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Swallowfield reports 64.4% EBITDA growth and 10.1% Revenue growth

20 Sep 2016 • About Swallowfield ($SWL) • By InTwits

Swallowfield reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is quite volatile: 6.7% in FY2016, 4.5% in FY2015, 4.0% in FY2014, 1.8% in FY2013, 4.9% in FY2012
  • Swallowfield has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's a lot of higher than industry average of 3.1%.
  • CAPEX is quite volatile: 1.5 in FY2016, 2.7 in FY2015, 3 in FY2014, 1.4 in FY2013, 0.88 in FY2012
  • The company has highly profitable business model: ROIC is at 18.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Swallowfield ($SWL) key annual financial indicators

mln. £201220132014201520162016/2015
P&L
Revenue57.87948.59150.03349.44754.45510.1%
Gross Profit6.1073.9765.1745.8388.06238.1%
SG&A4.8426.26929.5%
EBITDA2.8640.8782.0002.2243.65764.4%
Net Income1.263-0.9100.1570.7462.001168.2%
Balance Sheet
Cash0.9231.0930.5330.1480.798439.2%
Short Term Debt0.4710.3950.0000.1370.1412.9%
Long Term Debt0.4330.0370.0000.5830.442-24.2%
Cash flow
Capex1.2400.7520.8791.5431.181-23.5%
Ratios
Revenue growth0.7%-16.0%3.0%-1.2%10.1%
EBITDA growth10.7%-69.3%127.8%11.2%64.4%
Gross Margin10.6%8.2%10.3%11.8%14.8%3.0%
EBITDA Margin4.9%1.8%4.0%4.5%6.7%2.2%
Net Income Margin2.2%-1.9%0.3%1.5%3.7%2.2%
SG&A, % of revenue9.8%11.5%1.7%
CAPEX, % of revenue2.1%1.5%1.8%3.1%2.2%-1.0%
ROIC10.9%-3.1%5.1%8.4%18.7%10.3%
ROE9.3%-7.1%1.3%5.9%15.6%9.7%
Net Debt/EBITDA-0.0x-0.8x-0.3x0.3x-0.1x-0.3x

Revenue and profitability


Swallowfield's Revenue jumped on 10.1% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 2.0 pp from 10.0% to 8.0% in FY2016.

Gross Margin increased on 3.0 pp from 11.8% to 14.8% in FY2016. SG&A as a % of Revenue increased slightly on 1.7 pp from 9.8% to 11.5% in FY2016.

Net Income marign increased on 2.2 pp from 1.5% to 3.7% in FY2016.

Capital expenditures (CAPEX) and working capital investments


In FY2016 Swallowfield had CAPEX/Revenue of 2.2%. CAPEX/Revenue increased slightly on 0.62 pp from 1.5% in FY2013 to 2.2% in FY2016. For the last three years the average CAPEX/Revenue was 2.3%.

Return on investment


The company operates at good ROIC (18.71%) and ROE (15.56%). ROIC jumped on 10.3 pp from 8.4% to 18.7% in FY2016. ROE increased on 9.7 pp from 5.9% to 15.6% in FY2016.

Leverage (Debt)


Debt level is -0.1x Net Debt / EBITDA and 0.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 0.3x to -0.1x in FY2016. Debt dropped on 19.0% in FY2016 while cash surged on 439% in FY2016.

Valuation


The company's trades at EV/EBITDA 11.1x and P/E 20.4x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 16.4x with the industry average at 19.0x.

Appendix 1: Peers in Personal Goods


Below we provide Swallowfield benchmarking against other companies in Personal Goods 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
Svenska Cellulosa Ab-Sca ($0MCK)5.0%8.7%12.0%10.8%
Creightons ($CRL)6.1%11.7%4.2%4.1%
Far Eastern New Century Corp ($FETD)0.9%-1.4%-7.5%
Pittards ($PTD)-3.1%-3.3%-3.0%-12.1%
Bagir Grp Ltd ($BAGR)1.6%14.8%-2.5%-22.5%
 
Median (5 companies)1.6%6.1%-1.4%-7.5%4.1%
Swallowfield ($SWL)-16.0%3.0%-1.2%10.1%


Top companies by Gross margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Creightons ($CRL)42.1%42.8%40.8%39.2%42.2%
Svenska Cellulosa Ab-Sca ($0MCK)24.2%24.8%25.1%25.9%
Far Eastern New Century Corp ($FETD)18.7%19.5%20.3%23.2%
Pittards ($PTD)17.4%20.5%20.3%21.7%
Bagir Grp Ltd ($BAGR)17.0%19.1%17.4%9.8%
 
Median (5 companies)18.7%20.5%20.3%23.2%42.2%
Swallowfield ($SWL)10.6%8.2%10.3%11.8%14.8%


Top companies by EBITDA margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Far Eastern New Century Corp ($FETD)12.3%12.5%12.1%15.0%
Svenska Cellulosa Ab-Sca ($0MCK)12.6%15.0%15.2%14.6%
Pittards ($PTD)4.6%6.6%6.9%6.2%
Creightons ($CRL)4.0%4.6%4.7%5.0%4.7%
Bagir Grp Ltd ($BAGR)3.9%6.1%3.4%-3.9%
 
Median (5 companies)4.6%6.6%6.9%6.2%4.7%
Swallowfield ($SWL)4.9%1.8%4.0%4.5%6.7%


Top companies by CAPEX/Revenue, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Pittards ($PTD)1.7%1.0%1.7%14.3%
Far Eastern New Century Corp ($FETD)7.4%10.5%12.0%11.1%
Svenska Cellulosa Ab-Sca ($0MCK)6.6%6.1%5.5%6.6%
Creightons ($CRL)1.9%0.6%1.1%0.8%3.7%
Bagir Grp Ltd ($BAGR)0.2%0.3%0.2%0.1%
 
Median (5 companies)1.9%1.0%1.7%6.6%3.7%
Swallowfield ($SWL)2.1%1.5%1.8%3.1%2.2%


Top companies by ROIC, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Svenska Cellulosa Ab-Sca ($0MCK)5.5%8.2%8.7%9.0%
Creightons ($CRL)6.3%7.0%8.4%8.8%6.7%
Pittards ($PTD)4.7%9.1%8.2%5.2%
Far Eastern New Century Corp ($FETD)4.3%3.6%2.6%3.0%
Bagir Grp Ltd ($BAGR)4.7%18.8%1.9%-24.8%
 
Median (5 companies)4.7%8.2%8.2%5.2%6.7%
Swallowfield ($SWL)10.9%-3.1%5.1%8.4%18.7%


Top companies by Net Debt / EBITDA

Top  FY2012 FY2013 FY2014 FY2015 FY2016
Far Eastern New Century Corp ($FETD)2.7x4.8x5.6x5.1x
Pittards ($PTD)3.3x3.0x3.2x3.4x
Svenska Cellulosa Ab-Sca ($0MCK)2.9x2.6x2.2x1.7x
Creightons ($CRL)1.2x1.2x0.7x0.1x-0.8x
 
Median (4 companies)2.9x3.0x3.2x2.5x-0.8x
Swallowfield ($SWL)-0.0x-0.8x-0.3x0.3x-0.1x


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