Safeland reports 78.8 pp EBITDA Margin growth from 15.2% to 94.0% in 2018 in 2018 while 77.6% Revenue decline
21 Aug 2018 • About Safeland (
$SAF) • By InTwits
Safeland reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Safeland is a company in decline: FY2018 revenue growth was -77.6%, 5 years revenue CAGR was -19.5%
- EBITDA Margin is quite volatile: 94.0% in FY2018, 15.2% in FY2017, 28.0% in FY2016, 65.8% in FY2015, 7.0% in FY2014
- Safeland has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.8%. At the same time it's a lot of higher than industry average of 2.5%.
- CAPEX is quite volatile: £0m in FY2018, £0m in FY2017, £0m in FY2016, £2m in FY2015, £0m in FY2014
- The company has business model with low profitability: ROIC is 8.9%
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 dropped on 77.6%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 78.8 pp from 15.2% to 94.0% in FY2018.
Gross Margin decreased on 8.4 pp from 18.9% to 10.5% in FY2018. During the last 5 years Gross Margin topped in FY2016 at 33.7% and was declining since that time. SG&A as a % of Revenue jumped on 38.4 pp from 13.3% to 51.7% in FY2018.
Net Income margin surged on 56.1 pp from 17.9% to 74% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 1.5%. Safeland showed big decline in CAPEX/Revenue of 18.0 pp from 19.5% in FY2015 to 1.5% in FY2018. For the last three years the average CAPEX/Revenue was 1.0%.
Return on investment
The company operates at low ROIC (8.9%) and ROE (10.3%). ROIC increased on 2.1 pp from 6.7% to 8.9% in FY2018. ROE decreased slightly on 2.0 pp from 12.3% to 10.3% in FY2018. During FY2014-FY2018 ROE topped in FY2015 at 45.2% and was declining since that time.
Leverage (Debt)
Debt level is 3.4x Net Debt / EBITDA and 3.8x Debt / EBITDA. Net Debt / EBITDA jumped on 2.2x from 1.2x to 3.4x in FY2018. Debt surged on 36.9% while cash dropped on 79.8%.
Safeland has short term refinancing risk: cash is only 10.2% of short term debt.
Financial and operational results
FY ended 31 Mar 2018
Safeland ($SAF) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 10.408 | 10.256 | 21.116 | 12.972 | 2.900 | -77.6% |
| Gross Profit | 2.139 | 2.761 | 7.113 | 2.455 | 0.305 | -87.6% |
| SG&A | | 1.570 | 1.287 | 1.721 | 1.498 | -13.0% |
| EBITDA | 0.731 | 6.752 | 5.920 | 1.972 | 2.725 | 38.2% |
| Net Income | 0.810 | 5.733 | 4.535 | 2.322 | 2.146 | -7.6% |
Balance Sheet
|
|---|
| Cash | 1.003 | 0.454 | 2.988 | 5.280 | 1.066 | -79.8% |
| Short Term Debt | 0.000 | 1.258 | 0.000 | 7.639 | 10.455 | 36.9% |
| Long Term Debt | 8.400 | 7.185 | 10.927 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.115 | 2.003 | 0.105 | 0.143 | 0.044 | -69.2% |
Ratios
|
|---|
| Revenue growth | 21.2% | -1.5% | 105.9% | -38.6% | -77.6% | |
| EBITDA growth | -625.9% | 823.7% | -12.3% | -66.7% | 38.2% | |
|
|---|
| Gross Margin | 20.6% | 26.9% | 33.7% | 18.9% | 10.5% | -8.4% |
| EBITDA Margin | 7.0% | 65.8% | 28.0% | 15.2% | 94.0% | 78.8% |
| SG&A, % of revenue | | 15.3% | 6.1% | 13.3% | 51.7% | 38.4% |
| Net Income Margin | 7.8% | 55.9% | 21.5% | 17.9% | 74.0% | 56.1% |
| CAPEX, % of revenue | 1.1% | 19.5% | 0.5% | 1.1% | 1.5% | 0.4% |
|
|---|
| ROIC | 3.7% | 31.2% | 22.5% | 6.7% | 8.9% | 2.1% |
| ROE | 8.0% | 45.2% | 27.9% | 12.3% | 10.3% | -2.0% |
