Ekf Diagnostics Holdings revenue surged on 28.4% in 2016 and EBITDA Margin jumped on 12.5 pp from -0.47% to 12.0%

20 Mar 2017 • About Ekf Diagnostics Holdings ($EKF) • By InTwits

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

Ekf Diagnostics Holdings doesn't have a profitable business model yet: FY2016 ROIC is -0.5%
EBITDA Margin is quite volatile: 12.0% in FY2016, -0.5% in FY2015, 18.1% in FY2014, 12.9% in FY2013, 10.2% in FY2012
Ekf Diagnostics Holdings has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's in pair with industry average of 5.8%.
CAPEX is quite volatile: 1.3 in FY2016, 2.3 in FY2015, 1.0 in FY2014, 1.2 in FY2013, 0.96 in FY2012
The company has unprofitable business model: ROIC is at -0.5%
It operates with high leverage: Net Debt/EBITDA is -0.5x while industry average is -0.4x

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

Ekf Diagnostics Holdings ($EKF) key annual financial indicators

mln. £	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	26.060	31.804	37.106	30.045	38.589	28.4%
Gross Profit	14.313	16.345	19.246	14.669	18.322	24.9%
SG&A		14.439	21.557	29.156	18.734	-35.7%
EBITDA	2.665	4.115	6.724	-0.142	4.634	-3,363.4%
Net Income	1.830	-1.126	-5.689	-37.123	-0.018	-100.0%
Balance Sheet
Cash	4.331	2.551	8.346	2.017	7.874	290.4%
Short Term Debt	0.280	0.332	3.754	9.675	4.588	-52.6%
Long Term Debt	2.031	2.108	2.492	1.167	1.130	-3.2%
Cash flow
Capex	0.961	1.185	1.038	2.296	1.261	-45.1%
Ratios
Revenue growth	20.3%	22.0%	16.7%	-19.0%	28.4%
EBITDA growth	227.0%	54.4%	63.4%	-102.1%	-3,363.4%
Gross Margin	54.9%	51.4%	51.9%	48.8%	47.5%	-1.3%
EBITDA Margin	10.2%	12.9%	18.1%	-0.5%	12.0%	12.5%
Net Income Margin	7.0%	-3.5%	-15.3%	-123.6%	-0.0%	123.5%
SG&A, % of revenue		45.4%	58.1%	97.0%	48.5%	-48.5%
CAPEX, % of revenue	3.7%	3.7%	2.8%	7.6%	3.3%	-4.4%
ROIC	-0.9%	1.2%	2.3%	-9.4%	-0.5%	8.9%
ROE	4.8%	-2.8%	-8.9%	-55.6%	-0.0%	55.6%
Net Debt/EBITDA	-0.8x	-0.0x	-0.3x		-0.5x	-0.5x

Revenue and profitability

Ekf Diagnostics Holdings's Revenue jumped on 28.4% in FY2016. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 12.5 pp from -0.47% to 12.0% in FY2016.

Gross Margin decreased slightly on 1.3 pp from 48.8% to 47.5% in FY2016. SG&A as a % of Revenue dropped on 48.5 pp from 97.0% to 48.5% in FY2016.

Net Income marign jumped on 124 pp from -124% to -0.047% in FY2016.

Capital expenditures (CAPEX) and working capital investments

In FY2016 Ekf Diagnostics Holdings had CAPEX/Revenue of 3.3%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. For the last three years the average CAPEX/Revenue was 4.6%.

Return on investment

The company operates at negative ROIC (-0.48%) and ROE (-0.03%). ROIC increased on 8.9 pp from -9.4% to -0.48% in FY2016. ROE surged on 55.6 pp from -55.6% to -0.034% in FY2016.

Leverage (Debt)

Debt level is -0.5x Net Debt / EBITDA and 1.2x Debt / EBITDA. Net Debt / EBITDA dropped0.5x from to -0.5x in FY2016. Debt dropped on 47.3% in FY2016 while cash jumped on 290% in FY2016.

