Haynes Publishing Group EBITDA jumped on 19.4% and Revenue surged on 13.5%

05 Sep 2018 • About Haynes Publishing Group ($HYNS) • By InTwits

Haynes Publishing Group reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:

• Haynes Publishing Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's in pair with industry average of 3.3%
• CAPEX is quite volatile: £0m in FY2018, £0m in FY2017, £0m in FY2016, £0m in FY2015, £1m in FY2014
• The company has highly profitable business model: ROIC is 18.2%

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 13.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 12.0 pp from 5.8% to 17.8% in FY2018. During the last 5 years EBITDA Margin bottomed in FY2016 at 15.4% and was growing since that time.

Gross Margin increased on 3.2 pp from 56.4% to 59.6% in FY2018. SG&A as a % of Revenue increased on 9.4 pp from 45.7% to 55.0% 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 1.5%. The company's CAPEX/Revenue showed almost no change from FY2015 to FY2018. It's average level of CAPEX/Revenue for the last three years was 1.3%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2016 at 1.0% and was growing since that time.

Return on investment

The company operates at good ROIC (18.2%) while ROE is low (6.5%). ROIC increased on 3.6 pp from 14.5% to 18.2% in FY2018. ROE showed almost no change in FY2018. During the last 5 years ROIC bottomed in FY2016 at -8.0% and was growing since that time. During FY2014-FY2018 ROE bottomed in FY2015 at -19.2% and was growing since that time.

Leverage (Debt)

Company's Net Debt / EBITDA is -0.2x and Debt / EBITDA is 0.2x. Debt dropped on 31.7% while cash dropped on 31.7%.

Haynes Publishing Group has no short term refinancing risk: cash is higher than short term debt (211.3%).

Financial and operational results

FY ended 30 Nov -0001

Haynes Publishing Group ($HYNS) key annual financial indicators

mln. £	2014	2015	2016	2017	2018	2018/2017
P&L
Revenue	29.284	26.065	25.710	29.774	33.788	13.5%
Gross Profit	15.501	15.685	13.793	16.798	20.147	19.9%
SG&A	12.940	22.451	15.841	13.592	18.590	36.8%
EBITDA	11.359	8.724	3.959	10.426	12.445	19.4%
Net Income	1.118	-5.920	-1.779	1.374	1.494	8.7%
Balance Sheet
Cash	2.348	2.968	2.548	7.036	4.809	-31.7%
Short Term Debt	1.234	2.827	2.163	3.331	2.276	-31.7%
Long Term Debt	2.178	0.000	0.000	0.000	0.000
Cash flow
Capex	0.718	0.412	0.264	0.415	0.499	20.2%
Ratios
Revenue growth	6.0%	-11.0%	-1.4%	15.8%	13.5%
EBITDA growth	75.4%	-23.2%	-54.6%	163.3%	19.4%
Gross Margin	52.9%	60.2%	53.6%	56.4%	59.6%	3.2%
EBITDA Margin	38.8%	33.5%	15.4%	35.0%	36.8%	1.8%
SG&A, % of revenue	44.2%	86.1%	61.6%	45.7%	55.0%	9.4%
Net Income Margin	3.8%	-22.7%	-6.9%	4.6%	4.4%	-0.2%
CAPEX, % of revenue	2.5%	1.6%	1.0%	1.4%	1.5%	0.1%
ROIC	12.5%	9.4%	-8.0%	14.5%	18.2%	3.6%
ROE	3.0%	-19.2%	-7.0%	6.0%	6.5%	0.4%
Net Debt/EBITDA	0.1x	-0.0x	-0.1x	-0.4x	-0.2x	0.2x

Peers in Media

Below we provide Haynes Publishing Group benchmarking against other companies in Media 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
Marimedia Ltd ($MARI)	45.7%	20.1%	66.0%	67.6%
Future ($FUTR)	-20.1%	-9.4%	-1.3%	43.1%
Grupo Clarin Sa ($GCLA)	39.8%	-57.9%	37.2%	24.4%
Jaywing ($JWNG)		26.6%	6.5%	23.8%	6.7%
Tla Worldwide ($TLA)	6.3%	130.0%	10.6%	23.4%
Median (24 companies)	1.2%	1.7%	4.0%	2.7%	8.0%
Haynes Publishing Group ($HYNS)		-11.0%	-1.4%	15.8%	13.5%

