Record reports 9.0% EBITDA decline in 2018 and 3.1 pp EBITDA Margin decline from 35.7% to 32.6%
15 Jun 2018 • About Record (
$REC) • By InTwits
Record reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Record has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's in pair with industry average of 4.1%
- CAPEX is quite volatile: £0m in FY2018, £1m in FY2017, £0m in FY2016, £0m in FY2015, £0m in FY2014
- The company has highly profitable business model: ROIC is 22.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue showed almost no change in FY2018. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.1 pp from 35.7% to 32.6% in FY2018.
Gross Margin showed almost no change in FY2018. Gross Margin followed a declining trend at -0.23 pp per annum in the last 5 years. SG&A as a % of Revenue increased on 5.9 pp from 63.0% to 68.9% in FY2018.
Net Income margin decreased slightly on 0.61 pp from 26.4% to 25.8% in FY2018. Net Income margin declined at -0.38 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2018 Record had CAPEX/Revenue of 0.99%. CAPEX/Revenue showed almost no change from FY2015 to FY2018. It's average level of CAPEX/Revenue for the last three years was 1.6%.
Return on investment
The company operates at high and attractive ROIC (22.0%) while ROE is a bit lower (19.4%). ROIC increased slightly on 1.3 pp from 20.7% to 22.0% in FY2018. ROE increased slightly on 1.5 pp from 17.9% to 19.4% in FY2018.
Leverage (Debt)
The company has no debt. Cash dropped on 34.6%.
Financial and operational results
FY ended 31 Mar 2018
Record ($REC) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 19.922 | 21.057 | 21.134 | 23.928 | 23.834 | -0.4% |
| Gross Profit | 19.836 | 20.909 | 20.913 | 23.630 | 23.523 | -0.5% |
| SG&A | 13.412 | 13.373 | 14.123 | 15.067 | 16.424 | 9.0% |
| EBITDA | 6.885 | 7.242 | 7.128 | 8.541 | 7.771 | -9.0% |
| Net Income | 5.407 | 5.782 | 5.541 | 6.316 | 6.146 | -2.7% |
Balance Sheet
|
|---|
| Cash | 11.503 | 12.010 | 21.720 | 19.120 | 12.498 | -34.6% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.025 | 0.128 | 0.029 | 0.899 | 0.236 | -73.7% |
Ratios
|
|---|
| Revenue growth | 7.4% | 5.7% | 0.4% | 13.2% | -0.4% | |
| EBITDA growth | 10.1% | 5.2% | -1.6% | 19.8% | -9.0% | |
|
|---|
| Gross Margin | 99.6% | 99.3% | 99.0% | 98.8% | 98.7% | -0.1% |
| EBITDA Margin | 34.6% | 34.4% | 33.7% | 35.7% | 32.6% | -3.1% |
| SG&A, % of revenue | 67.3% | 63.5% | 66.8% | 63.0% | 68.9% | 5.9% |
| Net Income Margin | 27.1% | 27.5% | 26.2% | 26.4% | 25.8% | -0.6% |
| CAPEX, % of revenue | 0.1% | 0.6% | 0.1% | 3.8% | 1.0% | -2.8% |
|
|---|
| ROIC | 20.2% | 20.2% | 18.5% | 20.7% | 22.0% | 1.3% |
| ROE | 18.7% | 18.9% | 16.9% | 17.9% | 19.4% | 1.5% |
| Net Debt/EBITDA | -1.7x | -1.7x | -3.0x | -2.2x | -1.6x | 0.6x |
Peers in Financial Services
Below you can find Record 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 ($AFHP) | 39.3% | 39.5% | 15.0% | 39.4% | |
| |
|---|
| Median (33 companies) | 5.4% | 2.7% | 6.8% | 12.3% | 18.8% |
|---|
| Record ($REC) | | 5.7% | 0.4% | 13.2% | -0.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| London Capital Group Hldgs ($LCG) | 73.6% | 67.9% | 84.2% | 86.4% | |
| Schroders ($SDRC) | 77.7% | 78.3% | 79.9% | 80.0% | |
| First Property Group ($FPO) | 67.9% | 83.0% | 80.6% | 78.6% | 76.3% |
| Walker Crips Group ($WCW) | 68.2% | 66.7% | 67.7% | 69.8% | |
| S & U ($46IE) | 67.6% | 65.3% | 63.3% | 58.6% | 53.8% |
| |
|---|
| Median (13 companies) | 43.8% | 52.3% | 55.4% | 49.4% | 53.8% |
|---|
| Record ($REC) | 99.6% | 99.3% | 99.0% | 98.8% | 98.7% |
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 ($PLUS) | 63.5% | 48.2% | 46.0% | 59.3% | |
| First Property Group ($FPO) | 40.2% | 42.9% | 52.2% | 57.4% | 52.9% |
| Livermore Investments Group Ltd ($LIV) | 78.8% | 83.5% | 71.9% | 56.8% | |
| |
|---|
| Median (30 companies) | 14.4% | 16.9% | 17.2% | 20.9% | 41.7% |
|---|
| Record ($REC) | 34.6% | 34.4% | 33.7% | 35.7% | 32.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Daishin Securities Co ($DSS) | 15.0% | 6.5% | 15.1% | 11.2% | |
| First Property Group ($FPO) | 0.3% | 0.1% | 6.4% | 8.5% | 9.4% |
| Schroders ($SDRC) | 1.5% | 1.9% | 3.0% | 6.9% | |
| Leeds Group ($LDSG) | 0.6% | 0.9% | 11.5% | 5.6% | |
| Guinness Peat Group ($GPG) | 2.9% | 3.0% | 2.8% | 3.3% | |
| |
|---|
| Median (30 companies) | 0.8% | 1.0% | 1.0% | 1.0% | 1.0% |
|---|
| Record ($REC) | 0.1% | 0.6% | 0.1% | 3.8% | 1.0% |
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 ($LGT) | 8.6% | 14.6% | 25.7% | 26.6% | |
| |
|---|
| Median (34 companies) | 7.6% | 7.6% | 7.5% | 8.5% | 8.0% |
|---|
| Record ($REC) | 20.2% | 20.2% | 18.5% | 20.7% | 22.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Daishin Securities Co ($DSS) | 10.7x | 8.0x | 13.4x | 12.7x | |
| First Property Group ($FPO) | 5.6x | 12.3x | 9.4x | 7.6x | 7.7x |
| 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 | |
| |
|---|
| Median (26 companies) | -2.3x | -1.1x | -1.0x | -1.3x | -0.6x |
|---|
| Record ($REC) | -1.7x | -1.7x | -3.0x | -2.2x | -1.6x |
