Coral Products reports 26.4% EBITDA decline in 2018 while 9.2% Revenue growth
27 Sep 2018 • About Coral Products (
$CRU) • By InTwits
Coral Products reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Coral Products has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.4%. At the same time it's in pair with industry average of 4.2%
- CAPEX is quite volatile: £1m in FY2018, £1m in FY2017, £2m in FY2016, £0m in FY2015, £0m in FY2014
- The company has unprofitable business model: ROIC is -0.9%
- It operates with high leverage: Net Debt/EBITDA is 5.3x while industry average is 1.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Coral Products's Revenue increased on 9.2%. During the last 5 years Revenue growth topped in FY2017 at 14.5%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.3 pp from 7.0% to 10.2% in FY2018.
Gross Margin showed almost no change in FY2018. Gross Margin followed a growing trend at 2.6 pp per annum in the last 5 years. SG&A as a % of Revenue increased on 4.5 pp from 30.9% to 35.4% in FY2018. During the last 5 years SG&A as a % of Revenue bottomed in FY2015 at 27.4% and was growing since that time.
Net Income margin decreased on 3.7 pp from 2.1% to -1.6% in FY2018. During the last 5 years Net Income margin topped in FY2016 at 4.0% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2018 Coral Products had CAPEX/Revenue of 3.9%. CAPEX/Revenue increased slightly on 1.4 pp from 2.5% in FY2015 to 3.9% in FY2018. It's average level of CAPEX/Revenue for the last three years was 5.7%. Coral Products maintained rich investment policy and has spent a big chunk of EBITDA (66.4%) to CAPEX. During FY2014-FY2018 CAPEX as a % of Revenue topped in FY2016 at 8.9% and was declining since that time.
Return on investment
The company operates at negative ROIC (-0.9%) and ROE (-2.7%). ROIC decreased on 4.4 pp from 3.6% to -0.89% in FY2018. ROE decreased on 6.1 pp from 3.3% to -2.7% in FY2018. During the last 5 years ROE topped in FY2016 at 6.5% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.3x and Debt / EBITDA is 5.7x. Net Debt / EBITDA jumped on 2.3x from 3.0x to 5.3x in FY2018. Debt surged on 23.9% while cash dropped on 30.0%. During FY2014-FY2018 Net Debt/EBITDA bottomed in FY2016 at 2.5x and was growing since that time.
Coral Products has short term refinancing risk: cash is only 7.9% of short term debt.
Financial and operational results
FY ended 30 Nov -0001
Coral Products ($CRU) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 17.222 | 17.425 | 18.714 | 21.432 | 23.405 | 9.2% |
| Gross Profit | 4.087 | 5.157 | 6.202 | 7.318 | 8.103 | 10.7% |
| SG&A | 4.851 | 4.782 | 5.264 | 6.625 | 8.289 | 25.1% |
| EBITDA | 1.178 | 1.488 | 1.325 | 1.866 | 1.374 | -26.4% |
| Net Income | -0.922 | 0.191 | 0.743 | 0.458 | -0.370 | -180.8% |
Balance Sheet
|
|---|
| Cash | 0.000 | 0.067 | 0.910 | 0.673 | 0.471 | -30.0% |
| Short Term Debt | 2.502 | 2.349 | 2.062 | 3.808 | 5.939 | 56.0% |
| Long Term Debt | 1.466 | 1.704 | 2.122 | 2.475 | 1.843 | -25.5% |
Cash flow
|
|---|
| Capex | 0.375 | 0.440 | 1.668 | 0.919 | 0.912 | -0.8% |
Ratios
|
|---|
| Revenue growth | -0.3% | 1.2% | 7.4% | 14.5% | 9.2% | |
| EBITDA growth | -12.8% | 26.3% | -11.0% | 40.8% | -26.4% | |
|
|---|
| Gross Margin | 23.7% | 29.6% | 33.1% | 34.1% | 34.6% | 0.5% |
| EBITDA Margin | 6.8% | 8.5% | 7.1% | 8.7% | 5.9% | -2.8% |
| SG&A, % of revenue | 28.2% | 27.4% | 28.1% | 30.9% | 35.4% | 4.5% |
