Bioquell Net Income dropped on 98.9% in 2016 and Revenue decreased slightly on 1.5%

07 Mar 2017 • About Bioquell ($BQE) • By InTwits

Bioquell reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

Bioquell doesn't have a profitable business model yet: FY2016 ROIC is 0.7%
EBITDA Margin is declining: 10.9% in FY2016 vs. 12.8% in FY2015 vs. 19.0% in FY2012
Bioquell has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.4%. At the same time it's in pair with industry average of 6.4%.
CAPEX is quite volatile: 0.72 in FY2016, 1.0 in FY2015, 2.4 in FY2014, 3.9 in FY2013, 3.1 in FY2012
The company has potentially unprofitable business model: ROIC is at 0.7%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Bioquell ($BQE) key annual financial indicators

mln. £	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	40.995	44.637	27.266	26.877	26.485	-1.5%
Gross Profit	19.635	20.603	11.396	11.411	12.745	11.7%
SG&A		14.673	10.700	9.133	9.345	2.3%
EBITDA	7.799	7.197	3.579	3.441	2.900	-15.7%
Net Income	3.994	3.051	-1.017	35.138	0.397	-98.9%
Balance Sheet
Cash	3.010	3.550	2.840	47.573	8.756	-81.6%
Short Term Debt	0.105	0.224	0.328	0.000	0.000
Long Term Debt	0.968	1.309	1.433	0.000	0.000
Cash flow
Capex	3.109	3.940	2.418	1.030	0.723	-29.8%
Ratios
Revenue growth	-0.6%	8.9%	-38.9%	-1.4%	-1.5%
EBITDA growth	-4.8%	-7.7%	-50.3%	-3.9%	-15.7%
Gross Margin	47.9%	46.2%	41.8%	42.5%	48.1%	5.7%
EBITDA Margin	19.0%	16.1%	13.1%	12.8%	10.9%	-1.9%
Net Income Margin	9.7%	6.8%	-3.7%	130.7%	1.5%	-129.2%
SG&A, % of revenue		32.9%	39.2%	34.0%	35.3%	1.3%
CAPEX, % of revenue	7.6%	8.8%	8.9%	3.8%	2.7%	-1.1%
ROIC	12.1%	7.9%	-1.8%	1.6%	0.7%	-0.9%
ROE	13.7%	9.5%	-3.2%	73.2%	0.9%	-72.3%
Net Debt/EBITDA	-0.2x	-0.3x	-0.3x	-13.8x	-3.0x	10.8x

Revenue and profitability

The company's Revenue decreased slightly on 1.5% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.9 pp from 12.8% to 10.9% in FY2016.

Gross Margin increased on 5.7 pp from 42.5% to 48.1% in FY2016. SG&A as a % of Revenue increased slightly on 1.3 pp from 34.0% to 35.3% in FY2016.

Net Income marign dropped on 129 pp from 131% to 1.5% in FY2016.

Capital expenditures (CAPEX) and working capital investments

Bioquell's CAPEX/Revenue was 2.7% in FY2016. The company showed decline in CAPEX/Revenue of 6.1 pp from 8.8% in FY2013 to 2.7% in FY2016. It's average CAPEX/Revenue for the last three years was 5.1%.

Return on investment

The company operates at low ROIC (0.73%) and ROE (0.89%). ROIC decreased slightly on 0.91 pp from 1.6% to 0.73% in FY2016. ROE dropped on 72.3 pp from 73.2% to 0.89% in FY2016.

Leverage (Debt)

The company has no debt. Cash dropped on 81.6% in FY2016.

Appendix 1: Peers in Health Care Equipment & Services

Below we provide Bioquell benchmarking against other companies in Health Care Equipment & 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
Puricore ($PURI)	11.3%	-33.6%	-45.5%	36.5%
Md Medical Group Invest ($MDMG)	39.7%	39.7%	26.9%	32.0%
Tristel ($TSTL)		-3.5%	27.6%	13.8%	11.5%
Lifeline Scientific Inc ($LSIC)	18.7%	10.2%	6.0%	11.8%
Synergy Health ($SYR)	8.6%	15.8%	5.3%	7.5%
Median (10 companies)	18.7%	3.2%	5.7%	5.9%	2.2%
Bioquell ($BQE)		8.9%	-38.9%	-1.4%	-1.5%

