Driver Group reports 26.0% EBITDA growth in 2018 and 4.0% Revenue growth
11 Dec 2018 • About Driver Group (
$DRV) • By InTwits
Driver Group reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 5.5% in FY2018, 4.5% in FY2017, -4.9% in FY2016, 2.2% in FY2015, 8.7% in FY2014
- Driver Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has highly profitable business model: ROIC is 13.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Driver Group's Revenue increased on 4.0%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.95 pp from 4.5% to 5.5% in FY2018. During FY2014-FY2018 EBITDA Margin bottomed in FY2016 at -4.9% and was growing since that time.
Gross Margin increased slightly on 1.4 pp from 24.6% to 26.0% in FY2018. During the last 5 years Gross Margin bottomed in FY2016 at 20.7% and was growing since that time. SG&A as a % of Revenue decreased slightly on 0.76 pp from 22.4% to 21.6% in FY2018.
Net Income margin increased on 3.0 pp from 0.48% to 3.5% in FY2018. During the last 5 years Net Income margin bottomed in FY2016 at -10.0% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.56% in FY2018. CAPEX/Revenue decreased slightly on 0.55 pp from 1.1% in FY2015 to 0.56% in FY2018. For the last three years the average CAPEX/Revenue was 0.80%.
Return on investment
The company operates at good ROIC (13.2%) and ROE (12.2%). ROIC increased on 5.6 pp from 7.6% to 13.2% in FY2018. ROE increased on 9.7 pp from 2.5% to 12.2% in FY2018. During FY2014-FY2018 ROIC bottomed in FY2016 at -19.2% and was growing since that time. During the last 5 years ROE bottomed in FY2016 at -53.3% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.0x and Debt / EBITDA is 0.9x. Debt dropped on 32.6% while cash surged on 103%.
Driver Group has no short term refinancing risk: cash is higher than short term debt (1,549.1%).
Valuation and dividends
Driver Group's trades at EV/EBITDA 9.8x and P/E 18.7x.
Financial and operational results
FY ended 30 Sep 2018
Driver Group ($DRV) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 39.078 | 47.950 | 52.385 | 60.227 | 62.615 | 4.0% |
| Gross Profit | 9.742 | 10.570 | 10.838 | 14.836 | 16.277 | 9.7% |
| SG&A | | 12.508 | 14.318 | 13.485 | 13.546 | 0.5% |
| EBITDA | 3.409 | 1.067 | -2.557 | 2.716 | 3.421 | 26.0% |
| Net Income | 2.293 | -1.959 | -5.230 | 0.291 | 2.169 | 645.4% |
Balance Sheet
|
|---|
| Cash | 1.430 | 1.111 | 0.555 | 4.932 | 10.007 | 102.9% |
| Short Term Debt | 0.338 | 0.479 | 3.352 | 0.527 | 0.646 | 22.6% |
| Long Term Debt | 1.259 | 3.100 | 7.110 | 4.083 | 2.460 | -39.8% |
Cash flow
|
|---|
| Capex | 0.432 | 0.532 | 0.728 | 0.264 | 0.350 | 32.6% |
Ratios
|
|---|
| Revenue growth | 6.7% | 22.7% | 9.2% | 15.0% | 4.0% | |
| EBITDA growth | 4.6% | -68.7% | -339.6% | -206.2% | 26.0% | |
|
|---|
| Gross Margin | 24.9% | 22.0% | 20.7% | 24.6% | 26.0% | 1.4% |
| EBITDA Margin | 8.7% | 2.2% | -4.9% | 4.5% | 5.5% | 1.0% |
| SG&A, % of revenue | | 26.1% | 27.3% | 22.4% | 21.6% | -0.8% |
| Net Income Margin | 5.9% | -4.1% | -10.0% | 0.5% | 3.5% | 3.0% |
| CAPEX, % of revenue | 1.1% | 1.1% | 1.4% | 0.4% | 0.6% | 0.1% |
|
|---|
| ROIC | 24.0% | 3.2% | -19.2% | 7.6% | 13.2% | 5.6% |
