Harvey Nash Group EBITDA dropped on 29.5% and EBITDA Margin decreased slightly on 0.51 pp from 1.3% to 0.84%
27 Apr 2018 • About Harvey Nash Group (
$HVN) • By InTwits
Harvey Nash Group reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 0.8% in FY2018 vs. 1.3% in FY2017 vs. 1.3% in FY2014
- Harvey Nash Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.2%.
- The company has business model with low profitability: ROIC is 7.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Harvey Nash Group's Revenue surged on 13.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 23.8 pp from -6.7% to 17.0% in FY2018. During the last 5 years EBITDA Margin topped in FY2016 at 1.7% and was declining since that time.
Gross Margin decreased slightly on 1.2 pp from 12.5% to 11.3% in FY2018. SG&A as a % of Revenue decreased slightly on 1.2 pp from 11.3% to 10.0% in FY2018.
Net Income margin showed almost no change in FY2018.
Investments (CAPEX, working capital and M&A)
Harvey Nash Group's CAPEX/Revenue was 0.094% in FY2018. The company's CAPEX/Revenue showed almost no change from FY2015 to FY2018. It's average CAPEX/Revenue for the last three years was 0.17%. During the last 5 years CAPEX as a % of Revenue topped in FY2016 at 0.29% and was declining since that time.
Return on investment
The company operates at low ROIC (7.9%) and ROE (5.7%). ROIC decreased on 4.6 pp from 12.6% to 7.9% in FY2018. ROE decreased on 4.6 pp from 10.3% to 5.7% in FY2018. During the last 5 years ROIC topped in FY2016 at 13.2% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is 2.3x. Net Debt / EBITDA surged on 1.4x from -0.5x to 0.9x in FY2018. Debt surged on 17.5% while cash dropped on 48.2%.
Harvey Nash Group has short term refinancing risk: cash is only 60.8% of short term debt.
Financial and operational results
FY ended 31 Jan 2018
Harvey Nash Group ($HVN) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 697.3 | 677.9 | 676.5 | 784.3 | 889.3 | 13.4% |
| Gross Profit | 88.6 | 84.9 | 90.3 | 97.9 | 100.1 | 2.2% |
| SG&A | 78.9 | 75.1 | 80.1 | 88.6 | 89.3 | 0.9% |
| EBITDA | 9.1 | 10.7 | 11.5 | 10.6 | 7.4 | -29.5% |
| Net Income | 3.8 | 5.3 | -7.6 | 6.0 | 3.5 | -41.6% |
Balance Sheet
|
|---|
| Cash | 15.9 | 19.0 | 18.5 | 20.3 | 10.5 | -48.2% |
| Short Term Debt | 12.1 | 16.9 | 18.3 | 14.7 | 17.3 | 17.5% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 1.7 | 1.8 | 2.0 | 1.0 | 0.8 | -20.5% |
Ratios
|
|---|
| Revenue growth | 17.3% | -2.8% | -0.2% | 15.9% | 13.4% | |
| EBITDA growth | -17.1% | 17.7% | 6.8% | -7.9% | -29.5% | |
|
|---|
| Gross Margin | 12.7% | 12.5% | 13.3% | 12.5% | 11.3% | -1.2% |
| EBITDA Margin | 1.3% | 1.6% | 1.7% | 1.3% | 0.8% | -0.5% |
| SG&A, % of revenue | 11.3% | 11.1% | 11.8% | 11.3% | 10.0% | -1.2% |
| Net Income Margin | 0.6% | 0.8% | -1.1% | 0.8% | 0.4% | -0.4% |
| CAPEX, % of revenue | 0.2% | 0.3% | 0.3% | 0.1% | 0.1% | -0.0% |
|
|---|
| ROIC | 9.4% | 11.7% | 13.2% | 12.6% | 7.9% | -4.6% |
| ROE | 5.8% | 8.1% | -12.8% | 10.3% | 5.7% | -4.6% |
