Sagentia Group reports 69.0% CAPEX decline while 18.2% Revenue growth
02 Mar 2017 • About Sagentia Group (
$SAG) • By InTwits
Sagentia Group reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sagentia Group has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.3%. At the same time it's a lot of higher than industry average of 2.7%.
- CAPEX is quite volatile: 2.4 in FY2016, 7.9 in FY2015, 0.43 in FY2014, 0.42 in FY2013, 0.42 in FY2012
- The company has potentially unprofitable business model: ROIC is at 6.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sagentia Group ($SAG) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 22.268 | 30.596 | 28.329 | 31.220 | 36.899 | 18.2% |
| SG&A | | | 1.756 | 1.599 | | -100.0% |
| EBITDA | 3.512 | 5.770 | 5.372 | 5.392 | 4.957 | -8.1% |
| Net Income | 3.124 | 4.633 | 3.436 | 2.808 | 2.749 | -2.1% |
Balance Sheet
|
|---|
| Cash | 19.179 | 22.428 | 23.802 | 14.516 | 25.996 | 79.1% |
| Short Term Debt | 0.821 | 1.020 | 1.009 | 1.034 | 1.000 | -3.3% |
| Long Term Debt | 5.411 | 8.778 | 7.778 | 6.753 | 13.664 | 102.3% |
Cash flow
|
|---|
| Capex | 0.417 | 0.419 | 0.428 | 7.857 | 2.432 | -69.0% |
Ratios
|
|---|
| Revenue growth | -5.5% | 37.4% | -7.4% | 10.2% | 18.2% | |
| EBITDA growth | -14.1% | 64.3% | -6.9% | 0.4% | -8.1% | |
| EBITDA Margin | 15.8% | 18.9% | 19.0% | 17.3% | 13.4% | -3.8% |
| Net Income Margin | 14.0% | 15.1% | 12.1% | 9.0% | 7.5% | -1.5% |
| SG&A, % of revenue | | | 6.2% | 5.1% | | -5.1% |
| CAPEX, % of revenue | 1.9% | 1.4% | 1.5% | 25.2% | 6.6% | -18.6% |
| ROIC | 10.4% | 15.0% | 11.5% | 9.7% | 6.8% | -2.8% |
| ROE | 12.1% | 16.5% | 10.7% | 7.9% | 7.5% | -0.4% |
| Net Debt/EBITDA | -3.7x | -2.2x | -2.8x | -1.2x | -2.3x | -1.0x |
Revenue and profitability
Sagentia Group's Revenue jumped on 18.2% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 7.2% to 8.1% in FY2016.
Net Income marign decreased slightly on 1.5 pp from 9.0% to 7.5% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 6.6%. The company's CAPEX/Revenue increased on 5.2 pp from 1.4% in FY2013 to 6.6% in FY2016. It's average CAPEX/Revenue for the last three years was 11.1%.
Return on investment
The company operates at low ROIC (6.83%) and ROE (7.51%). ROIC decreased on 2.8 pp from 9.7% to 6.8% in FY2016. ROE showed almost no change in FY2016.
Leverage (Debt)
Debt level is -2.3x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA dropped on 1.0x from -1.2x to -2.3x in FY2016. Debt surged on 88.3% in FY2016 while cash jumped on 79.1% in FY2016.
Valuation
The company's trades at EV/EBITDA 12.0x and P/E 25.8x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 23.6x with the industry average at 19.0x.
Appendix 1: Peers in Support Services
Below we provide Sagentia 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 ($IBEX) | | 35.7% | 30.0% | 29.8% | 7.0% |
| |
|---|
| Median (55 companies) | 0.1% | 6.9% | 5.0% | 6.6% | 3.5% |
|---|
| Sagentia Group ($SAG) | | 37.4% | -7.4% | 10.2% | 18.2% |
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 ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
| |
|---|
| Median (50 companies) | 28.8% | 28.6% | 29.8% | 28.6% | 27.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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) | 6.7% | 6.3% | 6.8% | 6.9% | 7.1% |
|---|
| Sagentia Group ($SAG) | 15.8% | 18.9% | 19.0% | 17.3% | 13.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($VP.) | 21.4% | 17.7% | 21.6% | 25.7% | 24.1% |
| Nature Group ($NGR) | 14.3% | 7.2% | 5.6% | 22.9% | |
| Augean ($AUG) | 9.8% | 15.9% | 12.3% | 12.3% | |
| Falkland Islands Hldgs ($FKL) | 3.7% | 6.8% | 12.9% | 11.9% | 4.8% |
| Capital Drilling Ltd ($CAPD) | 18.9% | 4.9% | 13.9% | 10.1% | |
| |
|---|
| Median (55 companies) | 1.0% | 1.1% | 1.0% | 1.0% | 1.0% |
|---|
| Sagentia Group ($SAG) | 1.9% | 1.4% | 1.5% | 25.2% | 6.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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% | 15.4% |
| |
|---|
| Median (55 companies) | 9.5% | 7.8% | 9.3% | 10.4% | 11.3% |
|---|
| Sagentia Group ($SAG) | 10.4% | 15.0% | 11.5% | 9.7% | 6.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($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 | 0.7x | 0.6x | 0.4x | 0.6x |
|---|
| Sagentia Group ($SAG) | -3.7x | -2.2x | -2.8x | -1.2x | -2.3x |
