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Aukett Swanke Group Net Income dropped on 53.3% in 2016 and EBITDA Margin decreased on 6.2 pp from 12.8% to 6.6%

12 Jan 2017 • About Aukett Swanke Group ($AUK) • By InTwits

Aukett Swanke Group reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is quite volatile: 6.6% in FY2016, 12.8% in FY2015, 9.5% in FY2014, 6.3% in FY2013, 3.0% in FY2012
  • Aukett Swanke Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.0%. At the same time it's a lot of higher than industry average of 4.4%.
  • CAPEX is quite volatile: 0.15 in FY2016, 0.16 in FY2015, 0.52 in FY2014, 0.16 in FY2013, 0.15 in FY2012
  • The company has business model with low profitability: ROIC is at 9.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Aukett Swanke Group ($AUK) key annual financial indicators

mln. £201220132014201520162016/2015
P&L
Revenue6.7447.11614.73216.88618.4109.0%
EBITDA0.2030.4481.4052.1581.216-43.7%
Net Income0.1550.3741.0461.6530.772-53.3%
Balance Sheet
Cash0.7391.3431.8911.8731.839-1.8%
Short Term Debt0.1500.1500.1130.0000.247
Long Term Debt0.2630.1130.0000.0000.802
Cash flow
Capex0.1530.1570.5230.1630.147-9.8%
Ratios
Revenue growth13.7%5.5%107.0%14.6%9.0%
EBITDA growth-117.3%120.7%213.6%53.6%-43.7%
EBITDA Margin3.0%6.3%9.5%12.8%6.6%-6.2%
Net Income Margin2.3%5.3%7.1%9.8%4.2%-5.6%
CAPEX, % of revenue2.3%2.2%3.6%1.0%0.8%-0.2%
ROIC2.7%11.4%27.3%31.6%9.6%-22.0%
ROE5.8%13.2%25.9%29.5%11.7%-17.8%
Net Debt/EBITDA-1.6x-2.4x-1.3x-0.9x-0.6x0.2x

Revenue and profitability


Aukett Swanke Group's Revenue increased on 9.0% in FY2016. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 6.2 pp from 12.8% to 6.6% in FY2016.

Net Income marign decreased on 5.6 pp from 9.8% to 4.2% in FY2016.

Capital expenditures (CAPEX) and working capital investments


In FY2016 the company had CAPEX/Revenue of 0.80%. Aukett Swanke Group showed small CAPEX/Revenue decline of 1.4 pp from 2.2% in FY2013 to 0.80% in FY2016. For the last three years the average CAPEX/Revenue was 1.8%.

Return on investment


The company operates at low ROIC (9.62%) and ROE (11.74%). ROIC dropped on 22.0 pp from 31.6% to 9.6% in FY2016. ROE dropped on 17.8 pp from 29.5% to 11.7% in FY2016.

Leverage (Debt)


Debt level is -0.6x Net Debt / EBITDA and 0.9x Debt / EBITDA. Net Debt / EBITDA surged on 0.2x from -0.9x to -0.6x in FY2016. Debt jumped while cash decreased slightly on 1.8% in FY2016.

Valuation


Aukett Swanke Group's trades at EV/EBITDA 3.6x and P/E 6.7x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 4.1x with the industry average at 19.0x.

Appendix 1: Peers in Construction & Materials


Below you can find Aukett Swanke Group benchmarking vs. other companies in Construction & Materials industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Kingspan Group ($KGP)5.3%9.1%6.4%46.7%
Accsys Technologies ($AXS)25.5%78.0%37.5%14.5%
Billington Hldgs ($BILN)-34.0%8.4%14.5%25.8%
Crh ($CRH)-0.3%4.9%25.0%14.7%
Clarke(T.) ($CTO)5.5%12.0%-4.2%16.6%
 
Median (25 companies)0.5%5.6%8.8%1.6%6.6%
Aukett Swanke Group ($AUK)5.5%107.0%14.6%9.0%


Top companies by Gross margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Inch Kenneth Kajang Rubber ($IKK)46.5%24.5%21.7%51.7%
Swp Group ($SWP)43.0%48.1%39.2%49.7%
Heath(Samuel)& Sons ($HSM)49.5%47.3%48.6%47.6%48.1%
James Halstead ($JHD)41.2%41.6%41.0%41.7%42.4%
Michelmersh Brick Hldgs ($MBH)35.3%28.4%31.1%38.2%
 
Median (24 companies)23.6%24.5%26.7%29.2%33.4%


Top companies by EBITDA margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Lucky Cement Ltd ($LKCS)31.5%26.8%24.4%26.5%30.4%
Steppe Cement ($STCM)20.8%23.2%14.3%24.7%
James Halstead ($JHD)20.2%19.8%20.1%20.9%21.6%
Michelmersh Brick Hldgs ($MBH)10.6%7.9%14.1%20.3%
LSR Group OJSC ($LSRG)20.2%19.5%22.9%19.3%
 
Median (25 companies)8.7%7.4%9.7%9.5%11.9%
Aukett Swanke Group ($AUK)3.0%6.3%9.5%12.8%6.6%


Top companies by CAPEX/Revenue, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Inch Kenneth Kajang Rubber ($IKK)74.2%5.4%12.8%54.9%
Lucky Cement Ltd ($LKCS)3.2%5.2%6.9%12.0%8.9%
Billington Hldgs ($BILN)1.0%1.1%2.9%10.8%
Low & Bonar ($BD46)3.5%2.8%4.6%9.1%4.7%
Superglass Hldgs ($SPGH)12.9%14.2%3.4%7.9%
 
Median (25 companies)2.1%2.5%2.4%2.3%3.0%
Aukett Swanke Group ($AUK)2.3%2.2%3.6%1.0%0.8%


Top companies by ROIC, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
James Halstead ($JHD)49.3%46.2%46.7%45.3%47.1%
Alumasc Group ($ALU)6.5%17.5%22.6%36.0%47.8%
Heath(Samuel)& Sons ($HSM)9.7%8.7%19.7%32.0%89.2%
Lucky Cement Ltd ($LKCS)23.8%22.9%20.3%20.0%20.8%
Clarke(T.) ($CTO)6.9%9.9%-0.4%19.6%
 
Median (25 companies)4.8%7.2%5.4%7.8%13.2%
Aukett Swanke Group ($AUK)2.7%11.4%27.3%31.6%9.6%


Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Mountfield Group ($MOGP)26.3x4.8x52.0x18.8x
Asia Cement Corp ($ASCD)7.8x6.9x6.8x8.6x
Crh ($CRH)2.0x3.6x1.6x3.1x1.7x
Low & Bonar ($BD46)2.7x2.1x2.1x2.4x2.1x
Saint-Gobain(Compagnie De) ($COD)2.1x2.0x2.1x1.4x
 
Median (21 companies)1.7x0.8x0.5x-0.0x-1.0x
Aukett Swanke Group ($AUK)-1.6x-2.4x-1.3x-0.9x-0.6x


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