Chamberlin Debt surged on 30.0% and Revenue jumped on 17.3%
05 Jun 2018 • About Chamberlin (
$CMH) • By InTwits
Chamberlin reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 4.1% in FY2018, 5.0% in FY2017, 4.2% in FY2016, 4.2% in FY2015, -1.2% in FY2014
- Chamberlin has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.9%. At the same time it's a lot of higher than industry average of 4.3%.
- CAPEX is quite volatile: £3m in FY2018, £4m in FY2017, £1m in FY2016, £1m in FY2015, £1m in FY2014
- The company has potentially unprofitable business model: ROIC is 0.3%
- It operates with high leverage: Net Debt/EBITDA is 5.8x while industry average is -8.1x
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 jumped on 17.3%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.92 pp from 5.0% to 4.1% in FY2018.
Gross Margin decreased on 3.4 pp from 21.6% to 18.2% in FY2018. During the last 5 years Gross Margin topped in FY2017 at 21.6%. SG&A as a % of Revenue decreased on 2.0 pp from 19.3% to 17.3% in FY2018.
Net Income margin increased slightly on 0.87 pp from -3.0% to -2.2% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 Chamberlin had CAPEX/Revenue of 7.9%. The company showed CAPEX/Revenue growth of 4.8 pp from 3.1% in FY2015 to 7.9% in FY2018. It's average level of CAPEX/Revenue for the last three years was 7.9%. To secure its fast growth Chamberlin made large investments to CAPEX (193% of EBITDA). During FY2014-FY2018 CAPEX as a % of Revenue topped in FY2017 at 11.6%.
Return on investment
The company operates at low but positive ROIC (0.3%) and negative ROE (-23.1%). ROIC decreased on 4.3 pp from 4.7% to 0.32% in FY2018. ROE decreased slightly on 1.4 pp from -21.7% to -23.1% in FY2018. During the last 5 years ROE topped in FY2015 at 0.25% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.8x and Debt / EBITDA is 5.8x. Net Debt / EBITDA jumped on 1.5x from 4.3x to 5.8x in FY2018. Debt surged on 30.0% while cash didn't change in FY2018.
Chamberlin has short term refinancing risk: cash is only 0.0% of short term debt.
Financial and operational results
FY ended 31 Mar 2018
Chamberlin ($CMH) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 38.562 | 40.835 | 34.988 | 32.119 | 37.670 | 17.3% |
| Gross Profit | 6.149 | 8.223 | 7.331 | 6.946 | 6.868 | -1.1% |
| SG&A | 6.905 | 7.236 | 6.501 | 6.203 | 6.512 | 5.0% |
| EBITDA | -0.478 | 1.718 | 1.465 | 1.600 | 1.531 | -4.3% |
| Net Income | -1.604 | 0.016 | -0.261 | -0.973 | -0.813 | |
Balance Sheet
|
|---|
| Cash | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Short Term Debt | 3.041 | 3.392 | 2.941 | 5.520 | 6.989 | 26.6% |
| Long Term Debt | 0.600 | 0.400 | 0.251 | 1.308 | 1.889 | 44.4% |
Cash flow
|
|---|
| Capex | 1.018 | 1.261 | 1.468 | 3.732 | 2.958 | -20.7% |
Ratios
|
|---|
| Revenue growth | -8.6% | 5.9% | -14.3% | -8.2% | 17.3% | |
| EBITDA growth | -120.7% | -459.4% | -14.7% | 9.2% | -4.3% | |
|
|---|
| Gross Margin | 15.9% | 20.1% | 21.0% | 21.6% | 18.2% | -3.4% |
| EBITDA Margin | -1.2% | 4.2% | 4.2% | 5.0% | 4.1% | -0.9% |
| SG&A, % of revenue | 17.9% | 17.7% | 18.6% | 19.3% | 17.3% | -2.0% |
| Net Income Margin | -4.2% | 0.0% | -0.7% | -3.0% | -2.2% | 0.9% |
