Augean EBITDA dropped on 30.7% in 2016 while Revenue surged on 24.5%
21 Mar 2017 • About Augean (
$AUG) • By InTwits
Augean reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Augean has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.2%. At the same time it's a lot of higher than industry average of 2.8%.
- CAPEX is quite volatile: 0.032 in FY2016, 0.044 in FY2015, 0.026 in FY2014, 0.082 in FY2013, 6.8 in FY2012
- The company has potentially unprofitable business model: ROIC is at 3.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Augean ($AUG) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 36.694 | 43.488 | 54.993 | 61.005 | 75.959 | 24.5% |
| EBITDA | 7.616 | 7.562 | 10.028 | 12.056 | 8.353 | -30.7% |
| Net Income | 1.966 | -1.787 | 4.921 | 1.635 | 0.405 | -75.2% |
Balance Sheet
|
|---|
| Cash | 0.005 | 0.542 | 1.502 | 3.553 | 3.188 | -10.3% |
| Short Term Debt | 0.837 | 0.114 | 1.045 | 1.054 | 0.171 | -83.8% |
| Long Term Debt | 5.283 | 8.919 | 6.169 | 6.764 | 13.833 | 104.5% |
Cash flow
|
|---|
| Capex | 3.585 | 6.898 | 6.741 | 7.474 | 8.335 | 11.5% |
Ratios
|
|---|
| Revenue growth | -2.0% | 18.5% | 26.5% | 10.9% | 24.5% | |
| EBITDA growth | 13.4% | -0.7% | 32.6% | 20.2% | -30.7% | |
| EBITDA Margin | 20.8% | 17.4% | 18.2% | 19.8% | 11.0% | -8.8% |
| Net Income Margin | 5.4% | -4.1% | 8.9% | 2.7% | 0.5% | -2.1% |
| CAPEX, % of revenue | 9.8% | 15.9% | 12.3% | 12.3% | 11.0% | -1.3% |
| ROIC | 8.3% | 8.8% | 10.7% | 11.4% | 3.3% | -8.2% |
| ROE | 4.1% | -3.7% | 9.8% | 3.1% | 0.7% | -2.3% |
| Net Debt/EBITDA | 0.8x | 1.1x | 0.6x | 0.4x | 1.3x | 0.9x |
Revenue and profitability
Augean's Revenue jumped on 24.5% in FY2016. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 8.8 pp from 19.8% to 11.0% in FY2016.
Net Income marign decreased on 2.1 pp from 2.7% to 0.53% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Augean had CAPEX/Revenue of 11.0%. CAPEX/Revenue decreased on 4.9 pp from 15.9% in FY2013 to 11.0% in FY2016. It's average level of CAPEX/Revenue for the last three years was 11.8%.Augean invested a big chunk of EBITDA (99.8%) to CAPEX to secure its growth.
Return on investment
The company operates at low ROIC (3.27%) and ROE (0.74%). ROIC decreased on 8.2 pp from 11.4% to 3.3% in FY2016. ROE decreased on 2.3 pp from 3.1% to 0.74% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is 1.7x. Net Debt / EBITDA surged on 0.9x from 0.4x to 1.3x in FY2016. Debt surged on 79.1% in FY2016 while cash dropped on 10.3% in FY2016.
Valuation
Augean's trades at EV/EBITDA 7.8x and P/E 133.5x while industy averages are 15.6x and 19.1x. The company's EV/(EBITDA-CAPEX) is 3,604.2x with the industry average at 19.0x.
Appendix 1: Peers in Support Services
Below you can find Augean benchmarking vs. other companies in Support 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 |
|---|
| Camco Clean Energy ($CCE) | | 88.0% | -54.7% | 99.4% | |
| Optimal Payments ($OPAY) | | 41.5% | 44.0% | 68.1% | 63.1% |
| 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 ($IBEX) | | 35.7% | 30.0% | 29.8% | 7.0% |
| |
|---|
| Median (55 companies) | 2.4% | 6.9% | 4.7% | 6.6% | 4.5% |
|---|
| Augean ($AUG) | | 18.5% | 26.5% | 10.9% | 24.5% |
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 ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
| |
|---|
| Median (50 companies) | 28.8% | 28.6% | 29.8% | 28.6% | 27.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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% | 7.3% |
|---|
| Augean ($AUG) | 20.8% | 17.4% | 18.2% | 19.8% | 11.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($VP.) | 21.4% | 17.7% | 21.6% | 25.7% | 24.1% |
| Sagentia Group ($SAG) | 1.9% | 1.4% | 1.5% | 25.2% | 6.6% |
| Nature Group ($NGR) | 14.3% | 7.2% | 5.6% | 22.9% | |
| 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% | 13.7% |
| |
|---|
| Median (55 companies) | 1.0% | 1.1% | 1.0% | 1.0% | 1.1% |
|---|
| Augean ($AUG) | 9.8% | 15.9% | 12.3% | 12.3% | 11.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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% | 22.7% |
| 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) | 9.9% | 7.8% | 9.3% | 10.2% | 10.3% |
|---|
| Augean ($AUG) | 8.3% | 8.8% | 10.7% | 11.4% | 3.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($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 | 0.5x | 0.6x | 0.4x | 0.5x |
|---|
| Augean ($AUG) | 0.8x | 1.1x | 0.6x | 0.4x | 1.3x |
