Heath(Samuel)& Sons ROIC dropped on 18.8 pp from 54.2% to 35.4% in 2018 and EBITDA decreased slightly on 0.85%
12 Jul 2018 • About Heath(Samuel)& Sons (
$HSM) • By InTwits
Heath(Samuel)& Sons reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Heath(Samuel)& Sons has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's in pair with industry average of 16.4%
- CAPEX is quite volatile: £0m in FY2018, £1m in FY2017, £0m in FY2016, £0m in FY2015, £0m in FY2014
- The company has highly profitable business model: ROIC is 35.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Heath(Samuel)& Sons's Revenue increased on 10.0%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.3 pp from 7.0% to 10.2% in FY2018. During FY2014-FY2018 EBITDA Margin topped in FY2017 at 13.6%.
Gross Margin decreased slightly on 1.5 pp from 51.1% to 49.6% in FY2018. SG&A as a % of Revenue showed almost no change in FY2018.
Net Income margin decreased slightly on 0.93 pp from 7.8% to 6.8% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 1.5%. The company showed almost no change in CAPEX/Revenue from FY2015 to FY2018. It's average level of CAPEX/Revenue for the last three years was 3.2%.
Return on investment
The company operates at high and attractive ROIC (35.4%) and ROE (21.5%). ROIC dropped on 18.8 pp from 54.2% to 35.4% in FY2018. ROE decreased on 7.2 pp from 28.7% to 21.5% in FY2018. During the last 5 years ROIC topped in FY2016 at 89.2% and was declining since that time. During FY2014-FY2018 ROE topped in FY2016 at 32.1% and was declining since that time.
Leverage (Debt)
The company has no debt. Cash surged on 13.8%.
Financial and operational results
FY ended 31 Mar 2018
Heath(Samuel)& Sons ($HSM) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 10.979 | 11.198 | 12.584 | 13.053 | 14.354 | 10.0% |
| Gross Profit | 5.332 | 5.325 | 6.056 | 6.667 | 7.122 | 6.8% |
| SG&A | 4.634 | 4.727 | 4.900 | 5.223 | 5.787 | 10.8% |
| EBITDA | 1.110 | 1.143 | 1.525 | 1.773 | 1.758 | -0.8% |
| Net Income | 0.443 | 0.394 | 0.769 | 1.013 | 0.980 | -3.3% |
Balance Sheet
|
|---|
| Cash | 2.026 | 1.648 | 2.078 | 2.079 | 2.366 | 13.8% |
| 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 | 0.221 | 0.225 | 0.390 | 0.646 | 0.222 | -65.6% |
Ratios
|
|---|
| Revenue growth | 8.9% | 2.0% | 12.4% | 3.7% | 10.0% | |
| EBITDA growth | 51.0% | 3.0% | 33.4% | 16.3% | -0.8% | |
|
|---|
| Gross Margin | 48.6% | 47.6% | 48.1% | 51.1% | 49.6% | -1.5% |
| EBITDA Margin | 10.1% | 10.2% | 12.1% | 13.6% | 12.2% | -1.3% |
| SG&A, % of revenue | 42.2% | 42.2% | 38.9% | 40.0% | 40.3% | 0.3% |
| Net Income Margin | 4.0% | 3.5% | 6.1% | 7.8% | 6.8% | -0.9% |
| CAPEX, % of revenue | 2.0% | 2.0% | 3.1% | 4.9% | 1.5% | -3.4% |
|
|---|
| ROIC | 19.7% | 32.0% | 89.2% | 54.2% | 35.4% | -18.8% |
| ROE | 10.6% | 12.4% | 32.1% | 28.7% | 21.5% | -7.2% |
| Net Debt/EBITDA | -1.8x | -1.4x | -1.4x | -1.2x | -1.3x | -0.2x |
Peers in Construction & Materials
Below we provide Heath(Samuel)& Sons benchmarking against other companies in Construction & Materials 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 |