| Net Debt/EBITDA | -0.4x | -0.2x | -0.0x | -0.5x | 0.9x | 1.4x |
Peers in Support Services
Below we provide Harvey Nash Group 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Mortice Ltd ($MORT) | 11.0% | 18.9% | 51.1% | 36.1% | |
| Rws Hldgs ($RWS) | 20.9% | 1.8% | 28.1% | 34.5% | |
| Empresaria Group ($EMR) | -3.3% | -0.3% | 44.4% | 32.1% | |
| Norish ($NSH) | 3.7% | 16.4% | 16.7% | 31.4% | |
| Capital Drilling Ltd ($CAPD) | -15.0% | -20.4% | 18.7% | 28.0% | |
| |
|---|
| Median (45 companies) | 5.9% | 7.2% | 3.5% | 6.9% | 8.1% |
|---|
| Harvey Nash Group ($HVN) | | -2.8% | -0.2% | 15.9% | 13.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inspired Energy ($INSE) | 78.7% | 76.2% | 80.5% | 83.1% | |
| Ienergizer Ltd ($IBPO) | 76.8% | 72.7% | 71.3% | 71.2% | |
| Spectra Systems Corp ($SPSY) | 51.4% | 47.6% | 68.3% | 71.1% | |
| Vianet Group ($VNET) | 58.8% | 69.2% | 70.1% | 69.7% | |
| Grafenia ($GRA) | 56.1% | 70.8% | 66.3% | 63.0% | |
| |
|---|
| Median (39 companies) | 29.2% | 28.4% | 27.3% | 28.7% | 17.6% |
|---|
| Harvey Nash Group ($HVN) | 12.7% | 12.5% | 13.3% | 12.5% | 11.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Northgate ($67GX) | 40.6% | 39.4% | 38.3% | 35.9% | 35.4% |
| Spectra Systems Corp ($SPSY) | 12.3% | 6.0% | 19.7% | 34.0% | |
| Inspired Energy ($INSE) | 1.5% | 35.4% | 34.4% | 32.4% | |
| Vp ($VP.) | 24.2% | 26.2% | 28.4% | 28.6% | |
| Rws Hldgs ($RWS) | 22.8% | 23.1% | 26.4% | 25.5% | |
| |
|---|
| Median (45 companies) | 6.8% | 7.6% | 5.7% | 6.5% | 7.6% |
|---|
| Harvey Nash Group ($HVN) | 1.3% | 1.6% | 1.7% | 1.3% | 0.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vp ($VP.) | 21.6% | 25.7% | 24.1% | 26.0% | |
| Augean ($AUG) | 12.3% | 12.3% | 11.0% | 10.0% | |
| Petards Group ($PEG) | 0.5% | 0.9% | 1.7% | 10.0% | |
| Capital Drilling Ltd ($CAPD) | 13.9% | 10.1% | 13.7% | 9.0% | |
| Billing Services Group ($BILL) | 2.1% | 4.1% | 3.0% | 4.5% | |
| |
|---|
| Median (45 companies) | 1.0% | 1.0% | 1.1% | 0.9% | 1.3% |
|---|
| Harvey Nash Group ($HVN) | 0.2% | 0.3% | 0.3% | 0.1% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Sthree ($STHR) | 38.1% | 50.2% | 46.2% | 43.4% | |
| Mortice Ltd ($MORT) | 19.6% | 21.9% | 14.5% | 23.2% | |
| Petards Group ($PEG) | 24.7% | 23.9% | 22.7% | 20.3% | |
| Rws Hldgs ($RWS) | 24.5% | 23.3% | 23.5% | 20.2% | |
| Latham(James) ($LTHM) | 17.5% | 16.8% | 19.2% | 19.3% | 17.4% |
| |
|---|
| Median (46 companies) | 11.1% | 10.4% | 7.8% | 8.1% | 6.9% |
|---|
| Harvey Nash Group ($HVN) | 9.4% | 11.7% | 13.2% | 12.6% | 7.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Nakama Group ($NAK) | 5.2x | 1.4x | 3.1x | 48.5x | |
| 21St Century Technology ($C21) | -0.8x | -0.2x | | 11.2x | |
| Ibex Global Solutions ($IBEX) | 2.7x | 1.0x | 1.7x | 4.5x | |
| Menzies(John) ($68HN) | 2.0x | 2.4x | 1.2x | 3.0x | |
| Mitsubishi Corp ($MBC) | 14.3x | 12.5x | 53.4x | 2.9x | |
| |
|---|
| Median (41 companies) | 0.3x | 0.2x | 0.3x | 0.5x | 1.8x |
|---|
| Harvey Nash Group ($HVN) | -0.4x | -0.2x | -0.0x | -0.5x | 0.9x |
