Impax Asset Management Group reports 174% EBITDA growth in 2018 and 7.1 pp EBITDA Margin growth from 19.6% to 26.7%
06 Dec 2018 • About Impax Asset Management Group (
$IPX) • By InTwits
Impax Asset Management Group reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Impax Asset Management Group is a fast growth stock: FY2018 revenue growth was 101%, 5 year revenue CAGR was 28.9% at FY2018 ROIC 30.7%
- Impax Asset Management Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%. At the same time it's a lot of higher than industry average of 8.5%.
- CAPEX is quite volatile: £2m in FY2018, £0m in FY2017, £0m in FY2016, £0m in FY2015, £0m in FY2014
- The company has highly profitable business model: ROIC is 30.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Impax Asset Management Group's Revenue surged on 101%. Revenue decline was slowing down on average by 24.0 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 11.9 pp from -3.7% to 8.2% in FY2018. During FY2014-FY2018 EBITDA Margin bottomed in FY2017 at 19.6%.
Net Income margin decreased on 6.1 pp from 23.5% to 17.4% in FY2018. During FY2014-FY2018 Net Income margin topped in FY2017 at 23.5%. The efficient tax rate was 22.0% in FY2018.
Investments (CAPEX, working capital and M&A)
Impax Asset Management Group's CAPEX/Revenue was 2.6% in FY2018. Impax Asset Management Group showed small growth in CAPEX/Revenue of 1.8 pp from 0.79% in FY2015 to 2.6% in FY2018. It's average CAPEX/Revenue for the last three years was 1.4%. CAPEX as a % of Revenue followed a growing trend at 0.52 pp per annum in the last 5 years.
Return on investment
The company operates at high and attractive ROIC (30.7%) and ROE (25.8%). ROIC surged on 11.0 pp from 19.7% to 30.7% in FY2018. ROE increased slightly on 1.3 pp from 24.6% to 25.8% in FY2018. During the last 5 years ROIC bottomed in FY2016 at 15.0% and was growing since that time. ROE stuck to a growing trend at 3.5 pp per annum in FY2014-FY2018.
Leverage (Debt)
Debt level is -0.3x Net Debt / EBITDA and 0.6x Debt / EBITDA. Debt surged while cash surged on 20.1%.
Impax Asset Management Group has no short term refinancing risk: cash is higher than short term debt (466.9%).
Valuation and dividends
The company's trades at EV/EBITDA 14.9x and P/E 23.4x.
The company paid 61.4% of Net Income as dividends in FY2018.
Management team
At the end of financial year the company had 16.3% shares owned by insiders.
At the end of financial year the company had 137 employees. Average revenue per employee in FY2018 was £479,438.
Financial and operational results
FY ended 30 Sep 2018
Impax Asset Management Group ($IPX) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 20.359 | 19.726 | 21.067 | 32.694 | 65.683 | 100.9% |
| EBITDA | 5.107 | 4.668 | 4.377 | 6.400 | 17.534 | 174.0% |
| EBIT | | | | | 15.483 | |
| Tax | | | | | 3.219 | |
| Net Income | 3.256 | 3.633 | 4.177 | 7.667 | 11.401 | 48.7% |
| Stock Based Compensation | | | | | 1.822 | |
Balance Sheet
|
|---|
| Cash | 6.634 | 2.364 | 2.804 | 12.932 | 15.529 | 20.1% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 3.326 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 6.652 | |
Cash flow
|
|---|
| Capex | 0.033 | 0.156 | 0.109 | 0.367 | 1.690 | 360.5% |
| Dividends | | | | | 7.000 | |
Ratios
|
|---|
| Revenue growth | 10.3% | -3.1% | 6.8% | 55.2% | 100.9% | |
| EBITDA growth | 13.2% | -8.6% | -6.2% | 46.2% | 174.0% | |
|
|---|
| EBITDA Margin | 25.1% | 23.7% | 20.8% | 19.6% | 26.7% | 7.1% |
| EBIT Margin | | | | | 23.6% |
| SBC, % of revenue | | | | | 2.8% |
| Net Income Margin | 16.0% | 18.4% | 19.8% | 23.5% | 17.4% | -6.1% |
| CAPEX, % of revenue | 0.2% | 0.8% | 0.5% | 1.1% | 2.6% | 1.5% |
|
|---|
| ROIC | 18.7% | 16.1% | 15.0% | 19.7% | 30.7% | 11.0% |
| ROE | 13.6% | 14.3% | 15.9% | 24.6% | 25.8% | 1.3% |
| Net Debt/EBITDA | -1.3x | -0.5x | -0.6x | -2.0x | -0.3x | 1.7x |
People
|
|---|
| Insider ownership | | | | | 16.3% | |
| Employees | | | | | 137 | |
| Revenue/Employee, th. £ | | | | | 479 | |
Peers in Financial Services
Below you can find Impax Asset Management 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 ($ARDN) | -21.3% | -31.0% | 6.8% | 78.9% | |
| Afh Financial Group ($AFHP) | 39.3% | 39.5% | 15.0% | 39.4% | |
| S & U ($46IE) | | -40.6% | 25.2% | 33.9% | 31.8% |
| |
|---|
| Median (33 companies) | 0.3% | 2.9% | 5.0% | 12.3% | 11.8% |
|---|
| Impax Asset Management Group ($IPX) | | -3.1% | 6.8% | 55.2% | 100.9% |
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 ($WCW) | 68.2% | 66.7% | 67.7% | 69.8% | 67.2% |
| |
|---|
| Median (14 companies) | 51.3% | 52.5% | 59.3% | 51.4% | 53.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Real Estate Credit Investments Pcc ($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) | 14.4% | 16.9% | 17.2% | 22.8% | 20.7% |
|---|
| Impax Asset Management Group ($IPX) | 25.1% | 23.7% | 20.8% | 19.6% | 26.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Daishin Securities Co ($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% | |
| Leeds Group ($LDSG) | 0.6% | 0.9% | 11.5% | 5.6% | 1.0% |
| Record ($REC) | 0.1% | 0.6% | 0.1% | 3.8% | 1.0% |
| |
|---|
| Median (30 companies) | 0.8% | 1.0% | 1.0% | 1.0% | 1.0% |
|---|
| Impax Asset Management Group ($IPX) | 0.2% | 0.8% | 0.5% | 1.1% | 2.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Plus500 Ltd ($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 (35 companies) | 7.6% | 7.6% | 7.5% | 8.5% | 5.8% |
|---|
| Impax Asset Management Group ($IPX) | 18.7% | 16.1% | 15.0% | 19.7% | 30.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Daishin Securities Co ($DSS) | 10.7x | 8.0x | 13.4x | 12.7x | |
| First Property Group ($FPO) | 5.6x | 12.3x | 9.4x | 7.6x | 7.7x |
| Leeds Group ($LDSG) | -0.5x | -0.3x | 1.4x | 2.6x | 2.5x |
| 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 | |
| |
|---|
| Median (26 companies) | -2.3x | -1.2x | -1.4x | -1.3x | -0.9x |
|---|
| Impax Asset Management Group ($IPX) | -1.3x | -0.5x | -0.6x | -2.0x | -0.3x |
