Looking for a growth stock? Pay attention to Mortice Ltd
10 Jan 2017 • About Mortice Ltd (
$MORT) • By InTwits
Pay attention to Mortice Ltd as a growth stock. Its revenue performance, profitability and financial model stands it out vs. other public companies on the market.
Growth story
Mortice Ltd showed growth in the last financial year. Mortice Ltd's revenue surged on 51.1% in FY2016. EBITDA also increased considerably: 16.9% for the same period.
In the last 3 years Mortice Ltd showed fast revenue growth of 25.9% from FY2013 to FY2016 annually. EBITDA surged on 4.29% from FY2013 to FY2016 annually.
Mortice Ltd ($MORT) financials for the last 5 years
| mln. $ | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Revenue | 61 | 67 | 74 | 88 | 133 |
|---|
| Revenue growth, % | | 9.2% | 11.0% | 18.9% | 51.1% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 4 | 4 | 3 | 4 | 5 |
|---|
| EBITDA growth, % | | 4.3% | -19.1% | 19.9% | 16.9% |
|---|
| EBITDA margin, % | 6.69% | 6.39% | 4.66% | 4.70% | 3.63% |
|---|
| Net Income | 2 | 2 | 1 | 1 | 1 |
|---|
| Net Income margin, % | 2.72% | 2.84% | 1.50% | 1.54% | 0.525% |
|---|
| |
| CAPEX | 0 | 0 | 1 | 1 | 1 |
|---|
| CAPEX/Revenue, % | 0.592% | 0.567% | 0.914% | 1.02% | 0.649% |
|---|
| Debt | 5 | 6 | 9 | 7 | 16 |
|---|
| Cash | 2 | 1 | 1 | 1 | 2 |
|---|
| Net Debt/EBITDA | 0.9x | 1.1x | 2.2x | 1.7x | 3.0x |
|---|
| |
| ROIC, % | 32.2% | 29.2% | 19.6% | 21.9% | 14.5% |
|---|
| ROE, % | 22.1% | 22.1% | 11.8% | 13.5% | 5.7% |
|---|
Profitability and return on investment
EBITDA margin declined slightly from 4.70% in FY2015 to 3.60% in FY2016. In the last 3 years the company showed big decline in EBITDA margin of 2.80 pp from 6.40% in FY2013 to 3.60% in FY2016.
We call Mortice Ltd an attractive growth stock as together with the growth it delivers high ROIC at 14.5%. During the last three years it dropped - it was 29.2% in FY2013. For the last three years the average ROIC was 18.7%.
Mortice Ltd's Net Income margin dropped on 1 pp from 1.50% to 0.500% in FY2016. In the last 3 years Net Income margin dropped on 2.30 pp from 2.80% in FY2013 to 0.500% in FY2016.
Mortice Ltd operates at ROE of 5.65%. It's average level of ROE for the last three years was 10.3%.
Capital expenditures (CAPEX)
The company's CAPEX/Revenue was 0.649% in FY2016. Mortice Ltd's CAPEX/Revenue surged on 0.0816 pp from 0.567% in FY2013 to 0.649% in FY2016. It's average CAPEX/Revenue for the last three years was 0.861%.
Leverage (Debt)
The company has medium debt level at 3.0x Net Debt/EBITDA to maintain high growth. In the longer period leverage surged on 1.94x from 1.06x in FY2013 to 3.00x in FY2016.
Valuation vs. comparable companies
The market closed today at 13.4x EV/EBITDA for Mortice Ltd which is 45.6% lower than 24.5x Support Services peer group avearge calculated on the basis of 158 companies. The market closed today at 71.7x P/E for Mortice Ltd which is 68.1% lower than 224.5x Support Services peer group avearge calculated on the basis of 16 companies.
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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 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 ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
| |
|---|
| Median (50 companies) | 28.8% | 28.6% | 29.8% | 28.6% | 27.1% |
|---|
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 21St Century Technology ($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 ($MORT) | 6.7% | 6.4% | 4.7% | 4.7% | 3.6% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Vp ($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 ($MORT) | 0.6% | 0.6% | 0.9% | 1.0% | 0.6% |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| 21St Century Technology ($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 ($MORT) | 32.2% | 29.2% | 19.6% | 21.9% | 14.5% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Redhall Group ($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 |
