Pressure Technologies EBITDA dropped on 42.0% and EBITDA Margin decreased slightly on 1.9 pp from 6.0% to 4.2%
11 Dec 2018 • About Pressure Technologies (
$PRES) • By InTwits
Pressure Technologies reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 4.2% in FY2018 vs. 6.0% in FY2017 vs. 14.5% in FY2014
- EBITDA Margin is quite volatile: 4.2% in FY2018, 6.0% in FY2017, 8.0% in FY2016, 10.0% in FY2015, 14.5% in FY2014
- