Mortice Ltd Debt jumped on 116% in 2016 and Revenue surged on 51.1%
03 Jan 2017 • About Mortice Ltd (
$MORT) • By InTwits
Mortice Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mortice Ltd is a fast growth stock: FY2016 revenue growth was 51.1%, 5 year revenue CAGR was 22.6% at FY2016 ROIC 14.5%
- Mortice Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
- The company has highly profitable business model: ROIC is at 14.5%
- It operates with high leverage: Net Debt/EBITDA is 3.0x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mortice Ltd ($MORT) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 61.1 | 66.7 | 74.1 | 88.1 | 133.0 | 51.1% |
| EBITDA | 4.1 | 4.3 | 3.4 | 4.1 | 4.8 | 16.9% |
| Net Income | 1.7 | 1.9 | 1.1 | 1.4 | 0.7 | -48.6% |
Balance Sheet
|
|---|
| Cash | 1.7 | 1.4 | 1.1 | 0.5 | 1.6 | 198.6% |
| Short Term Debt | 5.3 | 5.6 | 8.1 | 7.1 | 10.3 | 44.4% |
| Long Term Debt | 0.2 | 0.3 | 0.4 | 0.4 | 5.9 | 1,515.7% |
Cash flow
|
|---|
| Capex | 0.4 | 0.4 | 0.7 | 0.9 | 0.9 | -3.8% |
Ratios
|
|---|
| Revenue growth | 27.2% | 9.2% | 11.0% | 18.9% | 51.1% | |
| EBITDA growth | 66.9% | 4.3% | -19.1% | 19.9% | 16.9% | |
| EBITDA Margin | 6.7% | 6.4% | 4.7% | 4.7% | 3.6% | -1.1% |
| Net Income Margin | 2.7% | 2.8% | 1.5% | 1.5% | 0.5% | -1.0% |
| CAPEX, % of revenue | 0.6% | 0.6% | 0.9% | 1.0% | 0.6% | -0.4% |
| ROIC | 32.2% | 29.2% | 19.6% | 21.9% | 14.5% | -7.5% |
| ROE | 22.1% | 22.1% | 11.8% | 13.5% | 5.7% | -7.9% |
| Net Debt/EBITDA | 0.9x | 1.1x | 2.2x | 1.7x | 3.0x | 1.3x |
Revenue and profitability
The company's Revenue jumped on 51.1% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 28.9 pp from -48.6% to -19.7% in FY2016.
Net Income marign decreased slightly on 1.0 pp from 1.5% to 0.53% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 0.65%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 0.86%.
Return on investment
The company operates at good ROIC (14.46%) while ROE is low (5.65%). ROIC decreased on 7.5 pp from 21.9% to 14.5% in FY2016. ROE decreased on 7.9 pp from 13.5% to 5.7% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.0x and Debt / EBITDA is 3.3x. Net Debt / EBITDA surged on 1.3x from 1.7x to 3.0x in FY2016. Debt surged on 116% in FY2016 while cash jumped on 199% in FY2016.
Valuation
Mortice Ltd's trades at EV/EBITDA 13.4x and P/E 71.7x while industy averages are 15.6x and 19.1x.
Appendix 1: Peers in Support Services
Below we provide Mortice Ltd 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 ($IBEX) | | 35.7% | 30.0% | 29.8% | 7.0% |
| |
|---|
| Median (55 companies) | 2.4% | 6.9% | 4.7% | 6.6% | 1.7% |
|---|
| Mortice Ltd ($MORT) | | 9.2% | 11.0% | 18.9% | 51.1% |
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% | 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 ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
| |
|---|
| Median (50 companies) | 28.8% | 28.6% | 29.8% | 28.6% | 27.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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% | 6.3% | 6.9% | 7.6% | 7.5% |
|---|
| Mortice Ltd ($MORT) | 6.7% | 6.4% | 4.7% | 4.7% | 3.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($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% | 1.1% | 1.0% |
|---|
| Mortice Ltd ($MORT) | 0.6% | 0.6% | 0.9% | 1.0% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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 ($SVCA) | 1.0% | 7.8% | 14.9% | 22.3% | 22.8% |
| Rtc Group ($RTC) | 14.6% | 17.6% | 19.9% | 22.2% | |
| |
|---|
| Median (55 companies) | 9.5% | 7.8% | 9.3% | 10.2% | 10.3% |
|---|
| Mortice Ltd ($MORT) | 32.2% | 29.2% | 19.6% | 21.9% | 14.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($RHL) | 22.8x | 5.8x | 6.6x | 16.8x | 16.2x |
| 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 | 0.4x |
|---|
| Mortice Ltd ($MORT) | 0.9x | 1.1x | 2.2x | 1.7x | 3.0x |
