Leeds Group Debt dropped on 28.6% while Revenue increased slightly on 1.2%
10 Aug 2018 • About Leeds Group (
$LDSG) • By InTwits
Leeds Group reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is relatively stable: 4.2% in FY2018 vs. 5.1% in FY2017 vs. 5.6% in FY2014
- Leeds Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.9%. At the same time it's a lot of higher than industry average of 1.6%.
- CAPEX is quite volatile: £0m in FY2018, £2m in FY2017, £4m in FY2016, £0m in FY2015, £0m in FY2014
- The company has potentially unprofitable business model: ROIC is 4.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.5x while industry average is -2.1x
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 slightly on 1.2%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 12.0 pp from 5.8% to 17.8% in FY2018. EBITDA Margin stuck to a declining trend at -0.28 pp per annum in the last 5 years.
Gross Margin increased slightly on 0.78 pp from 20.9% to 21.7% in FY2018. During FY2014-FY2018 Gross Margin bottomed in FY2017 at 20.9%. SG&A as a % of Revenue increased slightly on 2.0 pp from 17.1% to 19.0% in FY2018. During FY2014-FY2018 SG&A as a % of Revenue bottomed in FY2016 at 10.9% and was growing since that time.
Net Income margin decreased slightly on 1.4 pp from 2.7% to 1.3% in FY2018. Net Income margin pursued a declining trend in FY2014-FY2018.
Investments (CAPEX, working capital and M&A)
Leeds Group's CAPEX/Revenue was 0.96% in FY2018. CAPEX/Revenue showed almost no change from FY2015 to FY2018. It's average level of CAPEX/Revenue for the last three years was 6.0%. During FY2014-FY2018 CAPEX as a % of Revenue topped in FY2016 at 11.5% and was declining since that time.
Return on investment
The company operates at low ROIC (4.6%) and ROE (2.9%). ROIC decreased on 2.2 pp from 6.8% to 4.6% in FY2018. ROE decreased on 3.7 pp from 6.6% to 2.9% in FY2018. ROIC stuck to a declining trend at -1.6 pp per annum in FY2014-FY2018. ROE pursued a declining trend in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.5x and Debt / EBITDA is 2.9x. Net Debt / EBITDA decreased on 0.1x from 2.6x to 2.5x in FY2018. Debt dropped on 28.6% while cash dropped on 63.5%. Net Debt/EBITDA followed a growing trend at 0.9x per annum in the last 5 years.
Leeds Group has short term refinancing risk: cash is only 42.4% of short term debt.
Financial and operational results
FY ended 30 Nov -0001
Leeds Group ($LDSG) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 34.210 | 34.859 | 36.272 | 41.053 | 41.538 | 1.2% |
| Gross Profit | 7.770 | 7.793 | 7.709 | 8.585 | 9.012 | 5.0% |
| SG&A | 6.088 | 6.171 | 3.949 | 7.008 | 7.910 | 12.9% |
| EBITDA | 1.903 | 1.850 | 1.844 | 2.112 | 1.763 | -16.5% |
| Net Income | 1.079 | 1.053 | 1.039 | 1.114 | 0.545 | -51.1% |
Balance Sheet
|
|---|
| Cash | 1.772 | 2.027 | 1.612 | 1.567 | 0.572 | -63.5% |
| Short Term Debt | 0.044 | 0.766 | 0.415 | 3.103 | 1.349 | -56.5% |
| Long Term Debt | 0.813 | 0.665 | 3.843 | 3.984 | 3.708 | -6.9% |
Cash flow
|
|---|
| Capex | 0.221 | 0.298 | 4.156 | 2.280 | 0.400 | -82.5% |
Ratios
|
|---|
| Revenue growth | 9.9% | 1.9% | 4.1% | 13.2% | 1.2% | |
| EBITDA growth | 9.6% | -2.8% | -0.3% | 14.5% | -16.5% | |
|
|---|
| Gross Margin | 22.7% | 22.4% | 21.3% | 20.9% | 21.7% | 0.8% |
| EBITDA Margin | 5.6% | 5.3% | 5.1% | 5.1% | 4.2% | -0.9% |
| SG&A, % of revenue | 17.8% | 17.7% | 10.9% | 17.1% | 19.0% | 2.0% |
| Net Income Margin | 3.2% | 3.0% | 2.9% | 2.7% | 1.3% | -1.4% |