Top companies by Gross margin, %

Top 5	FY2014	FY2015	FY2016	FY2017	FY2018
Porta Communications ($PTCM)	83.4%	79.0%	80.1%	84.9%
Jaywing ($JWNG)	81.0%	89.0%	88.4%	80.8%	77.2%
Tla Worldwide ($TLA)	99.9%	78.8%	75.5%	68.1%
Spaceandpeople ($SAL)	62.2%	58.8%	57.2%	66.1%
Reed Elsevier ($REL)	65.3%	64.3%	63.9%	64.2%
Median (22 companies)	43.7%	41.2%	38.5%	39.5%	40.7%
Haynes Publishing Group ($HYNS)	52.9%	60.2%	53.6%	56.4%	59.6%

Top companies by EBITDA margin, %

Top 5	FY2014	FY2015	FY2016	FY2017	FY2018
Reed Elsevier ($REL)	32.7%	32.7%	33.9%	34.4%
Nahl Group ($NAH)	28.8%	29.5%	34.9%	27.4%
Uls Technology ($ULS)	16.7%	21.1%	19.8%	21.2%	13.8%
Spaceandpeople ($SAL)	10.5%	11.2%	1.6%	17.2%
Dods(Group ($DODS)	10.7%	0.6%	12.3%	15.9%	12.3%
Median (24 companies)	12.9%	11.2%	7.0%	6.0%	8.8%
Haynes Publishing Group ($HYNS)	38.8%	33.5%	15.4%	35.0%	36.8%

Top companies by CAPEX/Revenue, %

Top 5	FY2014	FY2015	FY2016	FY2017	FY2018
Trader Media East ($TME)	3.8%	2.3%		47.5%
Dods(Group ($DODS)	0.6%	0.4%	0.6%	12.7%	1.3%
Grupo Clarin Sa ($GCLA)	12.8%	1.6%	2.7%	2.7%
Naspers ($NPSN)		4.0%	3.1%	2.5%	2.0%
Ite Group ($ITE)	1.7%	1.3%	1.8%	2.1%
Median (24 companies)	1.5%	1.1%	0.7%	0.8%	1.3%
Haynes Publishing Group ($HYNS)	2.5%	1.6%	1.0%	1.4%	1.5%

Top companies by ROIC, %

Top 5	FY2014	FY2015	FY2016	FY2017	FY2018
Uls Technology ($ULS)	44.1%	39.6%	39.3%	31.3%	19.1%
Independent News & Media ($INM)	29.6%	65.1%	118.5%	24.4%
Marimedia Ltd ($MARI)	39.0%	6.4%	39.6%	23.9%
Reed Elsevier ($REL)	21.0%	21.4%	21.4%	21.4%
Nahl Group ($NAH)	31.5%	26.0%	23.0%	17.3%
Median (26 companies)	7.8%	6.7%	2.6%	-0.2%	4.5%
Haynes Publishing Group ($HYNS)	12.5%	9.4%	-8.0%	14.5%	18.2%

Top companies by Net Debt / EBITDA

Top 5	FY2014	FY2015	FY2016	FY2017	FY2018
Ite Group ($ITE)	0.3x	1.4x	6.3x	7.3x
Porta Communications ($PTCM)	3.4x	2.7x		5.0x
Quarto Group Inc ($QRT)	1.4x	1.1x	1.8x	3.9x
Reed Elsevier ($REL)	1.9x	1.9x	2.2x	2.0x
Future ($FUTR)		1.6x		1.9x
Median (17 companies)	1.0x	1.2x	0.4x	0.7x	-2.4x
Haynes Publishing Group ($HYNS)	0.1x	-0.0x	-0.1x	-0.4x	-0.2x

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