Jaywing EBITDA dropped on 29.5% and EBITDA Margin decreased slightly on 1.7 pp from 5.0% to 3.3%
10 Jul 2018 • About Jaywing (
$JWNG) • By InTwits
Jaywing reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Jaywing is a growth stock: FY2018 revenue growth was 6.7%, 5 year revenue CAGR was 12.1% at FY2018 ROIC -2.5%
- EBITDA Margin is quite volatile: 3.3% in FY2018, 5.0% in FY2017, 9.0% in FY2016, 8.2% in FY2015, 6.5% in FY2014
- Jaywing has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's a lot of higher than industry average of 1.6%.
- CAPEX is quite volatile: £1m in FY2018, £1m in FY2017, £0m in FY2016, £0m in FY2015, £0m in FY2014
- The company has unprofitable business model: ROIC is -2.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.8x while industry average is -1.9x
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 increased on 6.7%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.7 pp from 5.0% to 3.3% in FY2018. During the last 5 years EBITDA Margin topped in FY2016 at 9.0% and was declining since that time.
Gross Margin decreased on 3.6 pp from 80.8% to 77.2% in FY2018. During the last 5 years Gross Margin topped in FY2015 at 89.0% and was declining since that time.
Net Income margin increased on 4.3 pp from -6.7% to -2.4% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 Jaywing had CAPEX/Revenue of 1.8%. Jaywing's CAPEX/Revenue increased slightly on 0.56 pp from 1.3% in FY2015 to 1.8% in FY2018. For the last three years the average CAPEX/Revenue was 1.7%. The company maintained rich investment policy and has spent a big chunk of EBITDA (54.9%) to CAPEX.
Return on investment
The company operates at negative ROIC (-2.5%) and ROE (-3.5%). ROIC increased on 4.7 pp from -7.2% to -2.5% in FY2018. ROE increased on 5.6 pp from -9.1% to -3.5% in FY2018.
Leverage (Debt)
Debt level is 3.8x Net Debt / EBITDA and 4.2x Debt / EBITDA. Net Debt / EBITDA surged on 2.2x from 1.6x to 3.8x in FY2018. Debt jumped on 13.9% while cash dropped on 71.5%. During the last 5 years Net Debt/EBITDA bottomed in FY2017 at 1.6x.
Jaywing has short term refinancing risk: cash is only 13.3% of short term debt.
Financial and operational results
FY ended 31 Mar 2018
Jaywing ($JWNG) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 26.693 | 33.789 | 35.973 | 44.537 | 47.541 | 6.7% |
| Gross Profit | 21.624 | 30.086 | 31.792 | 35.977 | 36.715 | 2.1% |
| SG&A | | 5.657 | | | | |
| EBITDA | 1.735 | 2.764 | 3.235 | 2.234 | 1.575 | -29.5% |
| Net Income | -4.795 | -1.478 | 0.705 | -2.981 | -1.133 | |
Balance Sheet
|
|---|
| Cash | 1.994 | 1.000 | 0.347 | 2.216 | 0.632 | -71.5% |
| Short Term Debt | 4.612 | 4.062 | 4.612 | 4.750 | 4.750 | 0.0% |
| Long Term Debt | 3.188 | 2.126 | 1.063 | 1.000 | 1.800 | 80.0% |
Cash flow
|
|---|
| Capex | 0.392 | 0.427 | 0.469 | 0.815 | 0.865 | 6.1% |
Ratios
|
|---|
| Revenue growth | -0.7% | 26.6% | 6.5% | 23.8% | 6.7% | |
| EBITDA growth | -48.7% | 59.3% | 17.0% | -30.9% | -29.5% | |
|
|---|
| Gross Margin | 81.0% | 89.0% | 88.4% | 80.8% | 77.2% | -3.6% |
| EBITDA Margin | 6.5% | 8.2% | 9.0% | 5.0% | 3.3% | -1.7% |
| SG&A, % of revenue | | 16.7% | | | | |
| Net Income Margin | -18.0% | -4.4% | 2.0% | -6.7% | -2.4% | 4.3% |
