Nexus Infrastructure Plc Net Income surged on 25.1% and EBITDA Margin showed almost no change
10 Dec 2018 • About Nexus Infrastructure Plc (
$NEXS) • By InTwits
Nexus Infrastructure Plc reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 8.0% in FY2018 vs. 7.9% in FY2017 vs. 6.8% in FY2014
- Nexus Infrastructure Plc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's a lot of higher than industry average of 1.1%.
- CAPEX is quite volatile: £1m in FY2018, £4m in FY2017, £1m in FY2016, £1m in FY2015, £2m in FY2014
- The company has highly profitable business model: ROIC is 30.9%
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 showed almost no change in FY2018. Revenue decline was accelerating on average at -8.4 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.
Gross Margin showed almost no change in FY2018. Gross Margin followed a growing trend at 1.4 pp per annum in the last 5 years. SG&A as a % of Revenue showed almost no change in FY2018. SG&A as a % of Revenue stuck to a growing trend at 1.1 pp per annum in the last 5 years.
Net Income margin increased slightly on 1.1 pp from 4.3% to 5.4% in FY2018. The efficient tax rate was 20.8% in FY2018.
Investments (CAPEX, working capital and M&A)
Nexus Infrastructure Plc's CAPEX/Revenue was 0.60% in FY2018. The company showed almost no change in CAPEX/Revenue from FY2015 to FY2018. Average CAPEX/Revenue for the last three years was 1.5%.
Return on investment
The company operates at high and attractive ROIC (30.9%) and ROE (37.6%). ROIC decreased slightly on 1.7 pp from 32.5% to 30.9% in FY2018. ROE decreased slightly on 0.79 pp from 38.4% to 37.6% in FY2018.
Leverage (Debt)
Debt level is -1.8x Net Debt / EBITDA and 0.6x Debt / EBITDA. Debt dropped on 27.8% while cash decreased on 2.4%.
Nexus Infrastructure Plc has good short term financial stability: Interest coverage ratio (ICR) is 20.4x. Nexus Infrastructure Plc has no short term refinancing risk: cash is higher than short term debt (1,087.0%).
Average interest expence paid by the company was 6.6% in FY2018.
Valuation and dividends
The company's trades at EV/EBITDA 5.0x and P/E 10.1x.
The company paid 27.4% of Net Income as dividends in FY2018.
Management team
26.6% of the company is owned by insiders.
At the end of financial year the company had 886 employees. Average revenue per employee in FY2018 was £152,300.
Financial and operational results
FY ended 30 Sep 2018
Nexus Infrastructure Plc ($NEXS) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 108.4 | 130.9 | 135.7 | 135.0 | 134.9 | -0.1% |
| Gross Profit | 17.2 | 20.6 | 26.3 | 27.2 | 27.6 | 1.5% |
| SG&A | 10.9 | 12.5 | 15.9 | 17.9 | 18.2 | 1.7% |
| EBITDA | 7.3 | 9.3 | 11.6 | 10.7 | 10.8 | 0.3% |
| EBIT | | | | | 9.4 | |
| Interest expence | | | | | 0.5 | |
| Tax | | | | | 1.9 | |
| Net Income | 5.0 | 6.3 | 8.4 | 5.8 | 7.3 | 25.1% |
| Stock Based Compensation | | | | | -0.1 | |
Balance Sheet
|
|---|
| Cash | 20.5 | 27.7 | 34.0 | 27.1 | 26.4 | -2.4% |
| Inventory | | | | | 3.3 | |
| Short Term Debt | 2.0 | 1.0 | 2.6 | 2.7 | 2.4 | -8.5% |
| Long Term Debt | 0.7 | 0.2 | 8.8 | 7.0 | 4.6 | -35.1% |
Cash flow
|
|---|
| Capex | 2.3 | 0.6 | 1.1 | 4.1 | 0.8 | -79.9% |
