.1% in FY2016.
Gross Margin decreased slightly on 0.80 pp from 40.5% to 39.7% in FY2016.
Net Income marign decreased on 2.5 pp from 8.2% to 5.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 4.8%. Falkland Islands Hldgs's CAPEX/Revenue decreased on 2.0 pp from 6.8% in FY2013 to 4.8% in FY2016. It's average CAPEX/Revenue for the last three years was 9.9%.
Return on investment
The company operates at low ROIC (6.84%) and ROE (5.91%). ROIC decreased on 4.3 pp from 11.1% to 6.8% in FY2016. ROE decreased on 2.8 pp from 8.7% to 5.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.2x and Debt / EBITDA is 1.8x. Net Debt / EBITDA dropped on 0.9x from -0.2x to -1.2x in FY2016. Debt jumped on 43.0% in FY2016 while cash surged on 88.8% in FY2016.
Appendix 1: Peers in Support Services
Below you can find Falkland Islands Hldgs benchmarking vs. other companies in Support 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 |
|---|
| 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 ($IBEX) | 7.4% | 35.7% | 30.0% | 29.8% | |
| |
|---|
| Median (54 companies) | 5.2% | 8.0% | 4.7% | 6.7% | 1.5% |
|---|
| Falkland Islands Hldgs ($FKL) | | 4.4% | 7.5% | 0.8% | 1.1% |
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% | |
| Grafenia ($GRA) | 53.4% | 54.3% | 56.1% | 70.8% | 66.3% |
| Vianet Group ($VNET) | 53.3% | 51.3% | 58.8% | 69.2% | 70.1% |
| Prime People ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | |
| |
|---|
| Median (48 companies) | 28.2% | 28.5% | 29.2% | 28.6% | 27.3% |
|---|
| Falkland Islands Hldgs ($FKL) | 41.0% | 40.5% | 41.9% | 40.5% | 39.7% |
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% | 7.5% |
|---|
| Falkland Islands Hldgs ($FKL) | 14.6% | 13.2% | 14.0% | 16.5% | 12.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($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 ($AUG) | 9.8% | 15.9% | 12.3% | 12.3% | |
| Capital Drilling Ltd ($CAPD) | 18.9% | 4.9% | 13.9% | 10.1% | |
| |
|---|
| Median (54 companies) | 1.0% | 1.1% | 1.0% | 1.1% | 1.2% |
|---|
| Falkland Islands Hldgs ($FKL) | 3.7% | 6.8% | 12.9% | 11.9% | 4.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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) | 9.9% | 7.9% | 9.4% | 9.9% | 9.4% |
|---|
| Falkland Islands Hldgs ($FKL) | 9.5% | 7.7% | 9.3% | 11.1% | 6.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($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 | 0.6x |
|---|
| Falkland Islands Hldgs ($FKL) | 1.1x | -0.9x | 0.1x | -0.2x | -1.2x |
