Begbies Traynor Group EBITDA surged on 15.7% in 2016 and Revenue surged on 10.5%
12 Jul 2016 • About Begbies Traynor Group (
$BEG) • By InTwits
Begbies Traynor Group reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Begbies Traynor Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's in pair with industry average of 6.6%.
- CAPEX is quite volatile: 0.51 in FY2016, 1.2 in FY2015, 0.36 in FY2014, 0.39 in FY2013, 1.1 in FY2012
- The company has potentially unprofitable business model: ROIC is at 5.1%
- It operates with high leverage: Net Debt/EBITDA is 1.3x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Begbies Traynor Group ($BEG) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 57.737 | 51.092 | 44.089 | 45.360 | 50.135 | 10.5% |
| Gross Profit | 28.198 | 23.126 | 20.307 | 20.316 | 22.077 | 8.7% |
| SG&A | | | 13.945 | 15.826 | 16.838 | 6.4% |
| EBITDA | 12.232 | 12.797 | 8.666 | 7.133 | 8.256 | 15.7% |
| Net Income | -5.717 | 1.418 | 3.025 | -1.580 | 0.294 | -118.6% |
Balance Sheet
|
|---|
| Cash | 4.302 | 4.962 | 7.541 | 9.209 | 7.634 | -17.1% |
| Short Term Debt | 0.212 | 0.109 | 0.026 | 0.000 | 0.000 | |
| Long Term Debt | 24.145 | 22.018 | 22.000 | 22.000 | 18.000 | -18.2% |
Cash flow
|
|---|
| Capex | 1.145 | 0.386 | 0.360 | 1.230 | 0.511 | -58.5% |
Ratios
|
|---|
| Revenue growth | -4.6% | -11.5% | -13.7% | 2.9% | 10.5% | |
| EBITDA growth | -8.7% | 4.6% | -32.3% | -17.7% | 15.7% | |
| Gross Margin | 48.8% | 45.3% | 46.1% | 44.8% | 44.0% | -0.8% |
| EBITDA Margin | 21.2% | 25.0% | 19.7% | 15.7% | 16.5% | 0.7% |
| Net Income Margin | -9.9% | 2.8% | 6.9% | -3.5% | 0.6% | 4.1% |
| SG&A, % of revenue | | | 31.6% | 34.9% | 33.6% | -1.3% |
| CAPEX, % of revenue | 2.0% | 0.8% | 0.8% | 2.7% | 1.0% | -1.7% |
| ROIC | 10.7% | 13.2% | 8.5% | 5.3% | 5.1% | -0.2% |
| ROE | -9.2% | 2.4% | 5.2% | -2.6% | 0.5% | 3.1% |
| Net Debt/EBITDA | 1.6x | 1.3x | 1.7x | 1.8x | 1.3x | -0.5x |
Revenue and profitability
Begbies Traynor Group's Revenue surged on 10.5% 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 decreased slightly on 0.75 pp from 44.8% to 44.0% in FY2016. SG&A as a % of Revenue decreased slightly on 1.3 pp from 34.9% to 33.6% in FY2016.
Net Income marign increased on 4.1 pp from -3.5% to 0.59% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.0% in FY2016. The company showed almost no change in CAPEX/Revenue from FY2013 to FY2016. For the last three years the average CAPEX/Revenue was 1.5%.
Return on investment
The company operates at low ROIC (5.09%) and ROE (0.49%). ROIC showed almost no change in FY2016. ROE increased on 3.1 pp from -2.6% to 0.49% in FY2016.
Leverage (Debt)
Debt level is 1.3x Net Debt / EBITDA and 2.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 1.8x to 1.3x in FY2016. Debt dropped on 18.2% in FY2016 while cash dropped on 17.1% in FY2016.
Valuation
Begbies Traynor Group's trades at EV/EBITDA 7.4x and P/E 171.3x while industy averages are 15.6x and 19.1x. Begbies Traynor Group's EV/(EBITDA-CAPEX) is 7.8x with the industry average at 19.0x.
Appendix 1: Peers in Support Services
Below we provide Begbies Traynor Group 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 ($IBEX) | 7.4% | 35.7% | 30.0% | 29.8% | |
| |
|---|
| Median (55 companies) | 5.2% | 8.0% | 5.0% | 6.9% | 1.1% |
|---|
| Begbies Traynor Group ($BEG) | | -11.5% | -13.7% | 2.9% | 10.5% |
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% | 71.3% |
| 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 ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
| |
|---|
| Median (49 companies) | 28.2% | 28.5% | 29.2% | 28.4% | 31.1% |
|---|
| Begbies Traynor Group ($BEG) | 48.8% | 45.3% | 46.1% | 44.8% | 44.0% |
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 (55 companies) | 6.7% | 6.3% | 6.8% | 6.9% | 7.9% |
|---|
| Begbies Traynor Group ($BEG) | 21.2% | 25.0% | 19.7% | 15.7% | 16.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($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% | 4.8% |
| |
|---|
| Median (55 companies) | 1.0% | 1.1% | 1.1% | 1.0% | 1.2% |
|---|
| Begbies Traynor Group ($BEG) | 2.0% | 0.8% | 0.8% | 2.7% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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 (55 companies) | 9.5% | 7.8% | 9.4% | 10.4% | 9.4% |
|---|
| Begbies Traynor Group ($BEG) | 10.7% | 13.2% | 8.5% | 5.3% | 5.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($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 | 2.4x |
| Ceps ($CEPS) | | 3.0x | 6.6x | 3.8x | |
| Kellan Group(The ($KLN) | | | 6.5x | 3.6x | |
| |
|---|
| Median (51 companies) | 0.8x | 0.5x | 0.6x | 0.4x | 0.5x |
|---|
| Begbies Traynor Group ($BEG) | 1.6x | 1.3x | 1.7x | 1.8x | 1.3x |
