Begbies Traynor Group reports 6.8% EBITDA growth in 2018 and 5.5% Revenue growth
10 Jul 2018 • About Begbies Traynor Group (
$BEG) • By InTwits
Begbies Traynor Group reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Begbies Traynor Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. 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, £0m in FY2014
- The company has potentially unprofitable business model: ROIC is 3.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.4x while industry average is 1.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Begbies Traynor Group's Revenue increased on 5.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.4 pp from 6.5% to 8.9% in FY2018. EBITDA Margin followed a declining trend at -2.4 pp per annum in the last 5 years.
Gross Margin decreased slightly on 0.86 pp from 43.4% to 42.5% in FY2018. Gross Margin followed a declining trend at -0.85 pp per annum in FY2014-FY2018. SG&A as a % of Revenue decreased on 2.9 pp from 40.9% to 38.0% in FY2018.
Net Income margin increased on 3.2 pp from -0.53% to 2.7% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.75% in FY2018. The company's CAPEX/Revenue decreased slightly on 2.0 pp from 2.7% in FY2015 to 0.75% in FY2018. It's average level of CAPEX/Revenue for the last three years was 0.78%.
Return on investment
The company operates at low ROIC (3.6%) and ROE (2.4%). ROIC increased slightly on 1.6 pp from 2.0% to 3.6% in FY2018. ROE increased on 2.9 pp from -0.45% to 2.4% in FY2018. During FY2014-FY2018 ROIC bottomed in FY2017 at 2.0%.
Leverage (Debt)
Debt level is 1.4x Net Debt / EBITDA and 2.1x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 2.0x to 1.4x in FY2018. Debt dropped on 35.3% while cash dropped on 47.6%.
The company has no short term refinancing risk: short term debt is zero.
Financial and operational results
FY ended 30 Nov -0001
Begbies Traynor Group ($BEG) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 44.089 | 45.360 | 50.135 | 49.685 | 52.441 | 5.5% |
| Gross Profit | 20.307 | 20.316 | 22.077 | 21.555 | 22.300 | 3.5% |
| SG&A | 13.945 | 15.826 | 16.838 | 20.309 | 19.922 | -1.9% |
| EBITDA | 8.666 | 7.133 | 8.256 | 5.025 | 5.365 | 6.8% |
| Net Income | 3.025 | -1.580 | 0.294 | -0.263 | 1.424 | |
Balance Sheet
|
|---|
| Cash | 7.541 | 9.209 | 7.634 | 6.715 | 3.518 | -47.6% |
| Short Term Debt | 0.026 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 22.000 | 22.000 | 18.000 | 17.000 | 11.000 | -35.3% |
Cash flow
|
|---|
| Capex | 0.360 | 1.230 | 0.511 | 0.289 | 0.394 | 36.3% |
Ratios
|
|---|
| Revenue growth | -13.7% | 2.9% | 10.5% | -0.9% | 5.5% | |
| EBITDA growth | -32.3% | -17.7% | 15.7% | -39.1% | 6.8% | |
|
|---|
| Gross Margin | 46.1% | 44.8% | 44.0% | 43.4% | 42.5% | -0.9% |
| EBITDA Margin | 19.7% | 15.7% | 16.5% | 10.1% | 10.2% | 0.1% |
| SG&A, % of revenue | 31.6% | 34.9% | 33.6% | 40.9% | 38.0% | -2.9% |
| Net Income Margin | 6.9% | -3.5% | 0.6% | -0.5% | 2.7% | 3.2% |
| CAPEX, % of revenue | 0.8% | 2.7% | 1.0% | 0.6% | 0.8% | 0.2% |
|
|---|
| ROIC | 8.5% | 5.3% | 5.1% | 2.0% | 3.6% | 1.6% |
| ROE | 5.2% | -2.6% | 0.5% | -0.4% | 2.4% | 2.9% |
