Elektron Technology reports 1,900% Net Income growth in 2018 and 12.0 pp EBITDA Margin growth from 5.8% to 17.8%
03 May 2018 • About Elektron Technology (
$EKT) • By InTwits
Elektron Technology reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Elektron Technology is a company in decline: FY2018 revenue growth was -8.9%, 5 years revenue CAGR was -11.8%
- EBITDA Margin is quite volatile: 17.8% in FY2018, 5.8% in FY2017, 8.1% in FY2016, 7.2% in FY2015, 4.5% in FY2014
- Elektron Technology has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 4.1%
- CAPEX is quite volatile: £0m in FY2018, £0m in FY2017, £1m in FY2016, £1m in FY2015, £1m in FY2014
- The company has highly profitable business model: ROIC is 18.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 8.9%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 12.0 pp from 5.8% to 17.8% in FY2018.
Gross Margin surged on 10.5 pp from 39.1% to 49.7% in FY2018. Gross Margin stuck to a growing trend at 3.3 pp per annum in the last 5 years. SG&A as a % of Revenue showed almost no change in FY2018.
Net Income margin increased on 6.3 pp from -0.31% to 6.0% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 1.3%. CAPEX/Revenue showed almost no change from FY2015 to FY2018. Average CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at good ROIC (18.8%) and ROE (14.3%). ROIC surged on 27.8 pp from -9.0% to 18.8% in FY2018. ROE jumped on 15.2 pp from -0.84% to 14.3% in FY2018.
Leverage (Debt)
The company paid down all the debt in FY2018. Cash surged on 108%.
Financial and operational results
FY ended 31 Jan 2018
Elektron Technology ($EKT) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 46.300 | 44.400 | 43.300 | 32.700 | 29.800 | -8.9% |
| Gross Profit | 16.100 | 15.800 | 16.100 | 12.800 | 14.800 | 15.6% |
| SG&A | | | 14.900 | 13.600 | 12.300 | -9.6% |
| EBITDA | 2.100 | 3.200 | 3.500 | 1.900 | 5.300 | 178.9% |
| Net Income | -6.700 | 0.200 | 0.600 | -0.100 | 1.800 | |
Balance Sheet
|
|---|
| Cash | 0.800 | 0.600 | 0.600 | 2.500 | 5.200 | 108.0% |
| Short Term Debt | 5.200 | 2.300 | 2.200 | 1.500 | 0.000 | -100.0% |
| Long Term Debt | 3.600 | 1.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.700 | 0.500 | 0.800 | 0.300 | 0.400 | 33.3% |
Ratios
|
|---|
| Revenue growth | -16.9% | -4.1% | -2.5% | -24.5% | -8.9% | |
| EBITDA growth | -30.0% | 52.4% | 9.4% | -45.7% | 178.9% | |
|
|---|
| Gross Margin | 34.8% | 35.6% | 37.2% | 39.1% | 49.7% | 10.5% |
| EBITDA Margin | 4.5% | 7.2% | 8.1% | 5.8% | 17.8% | 12.0% |
| SG&A, % of revenue | | | 34.4% | 41.6% | 41.3% | -0.3% |
| Net Income Margin | -14.5% | 0.5% | 1.4% | -0.3% | 6.0% | 6.3% |
| CAPEX, % of revenue | 1.5% | 1.1% | 1.8% | 0.9% | 1.3% | 0.4% |
|
|---|
| ROIC | 3.3% | 9.9% | 7.0% | -9.0% | 18.8% | 27.8% |
| ROE | -61.8% | 2.2% | 5.3% | -0.8% | 14.3% | 15.2% |
| Net Debt/EBITDA | 3.8x | 0.8x | 0.5x | -0.5x | -1.0x | -0.5x |
Peers in Electronic & Electrical Equipment
