Clarke(T.) revenue growth decelerated to 14.9% in FY2016 vs. 16.6% a year earliner

28 Mar 2017 • About Clarke(T.) ($CTO) • By InTwits

Clarke(T.) reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts: It operates with high leverage: Net Debt/EBITDA is 10.3x while industry average is 1.2x.

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

Clarke(T.) ($CTO) key annual financial indicators

mln. £	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	193.8	217.1	207.9	242.4	278.6	14.9%
Gross Profit	23.9	23.4	22.4	27.5		-100.0%
SG&A	22.3	21.2	22.6	23.2		-100.0%
EBITDA	2.7	3.2	0.7	5.1		-100.0%
Net Income	0.8	1.1	-0.6	0.1	2.4	2,300.0%
Balance Sheet
Cash	5.6	1.0	10.3	11.7		-100.0%
Short Term Debt	0.1	0.1	0.1	0.1		-100.0%
Long Term Debt	0.0	0.0	5.0	5.0		-100.0%
Cash flow
Capex	0.6	0.4	0.5	0.5		-100.0%
Ratios
Revenue growth	5.5%	12.0%	-4.2%	16.6%	14.9%
EBITDA growth	-58.2%	18.0%	-78.1%	628.6%
Gross Margin	12.3%	10.8%	10.8%	11.3%		-11.3%
EBITDA Margin	1.4%	1.5%	0.3%	2.1%	0.0%	-2.1%
Net Income Margin	0.4%	0.5%	-0.3%	0.0%	0.9%	0.8%
SG&A, % of revenue	11.5%	9.8%	10.9%	9.6%		-9.6%
CAPEX, % of revenue	0.3%	0.2%	0.2%	0.2%		-0.2%
ROIC	6.9%	9.9%	-0.4%	19.6%		-19.6%
ROE	3.4%	4.5%	-2.8%	0.5%		-0.5%
Net Debt/EBITDA	-2.0x	-0.3x	-7.4x	-1.3x		1.3x

Revenue and profitability

Clarke(T.)'s Revenue jumped on 14.9% in FY2016.

Net Income marign increased slightly on 0.82 pp from 0.041% to 0.86% in FY2016.

Appendix 1: Peers in Construction & Materials

Below we provide Clarke(T.) benchmarking against other companies in Construction & Materials 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
Kingspan Group ($KGP)		9.1%	6.4%	46.7%	12.0%
Accsys Technologies ($AXS)		25.5%	78.0%	37.5%	14.5%
Billington Hldgs ($BILN)		8.4%	14.5%	25.8%	11.6%
Crh ($CRH)		-0.3%	4.9%	25.0%	14.7%
Titon Hldgs ($TON)		8.2%	22.3%	15.6%	6.6%
Median (25 companies)	0.5%	5.5%	8.9%	1.6%	8.9%
Clarke(T.) ($CTO)		12.0%	-4.2%	16.6%	14.9%

