Plastics Capital revenue growth decelerated from 29.5% in FY2017 to 16.6% in FY2018
02 Jul 2018 • About Plastics Capital (
$PLA) • By InTwits
Plastics Capital reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Plastics Capital is a fast growth stock: FY2018 revenue growth was 16.6%, 5 year revenue CAGR was 19.6% at FY2018 ROIC 6.7%
- Plastics Capital has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.6%. At the same time it's in pair with industry average of 6.4%
- CAPEX is quite volatile: £4m in FY2018, £3m in FY2017, £2m in FY2016, £1m in FY2015, £2m in FY2014
- The company has potentially unprofitable business model: ROIC is 6.7%
- It operates with high leverage: Net Debt/EBITDA is 2.3x while industry average is 1.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Plastics Capital's Revenue surged on 16.6%. During FY2014-FY2018 Revenue growth topped in FY2017 at 29.5%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 12.0 pp from 5.8% to 17.8% in FY2018. EBITDA Margin followed a declining trend at -1.8 pp per annum in the last 5 years.
Gross Margin decreased slightly on 0.72 pp from 32.1% to 31.4% in FY2018. Gross Margin stuck to a declining trend at -1.2 pp per annum in FY2014-FY2018. SG&A as a % of Revenue showed almost no change in FY2018.
Net Income margin increased on 2.2 pp from 0.66% to 2.8% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 Plastics Capital had CAPEX/Revenue of 4.8%. CAPEX/Revenue increased on 2.4 pp from 2.5% in FY2015 to 4.8% in FY2018. Average CAPEX/Revenue for the last three years was 4.9%. To fuel its fast growth Plastics Capital invested a large share of EBITDA (56.1%) to CAPEX.
Return on investment
The company operates at low ROIC (6.7%) and ROE (7.6%). ROIC decreased slightly on 0.55 pp from 7.2% to 6.7% in FY2018. ROE increased on 5.9 pp from 1.6% to 7.6% in FY2018.
Leverage (Debt)
Debt level is 2.3x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 2.8x to 2.3x in FY2018. Debt decreased on 5.9% while cash decreased slightly on 1.2%. During the last 5 years Net Debt/EBITDA topped in FY2017 at 2.8x.
Plastics Capital has short term refinancing risk: cash is only 67.4% of short term debt.
Financial and operational results
FY ended 31 Mar 2018
Plastics Capital ($PLA) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 32.456 | 39.576 | 50.803 | 65.785 | 76.726 | 16.6% |
| Gross Profit | 11.693 | 13.980 | 16.871 | 21.129 | 24.088 | 14.0% |
| SG&A | 10.279 | 12.481 | 12.528 | 17.859 | 20.721 | 16.0% |
| EBITDA | 5.028 | 5.244 | 4.806 | 5.828 | 6.606 | 13.3% |
| Net Income | 0.879 | -0.250 | 1.222 | 0.432 | 2.170 | 402.3% |
Balance Sheet
|
|---|
| Cash | 3.134 | 4.437 | 5.488 | 4.914 | 4.854 | -1.2% |
| Short Term Debt | 3.928 | 5.143 | 8.067 | 6.199 | 7.206 | 16.2% |
| Long Term Debt | 6.376 | 10.694 | 8.273 | 15.037 | 12.771 | -15.1% |
Cash flow
|
|---|
| Capex | 1.876 | 0.977 | 2.275 | 3.499 | 3.705 | 5.9% |
Ratios
|
|---|
| Revenue growth | 3.3% | 21.9% | 28.4% | 29.5% | 16.6% | |
| EBITDA growth | 11.4% | 4.3% | -8.4% | 21.3% | 13.3% | |
|
|---|
| Gross Margin | 36.0% | 35.3% | 33.2% | 32.1% | 31.4% | -0.7% |
| EBITDA Margin | 15.5% | 13.3% | 9.5% | 8.9% | 8.6% | -0.2% |
| SG&A, % of revenue | 31.7% | 31.5% | 24.7% | 27.1% | 27.0% | -0.1% |
