First Property Group reports 18.8% CAPEX growth in 2018 and 7.6% Revenue growth
08 Jun 2018 • About First Property Group (
$FPO) • By InTwits
First Property Group reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- First Property Group is a fast growth stock: FY2018 revenue growth was 7.6%, 5 year revenue CAGR was 19.1% at FY2018 ROIC 6.7%
- First Property Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 5.0%. At the same time it's a lot of higher than industry average of 1.7%.
- CAPEX is quite volatile: £2m in FY2018, £2m in FY2017, £1m in FY2016, £0m in FY2015, £0m in FY2014
- The company has potentially unprofitable business model: ROIC is 6.7%
- It operates with high leverage: Net Debt/EBITDA is 7.7x while industry average is -2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
First Property Group's Revenue increased on 7.6%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 28.2 pp from 18.6% to 46.8% in FY2018. EBITDA Margin stuck to a growing trend at 4.0 pp per annum in the last 5 years.
Gross Margin decreased on 2.3 pp from 78.6% to 76.3% in FY2018. During FY2014-FY2018 Gross Margin topped in FY2015 at 83.0% and was declining since that time.
Net Income margin decreased on 6.6 pp from 33.1% to 26.5% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 9.4% in FY2018. First Property Group's CAPEX/Revenue increased on 9.3 pp from 0.076% in FY2015 to 9.4% in FY2018. It's average level of CAPEX/Revenue for the last three years was 8.1%. CAPEX as a % of Revenue grew at 2.7 pp per annum in the last 5 years.
Return on investment
The company operates at good ROE (15.5%) while ROIC is low (6.7%). ROIC decreased slightly on 0.70 pp from 7.4% to 6.7% in FY2018. ROE decreased on 6.1 pp from 21.6% to 15.5% in FY2018.
Leverage (Debt)
Debt level is 7.7x Net Debt / EBITDA and 8.8x Debt / EBITDA. Net Debt / EBITDA increased on 0.1x from 7.6x to 7.7x in FY2018. Debt showed almost no change in FY2018 while cash decreased on 4.0%.
First Property Group has no short term refinancing risk: cash is higher than short term debt (184.1%).
Financial and operational results
FY ended 30 Nov -0001
First Property Group ($FPO) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 18.045 | 18.523 | 21.955 | 23.663 | 25.460 | 7.6% |
| Gross Profit | 12.245 | 15.367 | 17.700 | 18.598 | 19.430 | 4.5% |
| EBITDA | 7.257 | 7.950 | 11.462 | 13.574 | 13.473 | -0.7% |
| Net Income | 5.281 | 8.172 | 5.008 | 7.833 | 6.755 | -13.8% |
Balance Sheet
|
|---|
| Cash | 11.279 | 12.240 | 8.975 | 15.946 | 15.315 | -4.0% |
| Short Term Debt | 4.349 | 11.788 | 7.668 | 19.641 | 8.319 | -57.6% |
| Long Term Debt | 47.212 | 97.925 | 108.992 | 100.043 | 110.768 | 10.7% |
Cash flow
|
|---|
| Capex | 0.060 | 0.014 | 1.413 | 2.016 | 2.394 | 18.8% |
Ratios
|
|---|
| Revenue growth | 69.7% | 2.6% | 18.5% | 7.8% | 7.6% | |
| EBITDA growth | 81.7% | 9.5% | 44.2% | 18.4% | -0.7% | |
|
|---|
| Gross Margin | 67.9% | 83.0% | 80.6% | 78.6% | 76.3% | -2.3% |
| EBITDA Margin | 40.2% | 42.9% | 52.2% | 57.4% | 52.9% | -4.4% |
| Net Income Margin | 29.3% | 44.1% | 22.8% | 33.1% | 26.5% | -6.6% |
| CAPEX, % of revenue | 0.3% | 0.1% | 6.4% | 8.5% | 9.4% | 0.9% |
|
|---|
| ROIC | 12.2% | 7.0% | 6.7% | 7.4% | 6.7% | -0.7% |
