Stm Group reports 7.8% revenue growth in FY2016 and 1.4 pp EBITDA Margin decline from 19.2% to 17.8%
14 Mar 2017 • About Stm Group (
$STM) • By InTwits
Stm Group reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Stm Group is a growth stock: FY2016 revenue growth was 7.8%, 5 year revenue CAGR was 12.4% at FY2016 ROIC 10.5%
- EBITDA Margin is quite volatile: 17.8% in FY2016, 19.2% in FY2015, 14.5% in FY2014, 7.0% in FY2013, 8.6% in FY2012
- Stm Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has business model with average profitability: ROIC is at 10.5%
- It operates with high leverage: Net Debt/EBITDA is -3.8x while industry average is -4.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Stm Group ($STM) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 11.550 | 13.357 | 15.878 | 16.179 | 17.433 | 7.8% |
| SG&A | | 12.419 | 13.575 | 13.078 | 14.318 | 9.5% |
| EBITDA | 0.995 | 0.938 | 2.303 | 3.101 | 3.104 | 0.1% |
| Net Income | -4.266 | -0.111 | 1.051 | 2.296 | 2.373 | 3.4% |
Balance Sheet
|
|---|
| Cash | 3.384 | 4.090 | 5.711 | 8.036 | 11.869 | 47.7% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.300 | 0.000 | -100.0% |
| Long Term Debt | 3.450 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.111 | 0.134 | 0.037 | 0.066 | 0.204 | 209.1% |
Ratios
|
|---|
| Revenue growth | 18.7% | 15.6% | 18.9% | 1.9% | 7.8% | |
| EBITDA growth | 58.4% | -5.7% | 145.5% | 34.7% | 0.1% | |
| EBITDA Margin | 8.6% | 7.0% | 14.5% | 19.2% | 17.8% | -1.4% |
| Net Income Margin | -36.9% | -0.8% | 6.6% | 14.2% | 13.6% | -0.6% |
| SG&A, % of revenue | | 93.0% | 85.5% | 80.8% | 82.1% | 1.3% |
| CAPEX, % of revenue | 1.0% | 1.0% | 0.2% | 0.4% | 1.2% | 0.8% |
| ROIC | 0.6% | 2.7% | 9.1% | 11.8% | 10.5% | -1.2% |
| ROE | -18.8% | -0.5% | 4.8% | 9.5% | 8.8% | -0.7% |
| Net Debt/EBITDA | 0.1x | -4.4x | -2.5x | -2.5x | -3.8x | -1.3x |
Revenue and profitability
The company's Revenue increased on 7.8% in FY2016. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.4 pp from 19.2% to 17.8% in FY2016.
SG&A as a % of Revenue increased slightly on 1.3 pp from 80.8% to 82.1% in FY2016.
Net Income marign decreased slightly on 0.58 pp from 14.2% to 13.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.2% in FY2016. The company showed almost no change in CAPEX/Revenue from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 0.60%.
Return on investment
The company operates at low ROIC (10.52%) and ROE (8.84%). ROIC decreased slightly on 1.2 pp from 11.8% to 10.5% in FY2016. ROE decreased slightly on 0.67 pp from 9.5% to 8.8% in FY2016.
Leverage (Debt)
The company paid down all the debt in FY2016. Cash surged on 47.7% in FY2016.
Valuation
The company's trades at EV/EBITDA 2.9x and P/E 8.8x while industy averages are 15.6x and 19.1x.
