Waterman Group reports 63.6% EBITDA growth and 8.8% Revenue growth
10 Oct 2016 • About Waterman Group (
$WTM) • By InTwits
Waterman Group reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 4.8% in FY2016 vs. 3.2% in FY2015 vs. -2.9% in FY2012
- EBITDA Margin is quite volatile: 4.8% in FY2016, 3.2% in FY2015, 2.8% in FY2014, 2.8% in FY2013, -2.9% in FY2012
- Waterman Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
- The company has business model with average profitability: ROIC is at 11.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Waterman Group ($WTM) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 68.840 | 61.475 | 68.840 | 83.938 | 91.320 | 8.8% |
| EBITDA | -1.965 | 1.700 | 1.908 | 2.657 | 4.348 | 63.6% |
| Net Income | -0.091 | -0.111 | -3.616 | 1.361 | 2.336 | 71.6% |
Balance Sheet
|
|---|
| Cash | 3.977 | 3.189 | 3.019 | 5.419 | 7.706 | 42.2% |
| Short Term Debt | 1.422 | 0.829 | 0.603 | 0.715 | 1.829 | 155.8% |
| Long Term Debt | 1.672 | 1.244 | 0.801 | 0.939 | 0.428 | -54.4% |
Cash flow
|
|---|
| Capex | 0.439 | 0.561 | 0.721 | 1.010 | 0.963 | -4.7% |
Ratios
|
|---|
| Revenue growth | -7.1% | -10.7% | 12.0% | 21.9% | 8.8% | |
| EBITDA growth | -165.3% | -186.5% | 12.2% | 39.3% | 63.6% | |
| EBITDA Margin | -2.9% | 2.8% | 2.8% | 3.2% | 4.8% | 1.6% |
| Net Income Margin | -0.1% | -0.2% | -5.3% | 1.6% | 2.6% | 0.9% |
| CAPEX, % of revenue | 0.6% | 0.9% | 1.0% | 1.2% | 1.1% | -0.1% |
| ROIC | -8.5% | 2.7% | 4.2% | 6.7% | 11.3% | 4.6% |
| ROE | -0.3% | -0.4% | -12.5% | 5.1% | 8.5% | 3.4% |
| Net Debt/EBITDA | | -0.7x | -0.8x | -1.4x | -1.3x | 0.2x |
Revenue and profitability
Waterman Group's Revenue increased on 8.8% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 28.9 pp from -48.6% to -19.7% in FY2016.
Net Income marign increased slightly on 0.94 pp from 1.6% to 2.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Waterman Group's CAPEX/Revenue was 1.1% 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 1.1%.
Return on investment
The company operates at low ROIC (11.32%) and ROE (8.48%). ROIC increased on 4.6 pp from 6.7% to 11.3% in FY2016. ROE increased on 3.4 pp from 5.1% to 8.5% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.3x and Debt / EBITDA is 0.5x. Net Debt / EBITDA jumped on 0.2x from -1.4x to -1.3x in FY2016. Debt surged on 36.5% in FY2016 while cash jumped on 42.2% in FY2016.
Valuation
Waterman Group's trades at EV/EBITDA 4.7x and P/E 11.0x while industy averages are 15.6x and 19.1x.
Appendix 1: Peers in Support Services
Below we provide Waterman 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 ($IBEX) | | 35.7% | 30.0% | 29.8% | 7.0% |
| |
|---|
| Median (55 companies) | 2.4% | 8.0% | 4.7% | 6.6% | 1.3% |
|---|
| Waterman Group ($WTM) | | -10.7% | 12.0% | 21.9% | 8.8% |
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 ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
| |
|---|
| Median (50 companies) | 28.8% | 28.6% | 29.8% | 28.6% | 28.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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) | 6.8% | 6.4% | 6.9% | 7.6% | 9.4% |
|---|
| Waterman Group ($WTM) | -2.9% | 2.8% | 2.8% | 3.2% | 4.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($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) | 1.1% | 1.1% | 1.1% | 1.0% | 1.1% |
|---|
| Waterman Group ($WTM) | 0.6% | 0.9% | 1.0% | 1.2% | 1.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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) | 9.9% | 7.9% | 9.4% | 10.4% | 10.5% |
|---|
| Waterman Group ($WTM) | -8.5% | 2.7% | 4.2% | 6.7% | 11.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($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 | 0.7x | 0.6x | 0.4x | 0.1x |
|---|
| Waterman Group ($WTM) | | -0.7x | -0.8x | -1.4x | -1.3x |