| CAPEX, % of revenue | 2.6% | 3.1% | 4.2% | 11.6% | 7.9% | -3.8% |
|
|---|
| ROIC | -21.5% | 4.7% | 1.6% | 4.7% | 0.3% | -4.3% |
| ROE | -21.1% | 0.2% | -4.7% | -21.7% | -23.1% | -1.4% |
| Net Debt/EBITDA | | 2.2x | 2.2x | 4.3x | 5.8x | 1.5x |
Peers in Industrial Engineering
Below we provide Chamberlin benchmarking against other companies in Industrial Engineering 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 |
|---|
| Flowtech Fluidpower ($FLO) | 17.7% | 18.7% | 19.9% | 45.6% | |
| Corac Group ($CRA) | 12.2% | -5.7% | 3.8% | 38.8% | |
| 600 Group ($SIXH) | -0.2% | 5.0% | 3.4% | 29.9% | |
| Molins ($MLIN) | -16.9% | -0.5% | -52.3% | 28.7% | |
| Mincon Group ($MCON) | 4.2% | 28.8% | 8.4% | 27.8% | |
| |
|---|
| Median (20 companies) | 2.1% | 0.3% | 4.0% | 8.4% | 4.5% |
|---|
| Chamberlin ($CMH) | | 5.9% | -14.3% | -8.2% | 17.3% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 54.0% | 55.8% | 56.8% | 56.9% | |
| Rotork ($76ID) | 48.0% | 45.7% | 44.3% | 44.2% | |
| Tricorn Group ($TCN) | 36.1% | 36.0% | 40.3% | 40.6% | |
| Amiad Water Systems Ltd ($AFS) | 38.9% | 40.5% | 39.3% | 39.5% | |
| Mincon Group ($MCON) | 43.2% | 40.2% | 40.1% | 36.5% | |
| |
|---|
| Median (17 companies) | 33.2% | 34.2% | 32.0% | 33.9% | 31.6% |
|---|
| Chamberlin ($CMH) | 15.9% | 20.1% | 21.0% | 21.6% | 18.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 27.4% | 28.2% | 30.1% | 32.2% | |
| Rotork ($76ID) | 28.0% | 25.0% | 22.8% | 19.9% | |
| Ab Dynamics ($ABDP) | 20.1% | 24.0% | 22.7% | 19.0% | |
| Mincon Group ($MCON) | 22.7% | 17.6% | 16.4% | 14.3% | |
| Northbridge Industrial Services ($NBI) | 32.4% | 32.5% | 9.1% | 14.1% | |
| |
|---|
| Median (19 companies) | 7.5% | 8.2% | 8.0% | 10.0% | 8.8% |
|---|
| Chamberlin ($CMH) | -1.2% | 4.2% | 4.2% | 5.0% | 4.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ab Dynamics ($ABDP) | 2.5% | 4.2% | 7.9% | 32.7% | |
| Ms International ($MSI) | 2.0% | 1.8% | 4.7% | 7.7% | |
| Mincon Group ($MCON) | 4.3% | 2.5% | 6.9% | 5.8% | |
| Renold ($RNO) | 3.3% | 2.1% | 4.8% | 4.6% | 4.5% |
| Hms Hydraulic Mach & Sys Grp ($HMSG) | 3.6% | 3.7% | 3.8% | 4.3% | |
| |
|---|
| Median (19 companies) | 2.4% | 2.2% | 3.4% | 2.5% | 4.4% |
|---|
| Chamberlin ($CMH) | 2.6% | 3.1% | 4.2% | 11.6% | 7.9% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 51.7% | 54.3% | 51.7% | 55.2% | |
| Renold ($RNO) | -2.5% | 41.3% | 39.1% | 44.7% | 21.3% |
| Ab Dynamics ($ABDP) | 28.4% | 31.4% | 28.0% | 19.3% | |
| Braime(T.F.& J.H.)(Hldgs) ($BMTO) | 11.9% | 7.5% | 10.9% | 17.2% | |
| Rotork ($76ID) | 38.1% | 21.9% | 17.0% | 15.7% | |
| |
|---|
| Median (20 companies) | 11.0% | 9.5% | 7.1% | 7.6% | 16.7% |
|---|
| Chamberlin ($CMH) | -21.5% | 4.7% | 1.6% | 4.7% | 0.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Tricorn Group ($TCN) | 5.8x | 4.0x | 7.2x | 5.1x | |
| Pressure Technologies ($PRES) | -0.7x | 1.3x | 2.3x | 4.8x | |
| 600 Group ($SIXH) | 2.2x | 3.1x | | 4.0x | |
| Northbridge Industrial Services ($NBI) | 1.2x | 1.5x | 4.9x | 2.7x | |
| Flowtech Fluidpower ($FLO) | 1.0x | 1.3x | 1.8x | 1.9x | |
| |
|---|
| Median (18 companies) | 0.3x | 0.7x | 1.1x | 0.3x | 0.6x |
|---|
| Chamberlin ($CMH) | | 2.2x | 2.2x | 4.3x | 5.8x |
