Development Securities reports 1,516% EBITDA growth in 2018 and 17.8 pp EBITDA Margin growth from 1.7% to 19.5%
26 Apr 2018 • About Development Securities (
$DSC) • By InTwits
Development Securities reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Development Securities is a growth stock: FY2018 revenue growth was 40.1%, 5 year revenue CAGR was 11.7% at FY2018 ROIC 6.1%
- EBITDA Margin is quite volatile: 19.5% in FY2018, 1.7% in FY2017, 12.3% in FY2016, 20.3% in FY2015, 22.2% in FY2014
- Development Securities has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.0%. At the same time it's a lot of higher than industry average of 2.4%.
- CAPEX is quite volatile: £2m in FY2018, £3m in FY2017, £7m in FY2016, £50m in FY2015, £11m in FY2014
- The company has potentially unprofitable business model: ROIC is 6.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Development Securities's Revenue surged on 40.1%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 17.8 pp from 1.7% to 19.5% in FY2018. During FY2014-FY2018 EBITDA Margin bottomed in FY2017 at 1.7%.
Net Income margin jumped on 25.6 pp from -2.4% to 23.2% in FY2018. During FY2014-FY2018 Net Income margin bottomed in FY2017 at -2.4%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.4% in FY2018. CAPEX/Revenue dropped on 23.2 pp from 24.6% in FY2015 to 1.4% in FY2018. It's average CAPEX/Revenue for the last three years was 2.3%. During the last 5 years CAPEX as a % of Revenue topped in FY2015 at 24.6% and was declining since that time.
Return on investment
The company operates at low ROIC (6.1%) and ROE (11.1%). ROIC increased on 5.9 pp from 0.20% to 6.1% in FY2018. ROE jumped on 11.9 pp from -0.84% to 11.1% in FY2018.
Financial and operational results
FY ended 30 Nov -0001
Development Securities ($DSC) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 79.3 | 203.7 | 242.3 | 123.9 | 173.7 | 40.1% |
| EBITDA | 17.6 | 41.3 | 29.8 | 2.1 | 33.8 | 1,516.0% |
| Net Income | 18.2 | 33.3 | 21.8 | -3.0 | 40.3 | |
Balance Sheet
|
|---|
| Cash | 40.1 | 59.9 | 43.8 | 23.8 | 40.6 | 70.8% |
| Long Term Debt | 221.1 | 205.0 | 213.3 | 172.1 | 171.2 | -0.5% |
Cash flow
|
|---|
| Capex | 10.7 | 50.1 | 7.1 | 3.1 | 2.4 | -20.3% |
Ratios
|
|---|
| Revenue growth | -20.4% | 156.8% | 18.9% | -48.8% | 40.1% | |
| EBITDA growth | 486.1% | 134.1% | -27.8% | -93.0% | 1,516.0% | |
|
|---|
| EBITDA Margin | 22.2% | 20.3% | 12.3% | 1.7% | 19.5% | 17.8% |
| Net Income Margin | 23.0% | 16.3% | 9.0% | -2.4% | 23.2% | 25.6% |
| CAPEX, % of revenue | 13.5% | 24.6% | 2.9% | 2.5% | 1.4% | -1.1% |
|
|---|
| ROIC | 3.2% | 7.4% | 5.1% | 0.2% | 6.1% | 5.9% |
| ROE | 5.8% | 10.0% | 6.2% | -0.8% | 11.1% | 11.9% |
| Net Debt/EBITDA | 10.3x | 3.5x | 5.7x | 70.8x | 3.9x | -67.0x |
Peers in Real Estate Investment & Services
Below you can find Development Securities benchmarking vs. other companies in Real Estate Investment & 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Plaza Centers Nv ($PLAZ) | 131.0% | -13.4% | -53.3% | 664.4% | |