Below you can find Elektron Technology benchmarking vs. other companies in Electronic & Electrical Equipment 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 |
|---|
| Image Scan Hldgs ($IGE) | -13.5% | -22.2% | 94.1% | 51.9% | |
| Flowgroup ($FLOW) | 141.9% | 21.1% | 144.6% | 39.8% | |
| Gooch & Housego ($GHH) | 10.8% | 12.3% | 9.3% | 30.2% | |
| Walsin Lihwa Corp ($WALS) | | -8.4% | -4.0% | 17.0% | |
| Stadium Group ($SDM) | -1.1% | 29.0% | -1.5% | 15.2% | |
| |
|---|
| Median (16 companies) | -2.8% | -1.1% | 0.9% | 8.9% | 19.7% |
|---|
| Elektron Technology ($EKT) | | -4.1% | -2.5% | -24.5% | -8.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Prophotonix Ltd ($PPIR) | | | 45.4% | 44.6% | |
| Gooch & Housego ($GHH) | 40.5% | 39.4% | 37.5% | 41.1% | |
| Zytronic ($ZYT) | 36.6% | 41.9% | 42.8% | 41.1% | |
| Image Scan Hldgs ($IGE) | 30.7% | | 42.3% | 38.3% | |
| Maruwa Co Ltd ($MAW) | 32.8% | 30.0% | 35.9% | 36.9% | 43.1% |
| |
|---|
| Median (14 companies) | 29.2% | 24.1% | 30.5% | 29.1% | 43.1% |
|---|
| Elektron Technology ($EKT) | 34.8% | 35.6% | 37.2% | 39.1% | 49.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Zytronic ($ZYT) | 22.9% | 27.8% | 25.6% | 28.8% | |
| Maruwa Co Ltd ($MAW) | 17.8% | 14.7% | 19.6% | 21.4% | 28.7% |
| Morgan Advanced Materials ($BA29) | 9.8% | 12.8% | 14.6% | 19.2% | |
| Gooch & Housego ($GHH) | 13.4% | 19.8% | 17.3% | 17.3% | |
| Dewhurst ($DWHA) | 13.7% | 14.7% | 13.4% | 13.6% | |
| |
|---|
| Median (15 companies) | 5.7% | 7.1% | 8.9% | 10.4% | 28.7% |
|---|
| Elektron Technology ($EKT) | 4.5% | 7.2% | 8.1% | 5.8% | 17.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lpa Group ($LPA) | 14.8% | 1.8% | 6.0% | 7.3% | |
| Maruwa Co Ltd ($MAW) | 7.6% | 6.5% | 4.4% | 6.1% | 6.9% |
| Gooch & Housego ($GHH) | 2.7% | 3.9% | 11.3% | 5.2% | |
| Wintek Corp ($WTKA) | 2.4% | 0.6% | 1.6% | 4.2% | |
| Solid State ($SSP) | 1.3% | 1.4% | 2.0% | 3.7% | |
| |
|---|
| Median (16 companies) | 1.3% | 1.6% | 1.7% | 2.0% | 6.9% |
|---|
| Elektron Technology ($EKT) | 1.5% | 1.1% | 1.8% | 0.9% | 1.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Image Scan Hldgs ($IGE) | -45.6% | | 16.4% | 39.8% | |
| Morgan Advanced Materials ($BA29) | 10.9% | 18.4% | 21.9% | 31.6% | |
| Prophotonix Ltd ($PPIR) | | | | 25.8% | |
| Dewhurst ($DWHA) | 24.5% | 27.3% | 24.6% | 24.1% | |
| Zytronic ($ZYT) | 17.0% | 22.7% | 18.1% | 20.9% | |
| |
|---|
| Median (16 companies) | 6.8% | 5.7% | 10.3% | 15.3% | 19.2% |
|---|
| Elektron Technology ($EKT) | 3.3% | 9.9% | 7.0% | -9.0% | 18.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Apc Technology Group ($APC) | 0.5x | | | 5.2x | |
| Walsin Lihwa Corp ($WALS) | 3.9x | 4.6x | 2.7x | 1.9x | |
| Stadium Group ($SDM) | 1.2x | 0.3x | 0.7x | 1.4x | |
| Lpa Group ($LPA) | 1.5x | 3.8x | 1.3x | 1.1x | |
| Morgan Advanced Materials ($BA29) | 2.3x | 1.8x | 1.7x | 0.9x | |
| |
|---|
| Median (13 companies) | 0.5x | -0.2x | 0.4x | -0.5x | -2.0x |
|---|
| Elektron Technology ($EKT) | 3.8x | 0.8x | 0.5x | -0.5x | -1.0x |