| Dividends | | | | | 2.0 | |
Ratios
|
|---|
| Revenue growth | 31.1% | 20.8% | 3.7% | -0.5% | -0.1% | |
| EBITDA growth | 44.4% | 27.0% | 25.2% | -7.8% | 0.3% | |
|
|---|
| Gross Margin | 15.9% | 15.8% | 19.4% | 20.2% | 20.5% | 0.3% |
| EBITDA Margin | 6.8% | 7.1% | 8.6% | 7.9% | 8.0% | 0.0% |
| EBIT Margin | | | | | 7.0% |
| SG&A, % of revenue | 10.0% | 9.6% | 11.7% | 13.3% | 13.5% | 0.2% |
| SBC, % of revenue | | | | | -0.0% |
| Net Income Margin | 4.6% | 4.8% | 6.2% | 4.3% | 5.4% | 1.1% |
| CAPEX, % of revenue | 2.1% | 0.4% | 0.8% | 3.0% | 0.6% | -2.4% |
|
|---|
| ROIC | | 49.5% | 45.3% | 32.5% | 30.9% | -1.7% |
| ROE | 46.5% | 44.5% | 56.7% | 38.4% | 37.6% | -0.8% |
| Net Debt/EBITDA | -2.4x | -2.9x | -1.9x | -1.6x | -1.8x | -0.2x |
| Interest expence / Average debt | | | | | 6.6% | |
People
|
|---|
| Insider ownership | | | | | 26.6% | |
| Employees | | | | | 886 | |
| Revenue/Employee, th. £ | | | | | 152 | |
Peers in Construction & Engineering
Below you can find Nexus Infrastructure Plc benchmarking vs. other companies in Construction & Engineering 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Larsen & Toubro ($LTOD) | | 6.0% | 11.7% | 7.6% | 9.5% |
| Electrosteel Castings ($ECS) | | 1.5% | -8.2% | -5.7% | 3.6% |
| Hindustan Construction Co ($HIN) | | 7.9% | -17.5% | 15.5% | 2.7% |
| |
|---|
| Median (3 companies) | | 6.0% | -8.2% | 7.6% | 3.6% |
|---|
| Nexus Infrastructure Plc ($NEXS) | | 20.8% | 3.7% | -0.5% | -0.1% |
Top companies by EBITDA margin, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Larsen & Toubro ($LTOD) | 13.1% | 12.8% | 10.5% | 10.3% | 16.6% |
| Electrosteel Castings ($ECS) | 15.0% | 12.8% | 12.3% | 13.9% | 11.9% |
| Hindustan Construction Co ($HIN) | 8.9% | 12.0% | 13.5% | 7.9% | 7.7% |
| |
|---|
| Median (3 companies) | 13.1% | 12.8% | 12.3% | 10.3% | 11.9% |
|---|
| Nexus Infrastructure Plc ($NEXS) | 6.8% | 7.1% | 8.6% | 7.9% | 8.0% |
Top companies by CAPEX/Revenue, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Larsen & Toubro ($LTOD) | 8.2% | 7.0% | 4.3% | 2.8% | 2.4% |
| Electrosteel Castings ($ECS) | 6.9% | 5.8% | 1.7% | 1.5% | 1.4% |
| Hindustan Construction Co ($HIN) | 13.4% | 9.2% | 1.1% | 2.5% | 0.0% |
| |
|---|
| Median (3 companies) | 8.2% | 7.0% | 1.7% | 2.5% | 1.4% |
|---|
| Nexus Infrastructure Plc ($NEXS) | 2.1% | 0.4% | 0.8% | 3.0% | 0.6% |
Top companies by ROIC, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hindustan Construction Co ($HIN) | 4.8% | 7.4% | 8.9% | 8.2% | 11.7% |
| Larsen & Toubro ($LTOD) | 8.6% | 6.8% | 6.3% | 6.1% | 11.0% |
| Electrosteel Castings ($ECS) | 6.3% | 5.0% | 4.6% | 4.6% | 4.5% |
| |
|---|
| Median (3 companies) | 6.3% | 6.8% | 6.3% | 6.1% | 11.0% |
|---|
| Nexus Infrastructure Plc ($NEXS) | | 49.5% | 45.3% | 32.5% | 30.9% |
Top companies by Net Debt / EBITDA
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Larsen & Toubro ($LTOD) | 6.9x | 7.4x | 7.9x | 8.0x | 5.1x |
| Hindustan Construction Co ($HIN) | 12.3x | 9.3x | 6.4x | 8.5x | 4.9x |
| Electrosteel Castings ($ECS) | 6.9x | 8.0x | 6.9x | 5.2x | 4.6x |
| |
|---|
| Median (3 companies) | 6.9x | 8.0x | 6.9x | 8.0x | 4.9x |
|---|
| Nexus Infrastructure Plc ($NEXS) | -2.4x | -2.9x | -1.9x | -1.6x | -1.8x |