| Net Income Margin | 2.7% | -0.6% | 2.4% | 0.7% | 2.8% | 2.2% |
| CAPEX, % of revenue | 5.8% | 2.5% | 4.5% | 5.3% | 4.8% | -0.5% |
|
|---|
| ROIC | 8.6% | 6.8% | 4.3% | 7.2% | 6.7% | -0.5% |
| ROE | 4.0% | -1.0% | 4.6% | 1.6% | 7.6% | 5.9% |
| Net Debt/EBITDA | 1.4x | 2.2x | 2.3x | 2.8x | 2.3x | -0.5x |
Peers in Chemicals
Below we provide Plastics Capital benchmarking against other companies in Chemicals 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 |
|---|
| Hardide ($HDD) | 28.4% | -0.9% | -28.7% | 51.3% | |
| Lg Chem ($LGCD) | -2.4% | -10.5% | 2.2% | 24.4% | |
| Uralkali PJSC ($URKA) | | -12.2% | -27.1% | 21.2% | |
| Frutarom Industries ($FRUT) | 21.6% | 6.5% | 31.4% | 18.8% | |
| Victrex ($VCT) | 13.8% | 4.3% | -4.3% | 15.0% | |
| |
|---|
| Median (10 companies) | 13.8% | -0.9% | -15.7% | 14.8% | |
|---|
| Plastics Capital ($PLA) | | 21.9% | 28.4% | 29.5% | 16.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Uralkali PJSC ($URKA) | 74.3% | 81.8% | 75.9% | 73.2% | |
| Victrex ($VCT) | 64.6% | 63.8% | 62.9% | 63.3% | |
| Hardide ($HDD) | 68.8% | | 32.0% | 49.1% | |
| Acron JSC ($AKRN) | 42.8% | 52.7% | 49.3% | 45.0% | |
| Phosagro OJSC ($PHOR) | 45.2% | 56.2% | 54.0% | 44.1% | |
| |
|---|
| Median (10 companies) | 42.8% | 40.3% | 35.8% | 41.3% | |
|---|
| Plastics Capital ($PLA) | 36.0% | 35.3% | 33.2% | 32.1% | 31.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Uralkali PJSC ($URKA) | 48.6% | 62.3% | 51.9% | 48.6% | |
| Victrex ($VCT) | 44.4% | 45.2% | 45.9% | 44.3% | |
| Acron JSC ($AKRN) | 27.2% | 36.2% | 33.2% | 31.5% | |
| Arab Potash Co ($APOD) | 27.7% | 39.6% | 19.0% | 29.9% | |
| Phosagro OJSC ($PHOR) | 30.5% | 43.5% | 38.5% | 28.3% | |
| |
|---|
| Median (10 companies) | 26.7% | 31.9% | 19.0% | 27.9% | |
|---|
| Plastics Capital ($PLA) | 15.5% | 13.3% | 9.5% | 8.9% | 8.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Phosagro OJSC ($PHOR) | 16.7% | 22.4% | 21.4% | 19.8% | |
| Acron JSC ($AKRN) | 15.4% | 14.2% | 13.6% | 12.0% | |
| Croda International ($50GP) | 6.0% | 8.6% | 8.3% | 11.3% | |
| Uralkali PJSC ($URKA) | 9.8% | 10.9% | 13.9% | 9.8% | |
| Lg Chem ($LGCD) | 6.3% | 8.1% | 6.8% | 8.8% | |
| |
|---|
| Median (10 companies) | 6.3% | 8.4% | 8.3% | 7.5% | |
|---|
| Plastics Capital ($PLA) | 5.8% | 2.5% | 4.5% | 5.3% | 4.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Croda International ($50GP) | 35.3% | 30.5% | 27.7% | 27.5% | |
| Victrex ($VCT) | 29.7% | 28.9% | 26.0% | 24.9% | |
| Phosagro OJSC ($PHOR) | 21.6% | 41.2% | 31.1% | 17.0% | |
| Lg Chem ($LGCD) | 8.6% | 11.6% | 12.0% | 16.0% | |
| Basf Se ($BFA) | 16.6% | 13.5% | 13.0% | 15.5% | |
| |
|---|
| Median (11 companies) | 13.2% | 17.3% | 12.8% | 15.2% | |
|---|
| Plastics Capital ($PLA) | 8.6% | 6.8% | 4.3% | 7.2% | 6.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Uralkali PJSC ($URKA) | 1.8x | 2.8x | 4.7x | 4.0x | |
| Phosagro OJSC ($PHOR) | 2.5x | 1.3x | 1.5x | 2.3x | |
| Acron JSC ($AKRN) | 2.8x | 1.4x | 1.8x | 2.0x | |
| Frutarom Industries ($FRUT) | 1.1x | 2.6x | 2.2x | 2.0x | |
| Croda International ($50GP) | 0.6x | 0.9x | 1.1x | 1.0x | |
| |
|---|
| Median (9 companies) | 1.0x | 1.2x | 1.4x | 1.0x | |
|---|
| Plastics Capital ($PLA) | 1.4x | 2.2x | 2.3x | 2.8x | 2.3x |