Appendix 1: Peers in Health Care Equipment & Services

Below you can find Ekf Diagnostics Holdings benchmarking vs. other companies in Health Care Equipment & 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
Puricore ($PURI)	11.3%	-33.6%	-45.5%	36.5%
Md Medical Group Invest ($MDMG)		39.7%	26.9%	32.0%	28.1%
Tristel ($TSTL)		-3.5%	27.6%	13.8%	11.5%
Lifeline Scientific Inc ($LSIC)	18.7%	10.2%	6.0%	11.8%
Synergy Health ($SYR)	8.6%	15.8%	5.3%	7.5%
Median (10 companies)	11.3%	3.2%	5.2%	5.9%	2.2%
Ekf Diagnostics Holdings ($EKF)		22.0%	16.7%	-19.0%	28.4%

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 ($LSIC)	60.6%	59.8%	61.3%	60.2%
Median (10 companies)	57.5%	56.5%	57.9%	58.7%	61.2%
Ekf Diagnostics Holdings ($EKF)	54.9%	51.4%	51.9%	48.8%	47.5%

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 ($TSTL)	17.0%	13.7%	20.1%	22.9%	20.7%
Median (10 companies)	19.0%	17.9%	20.3%	22.1%	15.8%
Ekf Diagnostics Holdings ($EKF)	10.2%	12.9%	18.1%	-0.5%	12.0%

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 ($SN.)	6.4%	7.8%	8.1%	7.7%	8.4%
Puricore ($PURI)	2.4%	3.2%	15.4%	7.3%
Immunodiagnostic Systems Hldgs ($IDH)	5.7%	5.3%	4.4%	6.3%	4.7%
Median (10 companies)	6.1%	5.6%	6.7%	6.1%	4.8%
Ekf Diagnostics Holdings ($EKF)	3.7%	3.7%	2.8%	7.6%	3.3%

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 ($ABT)	4.3%	5.3%	8.3%	9.4%	8.6%
Median (10 companies)	6.5%	7.9%	10.0%	9.2%	6.0%
Ekf Diagnostics Holdings ($EKF)	-0.9%	1.2%	2.3%	-9.4%	-0.5%

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 (9 companies)	0.2x	-0.0x	-0.3x	-1.0x	-0.7x

Ekf Diagnostics Holdings stock price chart

Ekf Diagnostics Holdings financials

mln.	FY2010	FY2011	FY2012

Revenue	6.483	21.658	26.060
EBITDA	1.158	0.815	2.665
Net income	-3.435	-2.884	1.830
CAPEX	2.474	1.555	0.961
Debt	0.538	2.532	2.311
Cash	3.192	5.338	4.331

About Ekf Diagnostics Holdings

EKF Diagnostics Holdings plc is engaged in the design, development, manufacture, and sale of diagnostic instruments, reagents, and other ancillary products in the United Kingdom, the United States, Germany, Poland, Russia, Ireland, and Asia. The company offers near patient analyzers for the measurement of glucose, lactate, hemoglobin, hematocrit, and HbA1c. Its products include glycated hemoglobin analyzers, such as Quo-Test, Quo-Lab, and Biosen HbA1c analyzers for monitoring diabetes; hemoglobin analyzers consisting of Hemo Control and Hemo Vet, which are point of care devices to provide results for hemoglobin and hematocrit, as well as STAT-Site M Hgb, a hand-held device for blood screening programs; and glucose analyzers comprising Biosen C-Line and S-Line glucose and lactate analyzers, and Lactate Scout+, a hand-held lactate analyzer. The company also provides rapid testing services, including pregnancy tests, such as True20, QuPID, and QuStick for urine only or urine and serum pregnancy testing; and infectious diseases tests, such as H. Pylori, RELY Mono, RELY and Strep A, and QuStick for the detection of pathonogenic micro-organisms, such as bacteria, parasites, viruses, and fungi. In addition, it offers clinical chemistry reagents; and biomarker diagnostic kits used by researchers and clinicians, as well as molecular diagnostic test kits, which are focused on applications within oncological research. The company sells its products to GP surgeries, pharmacies, blood banks, sports clinics, hospitals, and laboratories through a network of distributors. EKF Diagnostics Holdings plc was founded in 1990 and is headquartered in Cardiff, the United Kingdom.