600 Group reports 29.4% EBITDA decline in 2018 while 12.3% Revenue growth
20 Jul 2018 • About 600 Group (
$SIXH) • By InTwits
600 Group reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 4.6% in FY2018, 7.2% in FY2017, -1.1% in FY2016, 7.9% in FY2015, 5.8% in FY2014
- 600 Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 4.1%
- CAPEX is quite volatile: £1m in FY2018, £1m in FY2017, £2m in FY2016, £1m in FY2015, £1m in FY2014
- The company has potentially unprofitable business model: ROIC is 2.4%
- It operates with high leverage: Net Debt/EBITDA is 5.2x while industry average is -8.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
600 Group's Revenue jumped on 12.3%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 12.0 pp from 5.8% to 17.8% in FY2018.
Gross Margin decreased slightly on 0.94 pp from 34.7% to 33.7% in FY2018. SG&A as a % of Revenue showed almost no change in FY2018.
Net Income margin showed almost no change in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 1.1%. 600 Group's CAPEX/Revenue decreased slightly on 1.1 pp from 2.2% in FY2015 to 1.1% in FY2018. It's average level of CAPEX/Revenue for the last three years was 1.8%.
Return on investment
The company operates at low ROIC (2.4%) and ROE (5.0%). ROIC decreased slightly on 1.9 pp from 4.3% to 2.4% in FY2018. ROE showed almost no change in FY2018. During the last 5 years ROE bottomed in FY2016 at 3.1% and was growing since that time.
Leverage (Debt)
Debt level is 5.2x Net Debt / EBITDA and 5.7x Debt / EBITDA. Net Debt / EBITDA surged on 1.2x from 4.0x to 5.2x in FY2018. Debt decreased on 6.3% while cash surged on 24.0%.
600 Group has short term refinancing risk: cash is only 33.4% of short term debt.
Financial and operational results
FY ended 31 Mar 2018
600 Group ($SIXH) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 41.707 | 43.794 | 45.269 | 58.790 | 66.014 | 12.3% |
| Gross Profit | 13.857 | 14.420 | 14.476 | 20.391 | 22.278 | 9.3% |
| SG&A | | | | 16.712 | 18.824 | 12.6% |
| EBITDA | 2.408 | 3.477 | -0.494 | 4.258 | 3.007 | -29.4% |
| Net Income | 1.852 | 2.333 | 1.157 | 2.574 | 3.049 | 18.5% |
Balance Sheet
|
|---|
| Cash | 1.149 | 0.902 | 0.765 | 1.352 | 1.676 | 24.0% |
| Short Term Debt | 3.982 | 3.295 | 3.275 | 6.890 | 5.025 | -27.1% |
| Long Term Debt | 2.475 | 8.405 | 11.376 | 11.552 | 12.251 | 6.1% |
Cash flow
|
|---|
| Capex | 0.545 | 0.944 | 1.522 | 0.612 | 0.694 | 13.4% |
Ratios
|
|---|
| Revenue growth | -0.2% | 5.0% | 3.4% | 29.9% | 12.3% | |
| EBITDA growth | 42.7% | 44.4% | -114.2% | -961.9% | -29.4% | |
|
|---|
| Gross Margin | 33.2% | 32.9% | 32.0% | 34.7% | 33.7% | -0.9% |
| EBITDA Margin | 5.8% | 7.9% | -1.1% | 7.2% | 4.6% | -2.7% |
| SG&A, % of revenue | | | | 28.4% | 28.5% | 0.1% |
| Net Income Margin | 4.4% | 5.3% | 2.6% | 4.4% | 4.6% | 0.2% |
| CAPEX, % of revenue | 1.3% | 2.2% | 3.4% | 1.0% | 1.1% | 0.0% |
|
|---|
| ROIC | 5.7% | 6.6% | -1.9% | 4.3% | 2.4% | -1.9% |
| ROE | 8.4% | 8.2% | 3.1% | 4.9% | 5.0% | 0.1% |