| CAPEX, % of revenue | 0.6% | 0.9% | 11.5% | 5.6% | 1.0% | -4.6% |
|
|---|
| ROIC | 10.6% | 10.6% | 8.5% | 6.8% | 4.6% | -2.2% |
| ROE | 7.8% | 7.6% | 7.1% | 6.6% | 2.9% | -3.7% |
| Net Debt/EBITDA | -0.5x | -0.3x | 1.4x | 2.6x | 2.5x | -0.1x |
Peers in Financial Services
Below you can find Leeds Group benchmarking vs. other companies in Financial 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 |
|---|
| Starvest ($SVE) | | -52.9% | -4.8% | 346.6% | |
| Henderson Group ($HGG) | 13.8% | 13.0% | -1.0% | 90.7% | |
| Arden Partners ($ARDN) | -21.3% | -31.0% | 6.8% | 78.9% | |
| Impax Asset Management Group ($IPX) | 10.3% | -3.1% | 6.8% | 55.2% | |
| Afh Financial Group ($AFHP) | 39.3% | 39.5% | 15.0% | 39.4% | |
| |
|---|
| Median (33 companies) | 3.1% | 2.9% | 6.8% | 12.3% | 16.2% |
|---|
| Leeds Group ($LDSG) | | 1.9% | 4.1% | 13.2% | 1.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Record ($REC) | 99.6% | 99.3% | 99.0% | 98.8% | 98.7% |
| London Capital Group Hldgs ($LCG) | 73.6% | 67.9% | 84.2% | 86.4% | |
| Schroders ($SDRC) | 77.7% | 78.3% | 79.9% | 80.0% | |
| First Property Group ($FPO) | 67.9% | 83.0% | 80.6% | 78.6% | 76.3% |
| Walker Crips Group ($WCW) | 68.2% | 66.7% | 67.7% | 69.8% | 67.2% |
| |
|---|
| Median (13 companies) | 52.2% | 52.8% | 63.3% | 53.4% | 67.2% |
|---|
| Leeds Group ($LDSG) | 22.7% | 22.4% | 21.3% | 20.9% | 21.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Real Estate Credit Investments Pcc ($RECP) | 77.0% | 80.3% | 79.3% | 79.5% | 81.8% |
| Hargreaves Lansdown ($HL.) | 58.7% | 51.2% | 57.5% | 69.3% | 66.8% |
| Plus500 Ltd ($PLUS) | 63.5% | 48.2% | 46.0% | 59.3% | |
| First Property Group ($FPO) | 40.2% | 42.9% | 52.2% | 57.4% | 52.9% |
| Livermore Investments Group Ltd ($LIV) | 78.8% | 83.5% | 71.9% | 56.8% | |
| |
|---|
| Median (30 companies) | 16.8% | 18.3% | 18.5% | 22.8% | 37.2% |
|---|
| Leeds Group ($LDSG) | 5.6% | 5.3% | 5.1% | 5.1% | 4.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Daishin Securities Co ($DSS) | 15.0% | 6.5% | 15.1% | 11.2% | |
| First Property Group ($FPO) | 0.3% | 0.1% | 6.4% | 8.5% | 9.4% |
| Schroders ($SDRC) | 1.5% | 1.9% | 3.0% | 6.9% | |
| Record ($REC) | 0.1% | 0.6% | 0.1% | 3.8% | 1.0% |
| Guinness Peat Group ($GPG) | 2.9% | 3.0% | 2.8% | 3.3% | |
| |
|---|
| Median (30 companies) | 0.8% | 0.9% | 0.8% | 1.0% | 1.3% |
|---|
| Leeds Group ($LDSG) | 0.6% | 0.9% | 11.5% | 5.6% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Plus500 Ltd ($PLUS) | 164.3% | 116.5% | 118.9% | 143.2% | |
| Fulcrum Utility Services Ld ($FCRM) | | | 347.2% | 103.4% | 29.9% |
| Hargreaves Lansdown ($HL.) | 101.0% | 87.5% | 90.0% | 93.3% | 82.4% |
| Guinness Peat Group ($GPG) | 10.0% | 13.7% | 23.8% | 28.8% | |
| Lighthouse Group ($LGT) | 8.6% | 14.6% | 25.7% | 26.6% | |
| |
|---|
| Median (34 companies) | 7.6% | 7.6% | 7.5% | 9.9% | 11.4% |
|---|
| Leeds Group ($LDSG) | 10.6% | 10.6% | 8.5% | 6.8% | 4.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Daishin Securities Co ($DSS) | 10.7x | 8.0x | 13.4x | 12.7x | |
| First Property Group ($FPO) | 5.6x | 12.3x | 9.4x | 7.6x | 7.7x |
| S & U ($46IE) | 1.7x | 3.1x | 0.5x | 1.8x | 3.2x |
| Guinness Peat Group ($GPG) | -2.1x | -1.6x | -0.4x | 1.2x | |
| Schroders ($SDRC) | -0.7x | 0.1x | 0.8x | 1.1x | |
| |
|---|
| Median (26 companies) | -2.3x | -1.2x | -1.4x | -1.6x | -0.9x |
|---|
| Leeds Group ($LDSG) | -0.5x | -0.3x | 1.4x | 2.6x | 2.5x |
