Norish CAPEX surged on 234% in 2016 and Revenue surged on 16.7%
23 Mar 2017 • About Norish (
$NSH) • By InTwits
Norish reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Norish has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.8%. At the same time it's a lot of higher than industry average of 2.9%.
- CAPEX is quite volatile: 1.7 in FY2016, 0.50 in FY2015, 3.6 in FY2014, 0.32 in FY2013, 1.5 in FY2012
- The company has potentially unprofitable business model: ROIC is at 3.7%
- It operates with high leverage: Net Debt/EBITDA is 3.5x while industry average is 1.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Norish ($NSH) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14.876 | 22.811 | 23.645 | 27.515 | 32.098 | 16.7% |
| Gross Profit | 0.858 | 1.067 | 1.599 | 1.283 | 1.341 | 4.5% |
| SG&A | | | 0.467 | 0.447 | 0.707 | 58.2% |
| EBITDA | 1.134 | 2.241 | 1.933 | 1.455 | 1.497 | 2.9% |
| Net Income | -0.079 | -0.079 | 0.307 | 0.291 | 0.291 | 0.0% |
Balance Sheet
|
|---|
| Cash | 0.103 | 0.049 | 0.385 | 4.383 | 2.044 | -53.4% |
| Short Term Debt | 2.216 | 3.029 | 2.316 | 3.473 | 4.282 | 23.3% |
| Long Term Debt | 5.890 | 3.901 | 5.085 | 4.123 | 3.006 | -27.1% |
Cash flow
|
|---|
| Capex | 1.515 | 0.324 | 3.645 | 0.502 | 1.677 | 234.1% |
Ratios
|
|---|
| Revenue growth | 32.7% | 53.3% | 3.7% | 16.4% | 16.7% | |
| EBITDA growth | -8.2% | 97.6% | -13.7% | -24.7% | 2.9% | |
| Gross Margin | 5.8% | 4.7% | 6.8% | 4.7% | 4.2% | -0.5% |
| EBITDA Margin | 7.6% | 9.8% | 8.2% | 5.3% | 4.7% | -0.6% |
| Net Income Margin | -0.5% | -0.3% | 1.3% | 1.1% | 0.9% | -0.2% |
| SG&A, % of revenue | | | 2.0% | 1.6% | 2.2% | 0.6% |
| CAPEX, % of revenue | 10.2% | 1.4% | 15.4% | 1.8% | 5.2% | 3.4% |
| ROIC | 3.3% | 5.5% | 6.5% | 3.9% | 3.7% | -0.3% |
| ROE | -1.0% | -1.0% | 3.3% | 2.3% | 1.9% | -0.4% |
| Net Debt/EBITDA | 7.1x | 3.1x | 3.6x | 2.2x | 3.5x | 1.3x |
Revenue and profitability
Norish's Revenue jumped on 16.7% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 10.0 pp from 4.1% to 14.1% in FY2016.
Gross Margin showed almost no change in FY2016. SG&A as a % of Revenue increased slightly on 0.58 pp from 1.6% to 2.2% in FY2016.
Net Income marign showed almost no change in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 5.2%. The company showed CAPEX/Revenue growth of 3.8 pp from 1.4% in FY2013 to 5.2% in FY2016. It's average CAPEX/Revenue for the last three years was 7.5%.The company has spent a lot to CAPEX (112% of EBITDA) to fuel its growth.
Return on investment
The company operates at low ROIC (3.68%) and ROE (1.90%). ROIC showed almost no change in FY2016. ROE showed almost no change in FY2016.
Leverage (Debt)
Debt level is 3.5x Net Debt / EBITDA and 4.9x Debt / EBITDA. Net Debt / EBITDA surged on 1.3x from 2.2x to 3.5x in FY2016. Debt decreased on 4.1% in FY2016 while cash dropped on 53.4% in FY2016.
Valuation
Norish's trades at EV/EBITDA 10.9x and P/E 37.9x while industy averages are 15.6x and 19.1x.
Appendix 1: Peers in Support Services
Below we provide Norish 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) | | 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 ($IBEX) | | 35.7% | 30.0% | 29.8% | 7.0% |
| |
|---|
| Median (55 companies) | 0.1% | 6.9% | 5.0% | 6.6% | 4.6% |
|---|
| Norish ($NSH) | | 53.3% | 3.7% | 16.4% | 16.7% |
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 ($PRP) | 63.4% | 58.3% | 57.7% | 61.4% | 59.2% |
| |
|---|
| Median (49 companies) | 29.5% | 28.8% | 30.4% | 28.7% | 27.1% |
|---|
| Norish ($NSH) | 5.8% | 4.7% | 6.8% | 4.7% | 4.2% |
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% | 7.6% | 7.5% |
|---|
| Norish ($NSH) | 7.6% | 9.8% | 8.2% | 5.3% | 4.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vp ($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% | |
| Augean ($AUG) | 9.8% | 15.9% | 12.3% | 12.3% | 11.0% |
| Falkland Islands Hldgs ($FKL) | 3.7% | 6.8% | 12.9% | 11.9% | 4.8% |
| |
|---|
| Median (55 companies) | 1.0% | 1.1% | 1.0% | 1.0% | 1.1% |
|---|
| Norish ($NSH) | 10.2% | 1.4% | 15.4% | 1.8% | 5.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 21St Century Technology ($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% | 7.9% | 9.4% | 10.4% | 9.4% |
|---|
| Norish ($NSH) | 3.3% | 5.5% | 6.5% | 3.9% | 3.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Redhall Group ($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 | 0.6x |
|---|
| Norish ($NSH) | 7.1x | 3.1x | 3.6x | 2.2x | 3.5x |