| Net Debt/EBITDA | 1.7x | 1.8x | 1.3x | 2.0x | 1.4x | -0.7x |
Peers in Support Services
Below you can find Begbies Traynor Group benchmarking vs. other companies in Support 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 |
|---|
| Mobilityone Ltd ($MBO) | 3.7% | 23.0% | -5.3% | 37.9% | |
| Mortice Ltd ($MORT) | 11.0% | 18.9% | 51.1% | 36.1% | |
| Rws Hldgs ($RWS) | 20.9% | 1.8% | 28.1% | 34.5% | |
| Empresaria Group ($EMR) | -3.3% | -0.3% | 44.4% | 32.1% | |
| Norish ($NSH) | 3.7% | 16.4% | 16.7% | 31.4% | |
| |
|---|
| Median (48 companies) | 5.0% | 7.2% | 2.2% | 7.5% | 8.2% |
|---|
| Begbies Traynor Group ($BEG) | | 2.9% | 10.5% | -0.9% | 5.5% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inspired Energy ($INSE) | 78.7% | 76.2% | 80.5% | 83.1% | |
| Ienergizer Ltd ($IBPO) | 76.8% | 72.7% | 71.3% | 71.2% | 69.7% |
| Spectra Systems Corp ($SPSY) | 51.4% | 47.6% | 68.3% | 71.1% | |
| Vianet Group ($VNET) | 58.8% | 69.2% | 70.1% | 69.7% | 69.9% |
| Grafenia ($GRA) | 56.1% | 70.8% | 66.3% | 63.0% | 57.0% |
| |
|---|
| Median (42 companies) | 29.2% | 28.1% | 27.0% | 27.7% | 24.9% |
|---|
| Begbies Traynor Group ($BEG) | 46.1% | 44.8% | 44.0% | 43.4% | 42.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Northgate ($67GX) | 40.6% | 39.4% | 38.3% | 35.9% | 35.4% |
| Spectra Systems Corp ($SPSY) | 12.3% | 6.0% | 19.7% | 34.0% | |
| Inspired Energy ($INSE) | 1.5% | 35.4% | 34.4% | 32.4% | |
| Vp ($VP.) | 24.2% | 26.2% | 28.4% | 28.6% | 27.2% |
| Rws Hldgs ($RWS) | 22.8% | 23.1% | 26.4% | 25.5% | |
| |
|---|
| Median (48 companies) | 6.7% | 6.9% | 4.9% | 5.3% | 8.9% |
|---|
| Begbies Traynor Group ($BEG) | 19.7% | 15.7% | 16.5% | 10.1% | 10.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vp ($VP.) | 21.6% | 25.7% | 24.1% | 26.0% | 23.6% |
| Augean ($AUG) | 12.3% | 12.3% | 11.0% | 10.0% | |
| Petards Group ($PEG) | 0.5% | 0.9% | 1.7% | 10.0% | |
| Capital Drilling Ltd ($CAPD) | 13.9% | 10.1% | 13.7% | 9.0% | |
| Billing Services Group ($BILL) | 2.1% | 4.1% | 3.0% | 4.5% | |
| |
|---|
| Median (48 companies) | 1.0% | 0.9% | 1.1% | 0.9% | 1.7% |
|---|
| Begbies Traynor Group ($BEG) | 0.8% | 2.7% | 1.0% | 0.6% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Sthree ($STHR) | 38.1% | 50.2% | 46.2% | 43.4% | |
| Mortice Ltd ($MORT) | 19.6% | 21.9% | 14.5% | 23.2% | |
| Petards Group ($PEG) | 24.7% | 23.9% | 22.7% | 20.3% | |
| Rws Hldgs ($RWS) | 24.5% | 23.3% | 23.5% | 20.2% | |
| Latham(James) ($LTHM) | 17.5% | 16.8% | 19.2% | 19.3% | 17.4% |
| |
|---|
| Median (49 companies) | 11.1% | 10.7% | 7.9% | 7.9% | 6.9% |
|---|
| Begbies Traynor Group ($BEG) | 8.5% | 5.3% | 5.1% | 2.0% | 3.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Nakama Group ($NAK) | 5.2x | 1.4x | 3.1x | 48.5x | |
| 21St Century Technology ($C21) | -0.8x | -0.2x | | 11.2x | |
| Ceps ($CEPS) | 6.6x | 3.8x | 13.9x | 5.8x | |
| Ibex Global Solutions ($IBEX) | 2.7x | 1.0x | 1.7x | 4.5x | |
| Menzies(John) ($68HN) | 2.0x | 2.4x | 1.2x | 3.0x | |
| |
|---|
| Median (42 companies) | 0.1x | -0.1x | 0.1x | 0.2x | 0.9x |
|---|
| Begbies Traynor Group ($BEG) | 1.7x | 1.8x | 1.3x | 2.0x | 1.4x |