Top companies by Gross margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Inch Kenneth Kajang Rubber ($IKK)	46.5%	24.5%	21.7%	51.7%
Swp Group ($SWP)	43.0%	48.1%	39.2%	49.7%
Heath(Samuel)& Sons ($HSM)	49.5%	47.3%	48.6%	47.6%	48.1%
James Halstead ($JHD)	41.2%	41.6%	41.0%	41.7%	42.4%
Michelmersh Brick Hldgs ($MBH)	35.3%	28.4%	31.1%	38.2%	34.4%
Median (23 companies)	25.4%	25.2%	27.0%	29.3%	33.0%
Clarke(T.) ($CTO)	12.3%	10.8%	10.8%	11.3%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Lucky Cement Ltd ($LKCS)	31.5%	26.8%	24.4%	26.5%	30.4%
Steppe Cement ($STCM)	20.8%	23.2%	14.3%	24.7%
James Halstead ($JHD)	20.2%	19.8%	20.1%	20.9%	21.6%
Michelmersh Brick Hldgs ($MBH)	10.6%	7.9%	14.1%	20.3%	18.7%
LSR Group OJSC ($LSRG)	20.2%	19.5%	22.9%	19.3%
Median (25 companies)	8.7%	7.4%	9.7%	9.7%	10.6%
Clarke(T.) ($CTO)	1.4%	1.5%	0.3%	2.1%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Inch Kenneth Kajang Rubber ($IKK)	74.2%	5.4%	12.8%	54.9%	754.9%
Lucky Cement Ltd ($LKCS)	3.2%	5.2%	6.9%	12.0%	8.9%
Billington Hldgs ($BILN)	1.0%	1.1%	2.9%	10.8%	2.0%
Low & Bonar ($BD46)	3.5%	2.8%	4.6%	9.1%	4.7%
Superglass Hldgs ($SPGH)	12.9%	14.2%	3.4%	7.9%
Median (25 companies)	2.2%	2.5%	2.6%	2.3%	3.1%
Clarke(T.) ($CTO)	0.3%	0.2%	0.2%	0.2%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
James Halstead ($JHD)	49.3%	46.2%	46.7%	45.3%	47.1%
Alumasc Group ($ALU)	6.5%	17.5%	22.6%	36.0%	47.8%
Heath(Samuel)& Sons ($HSM)	9.7%	8.7%	19.7%	32.0%	89.2%
Aukett Swanke Group ($AUK)	2.7%	11.4%	27.3%	31.6%	9.6%
Lucky Cement Ltd ($LKCS)	23.8%	22.9%	20.3%	20.0%	20.8%
Median (25 companies)	4.0%	7.2%	7.4%	7.8%	9.6%
Clarke(T.) ($CTO)	6.9%	9.9%	-0.4%	19.6%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Mountfield Group ($MOGP)	26.3x	4.8x	52.0x	18.8x
Asia Cement Corp ($ASCD)	7.8x	6.9x	6.8x	8.6x
Crh ($CRH)	2.0x	3.6x	1.6x	3.1x	1.7x
Low & Bonar ($BD46)	2.7x	2.1x	2.1x	2.4x	2.1x
Saint-Gobain(Compagnie De) ($COD)	2.1x	2.0x	2.1x	1.4x	1.5x
Median (21 companies)	1.7x	0.8x	0.5x	-0.0x	-0.8x
Clarke(T.) ($CTO)	-2.0x	-0.3x	-7.4x	-1.3x

Clarke(T.) stock price chart

Clarke(T.) financials

mln.	FY2010	FY2011	FY2012

Revenue	179.0	183.8	193.8
EBITDA	7.058	6.486	2.713
Net income	3.604	4.009	0.848
CAPEX	0.297	0.699	0.594
Debt	1.349	0.253	0.169
Cash	8.252	0.624	5.572

About Clarke(T.)

TClarke plc, together with its subsidiaries, operates as a building services contractor in the United Kingdom. It operates in three divisions: the South, the North, and Scotland. The company offers electrical and mechanical contracting and related services to the construction industry and end users; and works on data and power projects. It also provides various building systems and solutions, such as structured cabling systems, network infrastructure and security, data center and server room installation, wireless networks, IP CCTV solutions, IP access control systems, IP TV distribution, IP telephony, fire alarm integration, audio visual installations, central monitoring and control systems, graphical user interfaces, and building management systems. In addition, the company develops, invests in, and markets green technologies, including PV farms and recycling operations in commercial, residential, and industrial sectors; and provides facilities management services comprising the care of offices, commercial, or institutional buildings, such as hospitals, office complexes, arenas, schools, and residential developments. Further, it offers manufacturing services, such as precision prefabrication and engineering services; design and build services; and green and ICT services for residential and hotel projects, as well as design, procurement, installation, testing, and commissioning services for rail and airport construction sectors. The company serves global media, financial services, and manufacturing organizations; contractors in the construction industry; house builders; and a range of public and private sector clients. TClarke plc was founded in 1889 is headquartered in London, the United Kingdom.

Clarke(T.) revenue growth decelerated to 14.9% in FY2016 vs. 16.6% a year earliner

Revenue and profitability

Appendix 1: Peers in Construction & Materials

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