| Net Income Margin | -5.4% | 1.1% | 4.0% | 2.1% | -1.6% | -3.7% |
| CAPEX, % of revenue | 2.2% | 2.5% | 8.9% | 4.3% | 3.9% | -0.4% |
|
|---|
| ROIC | 2.6% | 6.7% | 3.2% | 3.6% | -0.9% | -4.4% |
| ROE | -11.6% | 2.3% | 6.5% | 3.3% | -2.7% | -6.1% |
| Net Debt/EBITDA | 3.4x | 2.7x | 2.5x | 3.0x | 5.3x | 2.3x |
Peers in General Industrials
Below you can find Coral Products benchmarking vs. other companies in General Industrials 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 |
|---|
| Macfarlane Group ($MACF) | 6.9% | 10.0% | 6.3% | 9.0% | |
| Robinson ($RBN) | | 3.8% | -5.8% | 8.6% | |
| Jardine Strategic Hldgs ($88EI) | -1.3% | -8.8% | 0.5% | 6.8% | |
| Press Corp ($PESD) | 20.3% | 17.8% | 17.2% | 6.2% | |
| Thyssenkrupp Ag ($0O1C) | 6.9% | 3.8% | -8.2% | 5.6% | |
| |
|---|
| Median (9 companies) | 5.0% | 1.0% | 0.6% | 5.6% | |
|---|
| Coral Products ($CRU) | | 1.2% | 7.4% | 14.5% | 9.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Press Corp ($PESD) | 56.0% | 54.5% | 59.6% | 59.1% | |
| Honeywell International Inc ($HON) | 28.2% | 30.7% | 30.9% | 32.0% | |
| Macfarlane Group ($MACF) | 30.9% | 31.5% | 31.0% | 30.8% | |
| Smurfit Kappa Group ($SKG) | 29.5% | 30.0% | 30.3% | 29.8% | |
| Jardine Strategic Hldgs ($88EI) | 25.4% | 25.5% | 25.8% | 25.7% | |
| |
|---|
| Median (9 companies) | 25.4% | 25.5% | 25.8% | 25.7% | |
|---|
| Coral Products ($CRU) | 23.7% | 29.6% | 33.1% | 34.1% | 34.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Press Corp ($PESD) | 29.2% | 25.3% | 27.7% | 35.2% | |
| Jardine Strategic Hldgs ($88EI) | 13.5% | 15.1% | 21.4% | 27.4% | |
| Honeywell International Inc ($HON) | 16.8% | 20.0% | 19.6% | 20.4% | |
| Smurfit Kappa Group ($SKG) | 12.7% | 14.3% | 14.9% | 14.0% | |
| Barloworld ($BWO) | 10.0% | 10.3% | 10.7% | 11.0% | |
| |
|---|
| Median (9 companies) | 13.3% | 10.4% | 14.3% | 11.0% | |
|---|
| Coral Products ($CRU) | 6.8% | 8.5% | 7.1% | 8.7% | 5.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Press Corp ($PESD) | 12.1% | 9.0% | 8.8% | 11.3% | |
| Robinson ($RBN) | 3.5% | 3.7% | 6.5% | 8.8% | |
| General Electric Co. ($GEC) | 6.1% | 6.3% | 6.0% | 6.1% | |
| Smurfit Kappa Group ($SKG) | 5.3% | 5.3% | 5.2% | 5.2% | |
| Jardine Strategic Hldgs ($88EI) | 4.1% | 2.9% | 3.1% | 3.3% | |
| |
|---|
| Median (9 companies) | 3.5% | 2.9% | 3.1% | 3.3% | |
|---|
| Coral Products ($CRU) | 2.2% | 2.5% | 8.9% | 4.3% | 3.9% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Honeywell International Inc ($HON) | 21.3% | 23.2% | 19.6% | 19.0% | |
| Macfarlane Group ($MACF) | 19.0% | 17.8% | 16.9% | 15.4% | |
| Smurfit Kappa Group ($SKG) | 11.8% | 13.9% | 14.1% | 13.4% | |
| Barloworld ($BWO) | 14.1% | 12.9% | 12.7% | 13.2% | |
| Thyssenkrupp Ag ($0O1C) | 10.8% | 9.5% | 12.7% | 12.2% | |
| |
|---|
| Median (9 companies) | 11.8% | 12.9% | 12.7% | 12.7% | |
|---|
| Coral Products ($CRU) | 2.6% | 6.7% | 3.2% | 3.6% | -0.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Smurfit Kappa Group ($SKG) | 2.7x | 2.6x | 2.4x | 2.4x | |
| Robinson ($RBN) | 1.0x | 0.9x | 1.2x | 2.2x | |
| Honeywell International Inc ($HON) | 0.3x | 0.9x | 1.0x | 1.3x | |
| Thyssenkrupp Ag ($0O1C) | 2.0x | 1.8x | 1.8x | 1.3x | |
| Macfarlane Group ($MACF) | 1.3x | 1.3x | 1.4x | 1.1x | |
| |
|---|
| Median (8 companies) | 1.3x | 1.3x | 1.2x | 1.2x | |
|---|
| Coral Products ($CRU) | 3.4x | 2.7x | 2.5x | 3.0x | 5.3x |