Appendix 1: Peers in Financial Services
Below you can find Stm Group benchmarking vs. other companies in Financial Services 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 |
|---|
| Volvere ($VLE) | -47.1% | 149.8% | -23.2% | 124.9% | |
| Real Estate Credit Investments Pcc ($RECP) | | 335.8% | -59.6% | 47.3% | -29.8% |
| Fairpoint Group ($FRP) | 32.7% | -17.5% | 35.1% | 41.2% | |
| Afh Financial Group ($AFHP) | | 49.9% | 39.3% | 39.5% | 15.0% |
| Manx Financial Group ($MFX) | 5.6% | 33.3% | 22.0% | 28.2% | |
| |
|---|
| Median (30 companies) | 5.6% | 12.6% | 4.7% | 2.9% | 2.3% |
|---|
| Stm Group ($STM) | | 15.6% | 18.9% | 1.9% | 7.8% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Record ($REC) | 98.8% | 98.8% | 99.6% | 99.3% | 99.0% |
| Panmure Gordon & Co ($PMR) | 95.2% | 95.0% | 95.3% | 95.2% | |
| First Property Group ($FPO) | 86.0% | 69.5% | 67.9% | 83.0% | 80.6% |
| Schroders ($SDRC) | 76.9% | 76.2% | 77.7% | 78.3% | 79.9% |
| London Capital Group Hldgs ($LCG) | 64.2% | 70.5% | 73.6% | 67.9% | |
| |
|---|
| Median (16 companies) | 54.3% | 52.7% | 52.2% | 52.5% | 55.4% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Livermore Investments Group Ltd ($LIV) | 84.9% | 64.8% | 78.8% | 83.5% | |
| Real Estate Credit Investments Pcc ($RECP) | 58.6% | 89.3% | 77.0% | 80.3% | 79.3% |
| Manx Financial Group ($MFX) | 39.8% | 49.2% | 56.5% | 58.8% | |
| Hargreaves Lansdown ($HL.) | 64.1% | 66.4% | 58.7% | 51.2% | 57.5% |
| Daishin Securities Co ($DSS) | 53.8% | 51.5% | 38.8% | 49.2% | 38.9% |
| |
|---|
| Median (28 companies) | 14.9% | 17.0% | 16.6% | 15.9% | 15.5% |
|---|
| Stm Group ($STM) | 8.6% | 7.0% | 14.5% | 19.2% | 17.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| London Capital Group Hldgs ($LCG) | 1.8% | 0.2% | 3.4% | 7.7% | |
| Daishin Securities Co ($DSS) | 6.0% | 24.7% | 15.0% | 6.5% | 15.1% |
| Commercial Bank Of Qatar(The) ($CBQS) | 6.0% | 3.8% | 2.8% | 3.9% | 3.3% |
| Nmbz Hldgs ($NMB) | 6.1% | 3.0% | 2.1% | 3.8% | |
| Afh Financial Group ($AFHP) | 1.6% | 1.5% | 0.7% | 3.8% | 1.8% |
| |
|---|
| Median (29 companies) | 1.4% | 1.4% | 1.3% | 1.2% | 1.5% |
|---|
| Stm Group ($STM) | 1.0% | 1.0% | 0.2% | 0.4% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hargreaves Lansdown ($HL.) | 108.7% | 111.7% | 101.0% | 87.5% | 90.0% |
| Manx Financial Group ($MFX) | 8.0% | 19.7% | 29.7% | 40.2% | |
| Record ($REC) | 23.8% | 19.6% | 20.2% | 20.2% | 18.5% |
| Impax Asset Management Group ($IPX) | -13.7% | 17.2% | 18.7% | 16.1% | 15.0% |
| Lighthouse Group ($LGT) | 7.2% | -3.9% | 8.6% | 14.6% | 25.7% |
| |
|---|
| Median (30 companies) | 5.5% | 6.3% | 8.9% | 7.3% | 8.9% |
|---|
| Stm Group ($STM) | 0.6% | 2.7% | 9.1% | 11.8% | 10.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Private & Commercial Finance Group ($PCF) | 12.8x | 14.3x | 13.9x | 12.9x | 10.6x |
| First Property Group ($FPO) | 3.6x | 3.0x | 5.6x | 12.3x | 9.4x |
| Canaccord Genuity Group Inc ($CF.) | | | | 10.2x | |
| Daishin Securities Co ($DSS) | 1.5x | 2.4x | 10.7x | 8.0x | 13.4x |
| S & U ($46IE) | 1.4x | 1.3x | 1.7x | 3.1x | 0.5x |
| |
|---|
| Median (25 companies) | -1.2x | -1.0x | -1.9x | -0.5x | -0.4x |
|---|
| Stm Group ($STM) | 0.1x | -4.4x | -2.5x | -2.5x | -3.8x |