| ROE | 25.9% | 31.1% | 16.1% | 21.6% | 15.5% | -6.1% |
| Net Debt/EBITDA | 5.6x | 12.3x | 9.4x | 7.6x | 7.7x | 0.1x |
Peers in Financial Services
Below you can find First Property Group benchmarking vs. other companies in Financial 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 |
|---|
| Starvest ($SVE) | | -52.9% | -4.8% | 346.6% | |
| Henderson Group ($HGG) | 13.8% | 13.0% | -1.0% | 90.7% | |
| Arden Partners ($ARDN) | -21.3% | -31.0% | 6.8% | 78.9% | |
| Impax Asset Management Group ($IPX) | 10.3% | -3.1% | 6.8% | 55.2% | |
| Afh Financial Group ($AFHP) | 39.3% | 39.5% | 15.0% | 39.4% | |
| |
|---|
| Median (33 companies) | 7.4% | 2.9% | 5.0% | 12.9% | 24.8% |
|---|
| First Property Group ($FPO) | | 2.6% | 18.5% | 7.8% | 7.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Record ($REC) | 99.6% | 99.3% | 99.0% | 98.8% | |
| London Capital Group Hldgs ($LCG) | 73.6% | 67.9% | 84.2% | 86.4% | |
| Schroders ($SDRC) | 77.7% | 78.3% | 79.9% | 80.0% | |
| Walker Crips Group ($WCW) | 68.2% | 66.7% | 67.7% | 69.8% | |
| S & U ($46IE) | 67.6% | 65.3% | 63.3% | 58.6% | 53.8% |
| |
|---|
| Median (13 companies) | 43.8% | 52.3% | 55.4% | 49.4% | 45.3% |
|---|
| First Property Group ($FPO) | 67.9% | 83.0% | 80.6% | 78.6% | 76.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Real Estate Credit Investments Pcc ($RECP) | 77.0% | 80.3% | 79.3% | 79.5% | 81.8% |
| Hargreaves Lansdown ($HL.) | 58.7% | 51.2% | 57.5% | 69.3% | |
| Plus500 Ltd ($PLUS) | 63.5% | 48.2% | 46.0% | 59.3% | |
| Livermore Investments Group Ltd ($LIV) | 78.8% | 83.5% | 71.9% | 56.8% | |
| Starvest ($SVE) | -136.5% | -2,683.1% | 63.4% | 56.4% | |
| |
|---|
| Median (30 companies) | 14.4% | 16.9% | 17.2% | 20.9% | 29.5% |
|---|
| First Property Group ($FPO) | 40.2% | 42.9% | 52.2% | 57.4% | 52.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Daishin Securities Co ($DSS) | 15.0% | 6.5% | 15.1% | 11.2% | |
| Schroders ($SDRC) | 1.5% | 1.9% | 3.0% | 6.9% | |
| Leeds Group ($LDSG) | 0.6% | 0.9% | 11.5% | 5.6% | |
| Record ($REC) | 0.1% | 0.6% | 0.1% | 3.8% | |
| Guinness Peat Group ($GPG) | 2.9% | 3.0% | 2.8% | 3.3% | |
| |
|---|
| Median (30 companies) | 0.8% | 1.0% | 0.8% | 1.0% | 0.6% |
|---|
| First Property Group ($FPO) | 0.3% | 0.1% | 6.4% | 8.5% | 9.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Plus500 Ltd ($PLUS) | 164.3% | 116.5% | 118.9% | 143.2% | |
| Fulcrum Utility Services Ld ($FCRM) | | | 347.2% | 103.4% | 29.9% |
| Hargreaves Lansdown ($HL.) | 101.0% | 87.5% | 90.0% | 93.3% | |
| Guinness Peat Group ($GPG) | 10.0% | 13.7% | 23.8% | 28.8% | |
| Lighthouse Group ($LGT) | 8.6% | 14.6% | 25.7% | 26.6% | |
| |
|---|
| Median (34 companies) | 7.6% | 7.8% | 8.1% | 9.9% | 11.4% |
|---|
| First Property Group ($FPO) | 12.2% | 7.0% | 6.7% | 7.4% | 6.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Daishin Securities Co ($DSS) | 10.7x | 8.0x | 13.4x | 12.7x | |
| Leeds Group ($LDSG) | -0.5x | -0.3x | 1.4x | 2.6x | |
| S & U ($46IE) | 1.7x | 3.1x | 0.5x | 1.8x | 3.2x |
| Guinness Peat Group ($GPG) | -2.1x | -1.6x | -0.4x | 1.2x | |
| Schroders ($SDRC) | -0.7x | 0.1x | 0.8x | 1.1x | |
| |
|---|
| Median (26 companies) | -2.3x | -1.2x | -1.4x | -1.6x | -0.9x |
|---|
| First Property Group ($FPO) | 5.6x | 12.3x | 9.4x | 7.6x | 7.7x |
