Coral Products CAPEX surged on 279% in 2016 and Revenue increased on 7.4%
25 Aug 2016 • About Coral Products (
$CRU) • By InTwits
Coral Products reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 7.1% in FY2016 vs. 8.5% in FY2015 vs. 7.1% in FY2012
- Coral Products has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.6%. At the same time it's a lot of higher than industry average of 4.4%.
- CAPEX is quite volatile: 1.7 in FY2016, 0.44 in FY2015, 0.38 in FY2014, 2.6 in FY2013, 1.6 in FY2012
- The company has potentially unprofitable business model: ROIC is at 3.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.5x while industry average is 2.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Coral Products ($CRU) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 17.309 | 17.279 | 17.222 | 17.425 | 18.714 | 7.4% |
| Gross Profit | 3.826 | 4.249 | 4.087 | 5.157 | 6.202 | 20.3% |
| SG&A | | | 4.851 | 4.782 | 5.264 | 10.1% |
| EBITDA | 1.225 | 1.351 | 1.178 | 1.488 | 1.325 | -11.0% |
| Net Income | -0.369 | 0.427 | -0.922 | 0.191 | 0.743 | 289.0% |
Balance Sheet
|
|---|
| Cash | 0.052 | 0.000 | 0.000 | 0.067 | 0.910 | 1,258.2% |
| Short Term Debt | 1.518 | 2.564 | 2.502 | 2.349 | 2.062 | -12.2% |
| Long Term Debt | 0.385 | 1.386 | 1.466 | 1.704 | 2.122 | 24.5% |
Cash flow
|
|---|
| Capex | 1.568 | 2.647 | 0.375 | 0.440 | 1.668 | 279.1% |
Ratios
|
|---|
| Revenue growth | 31.2% | -0.2% | -0.3% | 1.2% | 7.4% | |
| EBITDA growth | 97.6% | 10.3% | -12.8% | 26.3% | -11.0% | |
| Gross Margin | 22.1% | 24.6% | 23.7% | 29.6% | 33.1% | 3.5% |
| EBITDA Margin | 7.1% | 7.8% | 6.8% | 8.5% | 7.1% | -1.5% |
| Net Income Margin | -2.1% | 2.5% | -5.4% | 1.1% | 4.0% | 2.9% |
| SG&A, % of revenue | | | 28.2% | 27.4% | 28.1% | 0.7% |
| CAPEX, % of revenue | 9.1% | 15.3% | 2.2% | 2.5% | 8.9% | 6.4% |
| ROIC | 3.2% | 2.3% | 2.6% | 6.7% | 3.2% | -3.4% |
| ROE | -5.4% | 5.2% | -11.6% | 2.3% | 6.5% | 4.2% |
| Net Debt/EBITDA | 1.5x | 2.9x | 3.4x | 2.7x | 2.5x | -0.2x |
Revenue and profitability
The company's Revenue increased on 7.4% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 45.7 pp from -71.9% to -26.2% in FY2016.
Gross Margin increased on 3.5 pp from 29.6% to 33.1% in FY2016. SG&A as a % of Revenue increased slightly on 0.69 pp from 27.4% to 28.1% in FY2016.
Net Income marign increased on 2.9 pp from 1.1% to 4.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Coral Products's CAPEX/Revenue was 8.9% in FY2016. Coral Products's CAPEX/Revenue decreased on 6.4 pp from 15.3% in FY2013 to 8.9% in FY2016. For the last three years the average CAPEX/Revenue was 4.5%.Coral Products maintained rich investment policy and has spent a lot to CAPEX (126% of EBITDA).
Return on investment
The company operates at low ROIC (3.25%) and ROE (6.51%). ROIC decreased on 3.4 pp from 6.7% to 3.2% in FY2016. ROE increased on 4.2 pp from 2.3% to 6.5% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.5x and Debt / EBITDA is 3.2x. Net Debt / EBITDA dropped on 0.2x from 2.7x to 2.5x in FY2016. Debt increased on 3.2% in FY2016 while cash surged on 1,258% in FY2016.
Valuation
The company's trades at EV/EBITDA 14.1x and P/E 20.7x while industy averages are 15.6x and 19.1x.