| Net Debt/EBITDA | 2.2x | 3.1x | | 4.0x | 5.2x | 1.2x |
Peers in Industrial Engineering
Below we provide 600 Group benchmarking against other companies in Industrial Engineering 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 |
|---|
| Flowtech Fluidpower ($FLO) | 17.7% | 18.7% | 19.9% | 45.6% | |
| Corac Group ($CRA) | 12.2% | -5.7% | 3.8% | 38.8% | |
| Molins ($MLIN) | -16.9% | -0.5% | -52.3% | 28.7% | |
| Mincon Group ($MCON) | 4.2% | 28.8% | 8.4% | 27.8% | |
| Ab Dynamics ($ABDP) | 13.8% | 19.3% | 23.9% | 20.0% | |
| |
|---|
| Median (20 companies) | 5.8% | 0.3% | 4.0% | 7.9% | 17.3% |
|---|
| 600 Group ($SIXH) | | 5.0% | 3.4% | 29.9% | 12.3% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 54.0% | 55.8% | 56.8% | 56.9% | |
| Rotork ($76ID) | 48.0% | 45.7% | 44.3% | 44.2% | |
| Tricorn Group ($TCN) | 36.1% | 36.0% | 40.3% | 40.6% | 38.3% |
| Amiad Water Systems Ltd ($AFS) | 38.9% | 40.5% | 39.3% | 39.5% | |
| Mincon Group ($MCON) | 43.2% | 40.2% | 40.1% | 36.5% | |
| |
|---|
| Median (17 companies) | 30.2% | 34.2% | 30.5% | 32.2% | 29.2% |
|---|
| 600 Group ($SIXH) | 33.2% | 32.9% | 32.0% | 34.7% | 33.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 27.4% | 28.2% | 30.1% | 32.2% | |
| Rotork ($76ID) | 28.0% | 25.0% | 22.8% | 19.9% | |
| Ab Dynamics ($ABDP) | 20.1% | 24.0% | 22.7% | 19.0% | |
| Mincon Group ($MCON) | 22.7% | 17.6% | 16.4% | 14.3% | |
| Northbridge Industrial Services ($NBI) | 32.4% | 32.5% | 9.1% | 14.1% | |
| |
|---|
| Median (19 companies) | 7.5% | 8.2% | 8.0% | 10.0% | 6.9% |
|---|
| 600 Group ($SIXH) | 5.8% | 7.9% | -1.1% | 7.2% | 4.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ab Dynamics ($ABDP) | 2.5% | 4.2% | 7.9% | 32.7% | |
| Chamberlin ($CMH) | 2.6% | 3.1% | 4.2% | 11.6% | 7.9% |
| Ms International ($MSI) | 2.0% | 1.8% | 4.7% | 7.7% | 1.6% |
| Mincon Group ($MCON) | 4.3% | 2.5% | 6.9% | 5.8% | |
| Renold ($RNO) | 3.3% | 2.1% | 4.8% | 4.6% | 4.5% |
| |
|---|
| Median (19 companies) | 2.4% | 2.2% | 3.5% | 3.0% | 4.2% |
|---|
| 600 Group ($SIXH) | 1.3% | 2.2% | 3.4% | 1.0% | 1.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 51.7% | 54.3% | 51.7% | 55.2% | |
| Renold ($RNO) | -2.5% | 41.3% | 39.1% | 44.7% | 21.3% |
| Ab Dynamics ($ABDP) | 28.4% | 31.4% | 28.0% | 19.3% | |
| Braime(T.F.& J.H.)(Hldgs) ($BMTO) | 11.9% | 7.5% | 10.9% | 17.2% | |
| Rotork ($76ID) | 38.1% | 21.9% | 17.0% | 15.7% | |
| |
|---|
| Median (20 companies) | 11.0% | 9.5% | 7.1% | 7.6% | 12.1% |
|---|
| 600 Group ($SIXH) | 5.7% | 6.6% | -1.9% | 4.3% | 2.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Tricorn Group ($TCN) | 5.8x | 4.0x | 7.2x | 5.1x | 2.3x |
| Pressure Technologies ($PRES) | -0.7x | 1.3x | 2.3x | 4.8x | |
| Chamberlin ($CMH) | | 2.2x | 2.2x | 4.3x | 5.8x |
| Northbridge Industrial Services ($NBI) | 1.2x | 1.5x | 4.9x | 2.7x | |
| Flowtech Fluidpower ($FLO) | 1.0x | 1.3x | 1.8x | 1.9x | |
| |
|---|
| Median (18 companies) | 0.1x | 0.7x | 1.2x | 0.3x | 1.8x |
|---|
| 600 Group ($SIXH) | 2.2x | 3.1x | | 4.0x | 5.2x |