| PIK Group OJSC ($PIK) | -2.1% | -16.5% | 17.5% | 191.5% | |
| Etalon Group Ltd ($ETLN) | 29.0% | -17.6% | 15.6% | 44.1% | |
| Formation Group ($FRM) | 35.8% | 199.3% | 23.8% | 25.8% | |
| HALS-Development JSC ($HALS) | 1,135.4% | -80.1% | 221.9% | 21.7% | |
| |
|---|
| Median (19 companies) | 9.7% | 5.5% | 7.6% | 10.7% | |
|---|
| Development Securities ($DSC) | | 156.8% | 18.9% | -48.8% | 40.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Arricano Real Estate ($ARO) | 96.5% | 96.1% | 96.4% | 96.5% | |
| Summit Germany Ltd ($SMTG) | | 92.3% | 92.2% | 92.2% | |
| Caledonian Trust ($CNN) | 43.2% | | 50.4% | 80.5% | |
| Panther Securities ($PNS) | 68.0% | 73.5% | 75.2% | 70.8% | |
| Songbird Estates ($SBD) | 70.7% | 72.5% | 72.8% | 68.6% | |
| |
|---|
| Median (14 companies) | 38.5% | 34.5% | 42.0% | 33.4% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Summit Germany Ltd ($SMTG) | 89.3% | 75.5% | 129.4% | 241.4% | |
| Arricano Real Estate ($ARO) | -138.3% | 12.7% | 190.4% | 238.1% | |
| Caledonian Trust ($CNN) | -59.1% | | 17.4% | 191.0% | |
| Safestore Hldgs ($SAFE) | 77.7% | 128.4% | 95.1% | 84.8% | |
| Raven Russia Ltd ($RUS) | 4.7% | -52.3% | 40.4% | 75.8% | |
| |
|---|
| Median (18 companies) | 16.7% | 26.7% | 32.8% | 33.6% | |
|---|
| Development Securities ($DSC) | 22.2% | 20.3% | 12.3% | 1.7% | 19.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Panther Securities ($PNS) | 26.0% | 15.7% | 3.7% | 68.6% | |
| Taliesin Property Fund Ltd ($TPFZ) | 45.2% | 43.7% | 37.2% | 40.5% | |
| Hagl JSC ($HAG) | 145.6% | 127.1% | 55.5% | 30.0% | |
| St.Modwen Properties ($SMP) | 36.7% | 55.8% | 31.3% | 19.3% | |
| Safestore Hldgs ($SAFE) | 6.3% | 7.2% | 24.5% | 16.7% | |
| |
|---|
| Median (19 companies) | 2.8% | 5.1% | 1.5% | 1.5% | |
|---|
| Development Securities ($DSC) | 13.5% | 24.6% | 2.9% | 2.5% | 1.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Arricano Real Estate ($ARO) | -12.3% | 1.7% | 34.2% | 43.8% | |
| Damac Real Estate Development Ltd ($DMC) | 31.3% | 41.5% | 24.5% | 16.0% | |
| Summit Germany Ltd ($SMTG) | 7.1% | 5.6% | 9.2% | 15.8% | |
| Taliesin Property Fund Ltd ($TPFZ) | 0.3% | -3.0% | 15.3% | 15.1% | |
| Etalon Group Ltd ($ETLN) | 14.3% | 10.2% | 6.6% | 12.6% | |
| |
|---|
| Median (19 companies) | 3.7% | 4.9% | 6.9% | 7.4% | |
|---|
| Development Securities ($DSC) | 3.2% | 7.4% | 5.1% | 0.2% | 6.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hagl JSC ($HAG) | 14.2x | 14.8x | 30.8x | 11.7x | |
| Songbird Estates ($SBD) | | 12.3x | 12.4x | 11.3x | |
| Farglory Land Development Co Ltd ($FLDS) | 5.7x | 4.4x | 4.8x | 8.9x | |
| Panther Securities ($PNS) | 11.8x | 9.7x | 9.4x | 8.5x | |
| HALS-Development JSC ($HALS) | 9.7x | | 6.6x | 7.8x | |
| |
|---|
| Median (16 companies) | 8.7x | 4.5x | 4.5x | 3.3x | |
|---|
| Development Securities ($DSC) | 10.3x | 3.5x | 5.7x | 70.8x | 3.9x |