| CAPEX, % of revenue | 1.5% | 1.3% | 1.3% | 1.8% | 1.8% | -0.0% |
|
|---|
| ROIC | -0.7% | -2.6% | 3.3% | -7.2% | -2.5% | 4.7% |
| ROE | -13.3% | -4.5% | 2.2% | -9.1% | -3.5% | 5.6% |
| Net Debt/EBITDA | 3.3x | 1.9x | 1.6x | 1.6x | 3.8x | 2.2x |
Peers in Media
Below you can find Jaywing benchmarking vs. other companies in Media 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 |
|---|
| Marimedia Ltd ($MARI) | 45.7% | 20.1% | 66.0% | 67.6% | |
| Future ($FUTR) | -20.1% | -9.4% | -1.3% | 43.1% | |
| Grupo Clarin Sa ($GCLA) | 39.8% | -57.9% | 37.2% | 24.4% | |
| Tla Worldwide ($TLA) | 6.3% | 130.0% | 10.6% | 23.4% | |
| Dcd Media ($DCD) | -21.2% | 14.5% | -22.7% | 19.1% | |
| |
|---|
| Median (24 companies) | 1.5% | 0.8% | 3.4% | 2.7% | 9.2% |
|---|
| Jaywing ($JWNG) | | 26.6% | 6.5% | 23.8% | 6.7% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Porta Communications ($PTCM) | 83.4% | 79.0% | 80.1% | 84.9% | |
| Tla Worldwide ($TLA) | 99.9% | 78.8% | 75.5% | 68.1% | |
| Spaceandpeople ($SAL) | 62.2% | 58.8% | 57.2% | 66.1% | |
| Reed Elsevier ($REL) | 65.3% | 64.3% | 63.9% | 64.2% | |
| Haynes Publishing Group ($HYNS) | 52.9% | 60.2% | 53.6% | 56.4% | |
| |
|---|
| Median (22 companies) | 43.7% | 41.2% | 38.5% | 39.5% | 40.6% |
|---|
| Jaywing ($JWNG) | 81.0% | 89.0% | 88.4% | 80.8% | 77.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Haynes Publishing Group ($HYNS) | 38.8% | 33.5% | 15.4% | 35.0% | |
| Reed Elsevier ($REL) | 32.7% | 32.7% | 33.9% | 34.4% | |
| Nahl Group ($NAH) | 28.8% | 29.5% | 34.9% | 27.4% | |
| Uls Technology ($ULS) | 16.7% | 21.1% | 19.8% | 21.2% | 13.8% |
| Spaceandpeople ($SAL) | 10.5% | 11.2% | 1.6% | 17.2% | |
| |
|---|
| Median (24 companies) | 14.8% | 12.5% | 7.0% | 6.8% | 10.5% |
|---|
| Jaywing ($JWNG) | 6.5% | 8.2% | 9.0% | 5.0% | 3.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Trader Media East ($TME) | 3.8% | 2.3% | | 47.5% | |
| Dods(Group ($DODS) | 0.6% | 0.4% | 0.6% | 12.7% | 1.3% |
| Grupo Clarin Sa ($GCLA) | 12.8% | 1.6% | 2.7% | 2.7% | |
| Naspers ($NPSN) | | 4.0% | 3.1% | 2.5% | 2.0% |
| Ite Group ($ITE) | 1.7% | 1.3% | 1.8% | 2.1% | |
| |
|---|
| Median (24 companies) | 1.6% | 1.1% | 0.7% | 0.8% | 0.8% |
|---|
| Jaywing ($JWNG) | 1.5% | 1.3% | 1.3% | 1.8% | 1.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Uls Technology ($ULS) | 44.1% | 39.6% | 39.3% | 31.3% | 19.1% |
| Independent News & Media ($INM) | 29.6% | 65.1% | 118.5% | 24.4% | |
| Marimedia Ltd ($MARI) | 39.0% | 6.4% | 39.6% | 23.9% | |
| Reed Elsevier ($REL) | 21.0% | 21.4% | 21.4% | 21.4% | |
| Nahl Group ($NAH) | 31.5% | 26.0% | 23.0% | 17.3% | |
| |
|---|
| Median (26 companies) | 8.2% | 7.6% | 1.4% | 0.8% | 11.8% |
|---|
| Jaywing ($JWNG) | -0.7% | -2.6% | 3.3% | -7.2% | -2.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ite Group ($ITE) | 0.3x | 1.4x | 6.3x | 7.3x | |
| Porta Communications ($PTCM) | 3.4x | 2.7x | | 5.0x | |
| Quarto Group Inc ($QRT) | 1.4x | 1.1x | 1.8x | 3.9x | |
| Reed Elsevier ($REL) | 1.9x | 1.9x | 2.2x | 2.0x | |
| Future ($FUTR) | | 1.6x | | 1.9x | |
| |
|---|
| Median (17 companies) | 0.8x | 1.1x | -0.1x | 0.5x | -2.7x |
|---|
| Jaywing ($JWNG) | 3.3x | 1.9x | 1.6x | 1.6x | 3.8x |