Appendix 1: Peers in General Industrials
Below we provide Coral Products benchmarking against other companies in General Industrials 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 |
|---|
| Press Corp ($PESD) | 111.1% | 52.6% | 20.3% | 17.8% | |
| Macfarlane Group ($MACF) | -1.9% | 1.4% | 6.9% | 10.0% | |
| Robinson ($RBN) | -1.6% | 10.2% | 20.3% | 3.8% | |
| Thyssenkrupp Ag ($0O1C) | -2.8% | -7.2% | 6.9% | 3.8% | |
| Barloworld ($BWO) | 17.5% | 1.6% | 4.4% | 1.0% | |
| |
|---|
| Median (9 companies) | 1.3% | 1.6% | 4.4% | 1.0% | |
|---|
| Coral Products ($CRU) | | -0.2% | -0.3% | 1.2% | 7.4% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Press Corp ($PESD) | 58.9% | 54.4% | 56.0% | 54.5% | |
| Macfarlane Group ($MACF) | 32.0% | 31.2% | 30.9% | 31.5% | |
| Honeywell International Inc ($HON) | 24.9% | 27.4% | 28.2% | 30.7% | |
| Smurfit Kappa Group ($SKG) | 28.6% | 28.9% | 29.5% | 30.0% | |
| Jardine Strategic Hldgs ($88EI) | 24.0% | 24.0% | 25.4% | 25.5% | |
| |
|---|
| Median (9 companies) | 24.9% | 27.4% | 25.4% | 25.5% | |
|---|
| Coral Products ($CRU) | 22.1% | 24.6% | 23.7% | 29.6% | 33.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Press Corp ($PESD) | 29.5% | 29.6% | 29.2% | 25.3% | |
| Honeywell International Inc ($HON) | 13.5% | 16.6% | 16.8% | 20.0% | |
| Jardine Strategic Hldgs ($88EI) | 15.0% | 13.3% | 13.5% | 15.1% | |
| Smurfit Kappa Group ($SKG) | 13.4% | 12.8% | 12.7% | 14.3% | |
| General Electric Co. ($GEC) | 17.2% | 16.5% | 13.3% | 10.4% | |
| |
|---|
| Median (9 companies) | 13.5% | 13.3% | 13.3% | 10.4% | |
|---|
| Coral Products ($CRU) | 7.1% | 7.8% | 6.8% | 8.5% | 7.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Press Corp ($PESD) | 21.3% | 8.5% | 12.1% | 9.0% | |
| General Electric Co. ($GEC) | 10.5% | 9.4% | 6.1% | 6.3% | |
| Smurfit Kappa Group ($SKG) | 4.3% | 4.4% | 5.3% | 5.3% | |
| Robinson ($RBN) | 4.3% | 6.0% | 3.5% | 3.7% | |
| Jardine Strategic Hldgs ($88EI) | 5.8% | 5.2% | 4.1% | 2.9% | |
| |
|---|
| Median (9 companies) | 4.3% | 4.4% | 3.5% | 2.9% | |
|---|
| Coral Products ($CRU) | 9.1% | 15.3% | 2.2% | 2.5% | 8.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Honeywell International Inc ($HON) | 21.8% | 23.0% | 21.3% | 23.2% | |
| Press Corp ($PESD) | 21.6% | 27.1% | 24.7% | 18.9% | |
| Macfarlane Group ($MACF) | 17.9% | 22.2% | 19.0% | 17.8% | |
| Smurfit Kappa Group ($SKG) | 10.8% | 11.2% | 11.8% | 13.9% | |
| Barloworld ($BWO) | 14.0% | 13.5% | 14.1% | 12.9% | |
| |
|---|
| Median (9 companies) | 10.8% | 11.2% | 11.8% | 12.9% | |
|---|
| Coral Products ($CRU) | 3.2% | 2.3% | 2.6% | 6.7% | 3.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| General Electric Co. ($GEC) | 10.5x | 8.9x | 12.0x | 10.6x | |
| Smurfit Kappa Group ($SKG) | 2.9x | 2.6x | 2.7x | 2.6x | |
| Thyssenkrupp Ag ($0O1C) | 3.4x | 4.5x | 2.0x | 1.8x | |
| Barloworld ($BWO) | 1.5x | 1.4x | 1.2x | 1.7x | |
| Macfarlane Group ($MACF) | 1.0x | 0.8x | 1.3x | 1.3x | |
| |
|---|
| Median (9 companies) | 1.4x | 1.3x | 1.3x | 1.3x | |
|---|
| Coral Products ($CRU) | 1.5x | 2.9x | 3.4x | 2.7x | 2.5x |