|---|
| Inch Kenneth Kajang Rubber ($IKK) | 68.0% | -56.5% | 5.3% | 46.2% | |
| Mountfield Group ($MOGP) | -4.1% | 10.4% | -26.1% | 31.7% | |
| LSR Group OJSC ($LSRG) | | -6.0% | 22.1% | 30.0% | |
| Michelmersh Brick Hldgs ($MBH) | 9.8% | 2.1% | 3.4% | 26.0% | |
| Steppe Cement ($STCM) | -8.9% | -19.7% | -44.0% | 25.5% | |
| |
|---|
| Median (23 companies) | 10.7% | 1.6% | 5.3% | 11.6% | 5.7% |
|---|
| Heath(Samuel)& Sons ($HSM) | | 2.0% | 12.4% | 3.7% | 10.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inch Kenneth Kajang Rubber ($IKK) | 21.7% | 51.7% | 64.7% | 58.1% | |
| James Halstead ($JHD) | 41.0% | 41.7% | 42.4% | 43.5% | 41.9% |
| Billington Hldgs ($BILN) | 38.8% | 36.3% | 37.7% | 35.6% | |
| Michelmersh Brick Hldgs ($MBH) | 31.1% | 38.2% | 34.4% | 35.4% | |
| Lucky Cement Ltd ($LKCS) | 28.5% | 31.3% | 33.9% | 33.1% | |
| |
|---|
| Median (22 companies) | 25.8% | 29.1% | 29.7% | 26.4% | 32.1% |
|---|
| Heath(Samuel)& Sons ($HSM) | 48.6% | 47.6% | 48.1% | 51.1% | 49.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lucky Cement Ltd ($LKCS) | 24.4% | 26.5% | 30.4% | 29.7% | |
| James Halstead ($JHD) | 20.1% | 20.9% | 21.6% | 20.8% | |
| Asia Cement Corp ($ASCD) | 18.3% | 14.8% | 19.1% | 19.4% | |
| Michelmersh Brick Hldgs ($MBH) | 14.1% | 20.3% | 18.7% | 19.4% | |
| Smart(J.)& Co(Contractors) ($SMJ) | -2.0% | 12.3% | 13.7% | 18.6% | |
| |
|---|
| Median (23 companies) | 9.3% | 9.5% | 9.8% | 9.0% | -7.9% |
|---|
| Heath(Samuel)& Sons ($HSM) | 10.1% | 10.2% | 12.1% | 13.6% | 12.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inch Kenneth Kajang Rubber ($IKK) | 12.8% | 54.9% | 313.4% | 40.8% | |
| Lucky Cement Ltd ($LKCS) | 6.9% | 12.0% | 9.0% | 13.0% | |
| Accsys Technologies ($AXS) | 1.7% | 2.0% | 4.9% | 11.3% | 48.5% |
| Low & Bonar ($BD46) | 4.6% | 9.1% | 4.7% | 6.4% | |
| Saint-Gobain(Compagnie De) ($COD) | 3.5% | 3.7% | 3.5% | 4.2% | |
| |
|---|
| Median (23 companies) | 2.5% | 2.3% | 2.7% | 2.1% | 25.0% |
|---|
| Heath(Samuel)& Sons ($HSM) | 2.0% | 2.0% | 3.1% | 4.9% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Alumasc Group ($ALU) | 22.6% | 36.0% | 47.8% | 50.2% | |
| Clarke(T.) ($CTO) | -0.4% | 19.6% | 23.6% | 48.5% | |
| James Halstead ($JHD) | 46.7% | 45.3% | 47.1% | 46.5% | 39.9% |
| Yolo Leisure & Technology ($YOLO) | -49.9% | -26.1% | -51.5% | 24.2% | |
| Billington Hldgs ($BILN) | 14.1% | 17.4% | 18.9% | 19.5% | |
| |
|---|
| Median (25 companies) | 5.4% | 6.4% | 8.2% | 8.6% | 15.9% |
|---|
| Heath(Samuel)& Sons ($HSM) | 19.7% | 32.0% | 89.2% | 54.2% | 35.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Low & Bonar ($BD46) | 2.1x | 2.4x | 2.1x | 14.3x | |
| Asia Cement Corp ($ASCD) | 6.8x | 8.6x | 6.1x | 5.8x | |
| Michelmersh Brick Hldgs ($MBH) | 0.5x | -0.5x | -0.8x | 2.4x | |
| Crh ($CRH) | 1.6x | 3.1x | 1.8x | 1.9x | |
| LSR Group OJSC ($LSRG) | 0.1x | 0.7x | 1.8x | 1.7x | |
| |
|---|
| Median (20 companies) | 0.5x | -0.0x | -0.7x | -0.4x | |
|---|
| Heath(Samuel)& Sons ($HSM) | -1.8x | -1.4x | -1.4x | -1.2x | -1.3x |