| ROE | 20.9% | -16.2% | -53.3% | 2.5% | 12.2% | 9.7% |
| Net Debt/EBITDA | 0.0x | 2.3x | | -0.1x | -2.0x | -1.9x |
Peers in Support Services
Below we provide Driver Group benchmarking against other companies in Support Services 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 |
|---|
| Mobilityone Ltd ($MBO) | 3.7% | 23.0% | -5.3% | 37.9% | |
| Mortice Ltd ($MORT) | | 18.9% | 51.1% | 36.1% | 21.1% |
| Rws Hldgs ($RWS) | | 1.8% | 28.1% | 34.5% | 86.6% |
| Empresaria Group ($EMR) | -3.3% | -0.3% | 44.4% | 32.1% | |
| Norish ($NSH) | 3.7% | 16.4% | 16.7% | 31.4% | |
| |
|---|
| Median (49 companies) | 3.7% | 6.9% | 2.2% | 6.9% | 8.7% |
|---|
| Driver Group ($DRV) | | 22.7% | 9.2% | 15.0% | 4.0% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inspired Energy ($INSE) | 78.7% | 76.2% | 80.5% | 83.1% | |
| Ienergizer Ltd ($IBPO) | 76.8% | 72.7% | 71.3% | 71.2% | 69.7% |
| Spectra Systems Corp ($SPSY) | 51.4% | 47.6% | 68.3% | 71.1% | |
| Vianet Group ($VNET) | 58.8% | 69.2% | 70.1% | 69.7% | 69.9% |
| Grafenia ($GRA) | 56.1% | 70.8% | 66.3% | 63.0% | 57.0% |
| |
|---|
| Median (43 companies) | 29.2% | 28.4% | 27.3% | 28.1% | 31.6% |
|---|
| Driver Group ($DRV) | 24.9% | 22.0% | 20.7% | 24.6% | 26.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Northgate ($67GX) | 40.6% | 39.4% | 38.3% | 35.9% | 35.4% |
| Spectra Systems Corp ($SPSY) | 12.3% | 6.0% | 19.7% | 34.0% | |
| Inspired Energy ($INSE) | 1.5% | 35.4% | 34.4% | 32.4% | |
| Vp ($VP.) | 24.2% | 26.2% | 28.4% | 28.6% | 27.2% |
| Rws Hldgs ($RWS) | 22.8% | 23.1% | 26.4% | 25.5% | 20.8% |
| |
|---|
| Median (49 companies) | 6.7% | 7.6% | 5.7% | 5.7% | 7.1% |
|---|
| Driver Group ($DRV) | 8.7% | 2.2% | -4.9% | 4.5% | 5.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Vp ($VP.) | 21.6% | 25.7% | 24.1% | 26.0% | 23.6% |
| Augean ($AUG) | 12.3% | 12.3% | 11.0% | 10.0% | |
| Petards Group ($PEG) | 0.5% | 0.9% | 1.7% | 10.0% | |
| Capital Drilling Ltd ($CAPD) | 13.9% | 10.1% | 13.7% | 9.0% | |
| Billing Services Group ($BILL) | 2.1% | 4.1% | 3.0% | 4.5% | |
| |
|---|
| Median (49 companies) | 1.0% | 0.9% | 1.0% | 0.9% | 1.1% |
|---|
| Driver Group ($DRV) | 1.1% | 1.1% | 1.4% | 0.4% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Sthree ($STHR) | 38.1% | 50.2% | 46.2% | 43.4% | |
| Mortice Ltd ($MORT) | 19.6% | 21.9% | 14.5% | 23.2% | 18.4% |
| Petards Group ($PEG) | 24.7% | 23.9% | 22.7% | 20.3% | |
| Rws Hldgs ($RWS) | 24.5% | 23.3% | 23.5% | 20.2% | 12.8% |
| Latham(James) ($LTHM) | 17.5% | 16.8% | 19.2% | 19.3% | 17.4% |
| |
|---|
| Median (50 companies) | 10.0% | 10.7% | 7.9% | 7.4% | 7.9% |
|---|
| Driver Group ($DRV) | 24.0% | 3.2% | -19.2% | 7.6% | 13.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Nakama Group ($NAK) | 5.2x | 1.4x | 3.1x | 48.5x | |
| 21St Century Technology ($C21) | -0.8x | -0.2x | | 11.2x | |
| Ceps ($CEPS) | 6.6x | 3.8x | 13.9x | 5.8x | |
| Ibex Global Solutions ($IBEX) | 2.7x | 1.0x | 1.7x | 4.5x | |
| Menzies(John) ($68HN) | 2.0x | 2.4x | 1.2x | 3.0x | |
| |
|---|
| Median (42 companies) | 0.3x | -0.1x | 0.1x | 0.5x | 0.8x |
|---|
| Driver Group ($DRV) | 0.0x | 2.3x | | -0.1x | -2.0x |
