Smart(J.)& Co(Contractors) revenue dropped on 53.4% while EBITDA Margin jumped on 28.2 pp from 18.6% to 46.8%
25 Oct 2018 • About Smart(J.)& Co(Contractors) (
$SMJ) • By InTwits
Smart(J.)& Co(Contractors) reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Smart(J.)& Co(Contractors) is a company in decline: FY2018 revenue growth was -53.4%, 5 years revenue CAGR was -10.3%
- EBITDA Margin is expanding: 46.8% in FY2018 vs. 18.6% in FY2017 vs. -2.0% in FY2014
- EBITDA Margin is quite volatile: 46.8% in FY2018, 18.6% in FY2017, 13.7% in FY2016, 12.3% in FY2015, -2.0% in FY2014
- Smart(J.)& Co(Contractors) has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's in pair with industry average of 4.1%
- CAPEX is quite volatile: £0m in FY2018, £1m in FY2017, £0m in FY2016, £0m in FY2015, £0m in FY2014
- The company has potentially unprofitable business model: ROIC is 4.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Smart(J.)& Co(Contractors)'s Revenue dropped on 53.4%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 28.2 pp from 18.6% to 46.8% in FY2018. EBITDA Margin grew at 10.4 pp per annum in FY2014-FY2018.
Gross Margin increased on 8.7 pp from 15.1% to 23.8% in FY2018. Gross Margin stuck to a growing trend at 4.7 pp per annum in FY2014-FY2018.
Net Income margin jumped on 29.2 pp from 16.3% to 45.5% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 4.3%. Smart(J.)& Co(Contractors) showed small growth in CAPEX/Revenue of 1.9 pp from 2.3% in FY2015 to 4.3% in FY2018. It's average CAPEX/Revenue for the last three years was 2.7%. During FY2014-FY2018 CAPEX as a % of Revenue bottomed in FY2016 at 1.7% and was growing since that time.
Return on investment
The company operates at low ROIC (4.2%) and ROE (5.1%). ROIC increased slightly on 0.54 pp from 3.7% to 4.2% in FY2018. ROE increased slightly on 1.0 pp from 4.1% to 5.1% in FY2018. ROIC grew at 1.2 pp per annum in FY2014-FY2018. ROE followed a growing trend at 0.86 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is -2.4x Net Debt / EBITDA and 2.4x Debt / EBITDA. Debt jumped on 34.9% while cash dropped on 11.1%.
Smart(J.)& Co(Contractors) has no short term refinancing risk: cash is higher than short term debt (198.9%).
Financial and operational results
FY ended 31 Jul 2018
Smart(J.)& Co(Contractors) ($SMJ) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 22.811 | 20.819 | 29.027 | 22.860 | 10.655 | -53.4% |
| Gross Profit | 0.290 | 2.758 | 3.767 | 3.454 | 2.537 | -26.5% |
| EBITDA | -0.445 | 2.563 | 3.979 | 4.253 | 4.990 | 17.3% |
| Net Income | 1.025 | 2.998 | 3.488 | 3.727 | 4.851 | 30.2% |
Balance Sheet
|
|---|
| Cash | 16.802 | 26.047 | 26.785 | 26.524 | 23.586 | -11.1% |
| Short Term Debt | 8.732 | 12.724 | 12.628 | 8.791 | 11.858 | 34.9% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.582 | 0.483 | 0.488 | 0.487 | 0.454 | -6.8% |
Ratios
|
|---|
| Revenue growth | 24.1% | -8.7% | 39.4% | -21.2% | -53.4% | |
| EBITDA growth | -74.6% | -676.0% | 55.2% | 6.9% | 17.3% | |
|
|---|
| Gross Margin | 1.3% | 13.2% | 13.0% | 15.1% | 23.8% | 8.7% |
| EBITDA Margin | -2.0% | 12.3% | 13.7% | 18.6% | 46.8% | 28.2% |
| Net Income Margin | 4.5% | 14.4% | 12.0% | 16.3% | 45.5% | 29.2% |
| CAPEX, % of revenue | 2.6% | 2.3% | 1.7% | 2.1% | 4.3% | 2.1% |
|
|---|
| ROIC | -0.9% | 2.1% | 3.4% | 3.7% | 4.2% | 0.5% |
| ROE | 1.1% | 3.4% | 3.9% | 4.1% | 5.1% | 1.0% |
| Net Debt/EBITDA | | -5.2x | -3.6x | -4.2x | -2.4x | 1.8x |
Peers in Construction & Materials
Below we provide Smart(J.)& Co(Contractors) 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 ($STCM) | -8.9% | -19.7% | -44.0% | 25.5% | |
| |
|---|
| Median (23 companies) | 10.3% | 1.7% | 5.3% | 11.6% | 7.8% |
|---|
| Smart(J.)& Co(Contractors) ($SMJ) | | -8.7% | 39.4% | -21.2% | -53.4% |
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 ($MBH) | 31.1% | 38.2% | 34.4% | 35.4% | |
| |
|---|
| Median (22 companies) | 26.7% | 29.3% | 30.0% | 27.6% | 30.6% |
|---|
| Smart(J.)& Co(Contractors) ($SMJ) | 1.3% | 13.2% | 13.0% | 15.1% | 23.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lucky Cement Ltd ($LKCS) | 24.4% | 26.5% | 30.4% | 29.7% | 22.4% |
| James Halstead ($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% | |
| LSR Group OJSC ($LSRG) | 22.9% | 19.3% | 16.0% | 18.2% | |
| |
|---|
| Median (23 companies) | 9.6% | 9.5% | 9.8% | 9.0% | 10.0% |
|---|
| Smart(J.)& Co(Contractors) ($SMJ) | -2.0% | 12.3% | 13.7% | 18.6% | 46.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inch Kenneth Kajang Rubber ($IKK) | 12.8% | 54.9% | 313.4% | 40.8% | |
| Lucky Cement Ltd ($LKCS) | 6.9% | 12.0% | 9.0% | 13.0% | 20.3% |
| 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 ($HSM) | 2.0% | 2.0% | 3.1% | 4.9% | 1.5% |
| |
|---|
| Median (23 companies) | 2.4% | 2.2% | 3.0% | 2.3% | 3.1% |
|---|
| Smart(J.)& Co(Contractors) ($SMJ) | 2.6% | 2.3% | 1.7% | 2.1% | 4.3% |
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% | 23.1% |
| 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 ($YOLO) | -49.9% | -26.1% | -51.5% | 24.2% | |
| |
|---|
| Median (25 companies) | 5.4% | 7.8% | 9.1% | 8.8% | 23.1% |
|---|
| Smart(J.)& Co(Contractors) ($SMJ) | -0.9% | 2.1% | 3.4% | 3.7% | 4.2% |
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 ($LSRG) | 0.1x | 0.7x | 1.8x | 1.7x | |
| |
|---|
| Median (20 companies) | 0.5x | -0.0x | -0.7x | -0.4x | -0.7x |
|---|
| Smart(J.)& Co(Contractors) ($SMJ) | | -5.2x | -3.6x | -4.2x | -2.4x |