Top companies by Gross margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Smith & Nephew ($SN.)	74.1%	74.7%	74.8%	75.3%	72.8%
Tristel ($TSTL)	67.9%	66.4%	69.8%	69.5%	73.4%
Omega Diagnostics Group ($ODX)	63.0%	62.6%	63.6%	63.4%	63.8%
Immunodiagnostic Systems Hldgs ($IDH)	74.7%	73.1%	68.1%	62.5%	58.6%
Lifeline Scientific Inc ($LSIC)	60.6%	59.8%	61.3%	60.2%
Median (10 companies)	57.8%	56.5%	57.9%	58.7%	63.8%
Bioquell ($BQE)	47.9%	46.2%	41.8%	42.5%	48.1%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Md Medical Group Invest ($MDMG)	41.7%	28.0%	28.9%	27.9%
Synergy Health ($SYR)	26.0%	26.4%	25.8%	24.3%
Immunodiagnostic Systems Hldgs ($IDH)		35.3%	34.1%	23.6%	-77.1%
Smith & Nephew ($SN.)	27.8%	26.9%	25.2%	23.1%	26.0%
Tristel ($TSTL)	17.0%	13.7%	20.1%	22.9%	20.7%
Median (10 companies)	17.0%	16.6%	20.3%	22.1%	20.7%
Bioquell ($BQE)	19.0%	16.1%	13.1%	12.8%	10.9%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Synergy Health ($SYR)	15.2%	13.2%	10.3%	15.1%
Md Medical Group Invest ($MDMG)	65.2%	42.8%	43.4%	8.2%
Smith & Nephew ($SN.)	6.4%	7.8%	8.1%	7.7%	8.4%
Ekf Diagnostics Holdings ($EKF)	3.7%	3.7%	2.8%	7.6%
Puricore ($PURI)	2.4%	3.2%	15.4%	7.3%
Median (10 companies)	5.7%	4.5%	5.2%	6.8%	4.9%
Bioquell ($BQE)	7.6%	8.8%	8.9%	3.8%	2.7%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Lifeline Scientific Inc ($LSIC)	1.9%	11.2%	11.7%	24.0%
Tristel ($TSTL)	6.5%	3.5%	15.9%	20.1%	17.5%
Md Medical Group Invest ($MDMG)	19.9%	9.5%	11.0%	11.8%
Smith & Nephew ($SN.)	22.0%	18.6%	14.7%	11.1%	14.4%
Abbott Laboratories ($ABT)	4.3%	5.3%	8.3%	9.4%	8.6%
Median (10 companies)	4.3%	5.3%	10.0%	9.2%	8.6%
Bioquell ($BQE)	12.1%	7.9%	-1.8%	1.6%	0.7%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Synergy Health ($SYR)	2.1x	1.9x	1.5x	1.6x
Smith & Nephew ($SN.)	0.3x	0.2x	1.4x	1.3x	1.3x
Abbott Laboratories ($ABT)	2.1x	0.8x	0.9x	0.9x	0.7x
Md Medical Group Invest ($MDMG)	0.2x	0.2x	2.0x	0.6x
Lifeline Scientific Inc ($LSIC)	-4.4x	-0.6x	-0.3x	-1.0x
Median (8 companies)	0.2x	0.1x	-0.3x	-0.2x	0.0x
Bioquell ($BQE)	-0.2x	-0.3x	-0.3x	-13.8x	-3.0x

Bioquell stock price chart

Bioquell financials

mln.	FY2010	FY2011	FY2012

Revenue	39.403	41.256	40.995
EBITDA	6.475	8.188	7.799
Net income	2.407	3.865	3.994
CAPEX	2.710	3.959	3.109
Debt	1.460	1.177	1.073
Cash	6.130	5.179	3.010

About Bioquell

Bioquell PLC designs, manufactures, and supplies bio-decontamination and containment equipment, and related products and services to the pharmaceutical, healthcare, food, and defense industries in the United Kingdom and internationally. It also offers testing services for the aerospace, telecoms, and other industries. The company operates in two divisions, Bio-decontamination; and Testing, Regulatory, and Compliance (TRaC). The Bio-decontamination division provides hydrogen peroxide vapour technology used to eradicate problematic bacteria, viruses, and fungi; aqueous oxygen peroxide for wound care; and chemical, biological, radiological, and nuclear filtration systems, as well as environmental control equipment for the life sciences, healthcare, and defense sectors. The TRaC division provides a range of services, including environmental testing, telecoms testing, radio testing, EMC testing, safety testing, and CE mark testing. This division also provides various engineering services comprising finite element analysis and seismic testing. The company was incorporated in 1925 and is based in Andover, the United Kingdom.