Lucky Cement Ltd CAPEX surged on 74.7% and Revenue surged on 11.6%
31 Jul 2018 • About Lucky Cement Ltd (
$LKCS) • By InTwits
Lucky Cement Ltd reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Lucky Cement Ltd is a growth stock: FY2018 revenue growth was 11.6%, 5 year revenue CAGR was 11.7% at FY2018 ROIC 12.5%
- Lucky Cement Ltd has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.2%. At the same time it's a lot of higher than industry average of 7.8%.
- CAPEX is quite volatile: 19,836 PKRm in FY2018, 11,353 PKRm in FY2017, 7,389 PKRm in FY2016, 9,857 PKRm in FY2015, 5,603 PKRm in FY2014
- The company has highly profitable business model: ROIC is 12.5%
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 jumped on 11.6%. During the last 5 years Revenue growth bottomed in FY2016 at -0.067% and was accelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.4 pp from 2.2% to 5.6% in 2018. During the last 5 years EBITDA Margin topped in FY2016 at 30.4% and was declining since that time.
Gross Margin decreased on 6.9 pp from 33.1% to 26.2% in FY2018. During the last 5 years Gross Margin topped in FY2016 at 33.9% and was declining since that time. SG&A as a % of Revenue showed almost no change in FY2018.
Net Income margin decreased on 3.4 pp from 18.6% to 15.2% in FY2018. During the last 5 years Net Income margin topped in FY2017 at 18.6%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 20.3% in FY2018. CAPEX/Revenue increased on 8.3 pp from 12.0% in FY2015 to 20.3% in FY2018. It's average level of CAPEX/Revenue for the last three years was 14.1%. The company invested a big chunk of EBITDA (90.6%) to CAPEX to secure its growth.
Return on investment
The company operates at good ROIC (12.5%) and ROE (16.1%). ROIC decreased on 6.2 pp from 18.6% to 12.5% in FY2018. ROE decreased on 4.1 pp from 20.2% to 16.1% in FY2018. ROE stuck to a declining trend at -2.4 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.7x and Debt / EBITDA is 0.9x. Debt jumped on 61.5% while cash decreased on 5.2%.
Lucky Cement Ltd has no short term refinancing risk: cash is higher than short term debt (345.5%).
Financial and operational results
FY ended 30 Jun 2018
Lucky Cement Ltd ($LKCS) key annual financial indicators| mln. PKR | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 81,148 | 82,118 | 82,063 | 87,383 | 97,542 | 11.6% |
| Gross Profit | 23,127 | 25,687 | 27,848 | 28,937 | 25,598 | -11.5% |
| SG&A | | | 5,988 | 6,376 | 7,323 | 14.9% |
| EBITDA | 19,788 | 21,780 | 24,911 | 25,933 | 21,883 | -15.6% |
| Net Income | 11,892 | 13,758 | 14,873 | 16,227 | 14,820 | -8.7% |
Balance Sheet
|
|---|
| Cash | 3,744 | 18,156 | 28,448 | 36,273 | 34,382 | -5.2% |
| Short Term Debt | 1,601 | 3,630 | 3,486 | 2,779 | 9,953 | 258.2% |
| Long Term Debt | 9,983 | 8,854 | 8,742 | 8,826 | 8,790 | -0.4% |
Cash flow
|
|---|
| Capex | 5,603 | 9,857 | 7,389 | 11,353 | 19,836 | 74.7% |
Ratios
|
|---|
| Revenue growth | 44.8% | 1.2% | -0.1% | 6.5% | 11.6% | |
| EBITDA growth | 31.5% | 10.1% | 14.4% | 4.1% | -15.6% | |
|
|---|
| Gross Margin | 28.5% | 31.3% | 33.9% | 33.1% | 26.2% | -6.9% |
| EBITDA Margin | 24.4% | 26.5% | 30.4% | 29.7% | 22.4% | -7.2% |
| SG&A, % of revenue | | | 7.3% | 7.3% | 7.5% | 0.2% |
| Net Income Margin | 14.7% | 16.8% | 18.1% | 18.6% | 15.2% | -3.4% |
| CAPEX, % of revenue | 6.9% | 12.0% | 9.0% | 13.0% | 20.3% | 7.3% |
|
|---|
| ROIC | 20.3% | 20.0% | 20.6% | 18.6% | 12.5% | -6.2% |
| ROE | 26.0% | 24.6% | 22.0% | 20.2% | 16.1% | -4.1% |
| Net Debt/EBITDA | 0.4x | -0.3x | -0.7x | -1.0x | -0.7x | 0.2x |
Peers in Construction & Materials
Below we provide Lucky Cement Ltd 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 ($STCM) | -8.9% | -19.7% | -44.0% | 25.5% | |
| |
|---|
| Median (23 companies) | 10.3% | 1.7% | 6.6% | 11.6% | 7.8% |
|---|
| Lucky Cement Ltd ($LKCS) | | 1.2% | -0.1% | 6.5% | 11.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inch Kenneth Kajang Rubber ($IKK) | 21.7% | 51.7% | 64.7% | 58.1% | |
| Heath(Samuel)& Sons ($HSM) | 48.6% | 47.6% | 48.1% | 51.1% | 49.6% |
| 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 ($MBH) | 31.1% | 38.2% | 34.4% | 35.4% | |
| |
|---|
| Median (22 companies) | 25.8% | 29.1% | 29.7% | 26.4% | 41.9% |
|---|
| Lucky Cement Ltd ($LKCS) | 28.5% | 31.3% | 33.9% | 33.1% | 26.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| 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% | |
| LSR Group OJSC ($LSRG) | 22.9% | 19.3% | 16.0% | 18.2% | |
| |
|---|
| Median (23 companies) | 9.3% | 9.5% | 9.8% | 9.0% | 2.2% |
|---|
| Lucky Cement Ltd ($LKCS) | 24.4% | 26.5% | 30.4% | 29.7% | 22.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inch Kenneth Kajang Rubber ($IKK) | 12.8% | 54.9% | 313.4% | 40.8% | |
| Accsys Technologies ($AXS) | 1.7% | 2.0% | 4.9% | 11.3% | 48.5% |
| Low & Bonar ($BD46) | 4.6% | 9.1% | 4.7% | 6.4% | |
| Heath(Samuel)& Sons ($HSM) | 2.0% | 2.0% | 3.1% | 4.9% | 1.5% |
| Saint-Gobain(Compagnie De) ($COD) | 3.5% | 3.7% | 3.5% | 4.2% | |
| |
|---|
| Median (23 companies) | 2.4% | 2.2% | 2.7% | 2.1% | 1.5% |
|---|
| Lucky Cement Ltd ($LKCS) | 6.9% | 12.0% | 9.0% | 13.0% | 20.3% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Heath(Samuel)& Sons ($HSM) | 19.7% | 32.0% | 89.2% | 54.2% | 35.4% |
| Alumasc Group ($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 ($YOLO) | -49.9% | -26.1% | -51.5% | 24.2% | |
| |
|---|
| Median (25 companies) | 5.4% | 6.4% | 8.2% | 8.6% | 35.4% |
|---|
| Lucky Cement Ltd ($LKCS) | 20.3% | 20.0% | 20.6% | 18.6% | 12.5% |
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 ($LSRG) | 0.1x | 0.7x | 1.8x | 1.7x | |
| |
|---|
| Median (20 companies) | 0.5x | -0.0x | -0.8x | -0.4x | -1.3x |
|---|
| Lucky Cement Ltd ($LKCS) | 0.4x | -0.3x | -0.7x | -1.0x | -0.7x |