| Net Debt/EBITDA | 10.1x | 1.2x | 1.3x | 1.2x | 3.4x | 2.2x |
Peers in Real Estate Investment & Services
Below you can find Safeland benchmarking vs. other companies in Real Estate Investment & 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 |
|---|
| Plaza Centers Nv ($PLAZ) | 131.0% | -13.4% | -53.3% | 664.4% | |
| PIK Group OJSC ($PIK) | -2.1% | -16.5% | 17.5% | 191.5% | |
| London & Associated Properties ($LAS) | -22.6% | -2.6% | -9.1% | 51.4% | |
| Etalon Group Ltd ($ETLN) | 29.0% | -17.6% | 15.6% | 44.1% | |
| Formation Group ($FRM) | 35.8% | 199.3% | 23.8% | 25.8% | |
| |
|---|
| Median (20 companies) | 1.9% | 7.0% | 7.6% | 11.7% | 32.2% |
|---|
| Safeland ($SAF) | | -1.5% | 105.9% | -38.6% | -77.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Arricano Real Estate ($ARO) | 96.5% | 96.1% | 96.4% | 96.5% | |
| Summit Germany Ltd ($SMTG) | | 92.3% | 92.2% | 92.2% | |
| Caledonian Trust ($CNN) | 43.2% | | 50.4% | 80.5% | |
| Panther Securities ($PNS) | 68.0% | 73.5% | 75.2% | 70.8% | |
| Songbird Estates ($SBD) | 70.7% | 72.5% | 72.8% | 68.6% | |
| |
|---|
| Median (14 companies) | 39.3% | 46.6% | 42.8% | 33.4% | |
|---|
| Safeland ($SAF) | 20.6% | 26.9% | 33.7% | 18.9% | 10.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Summit Germany Ltd ($SMTG) | 89.3% | 75.5% | 129.4% | 241.4% | |
| Arricano Real Estate ($ARO) | -138.3% | 12.7% | 190.4% | 238.1% | |
| Caledonian Trust ($CNN) | -59.1% | | 17.4% | 191.0% | |
| Safestore Hldgs ($SAFE) | 77.7% | 128.4% | 95.1% | 84.8% | |
| Raven Russia Ltd ($RUS) | 4.7% | -52.3% | 40.4% | 75.8% | |
| |
|---|
| Median (19 companies) | 20.4% | 24.8% | 32.8% | 28.6% | 14.7% |
|---|
| Safeland ($SAF) | 7.0% | 65.8% | 28.0% | 15.2% | 94.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Panther Securities ($PNS) | 26.0% | 15.7% | 3.7% | 68.6% | |
| Taliesin Property Fund Ltd ($TPFZ) | 45.2% | 43.7% | 37.2% | 40.5% | |
| Hagl JSC ($HAG) | 145.6% | 127.1% | 55.5% | 30.0% | |
| St.Modwen Properties ($SMP) | 36.7% | 55.8% | 31.3% | 19.3% | |
| Safestore Hldgs ($SAFE) | 6.3% | 7.2% | 24.5% | 16.7% | |
| |
|---|
| Median (20 companies) | 6.3% | 5.1% | 1.5% | 1.8% | 1.5% |
|---|
| Safeland ($SAF) | 1.1% | 19.5% | 0.5% | 1.1% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Arricano Real Estate ($ARO) | -12.3% | 1.7% | 34.2% | 43.8% | |
| Damac Real Estate Development Ltd ($DMC) | 31.3% | 41.5% | 24.5% | 16.0% | |
| Summit Germany Ltd ($SMTG) | 7.1% | 5.6% | 9.2% | 15.8% | |
| Taliesin Property Fund Ltd ($TPFZ) | 0.3% | -3.0% | 15.3% | 15.1% | |
| Etalon Group Ltd ($ETLN) | 14.3% | 10.2% | 6.6% | 12.6% | |
| |
|---|
| Median (20 companies) | 3.2% | 4.9% | 6.4% | 6.8% | 7.6% |
|---|
| Safeland ($SAF) | 3.7% | 31.2% | 22.5% | 6.7% | 8.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Development Securities ($DSC) | 10.3x | 3.5x | 5.7x | 70.8x | 3.9x |
| Hagl JSC ($HAG) | 14.2x | 14.8x | 30.8x | 11.7x | |
| Songbird Estates ($SBD) | | 12.3x | 12.4x | 11.3x | |
| Farglory Land Development Co Ltd ($FLDS) | 5.7x | 4.4x | 4.8x | 8.9x | |
| Panther Securities ($PNS) | 11.8x | 9.7x | 9.4x | 8.5x | |
| |
|---|
| Median (17 companies) | 8.7x | 4.5x | 5.2x | 4.0x | 2.2x |
|---|
| Safeland ($SAF) | 10.1x | 1.2x | 1.3x | 1.2x | 3.4x |
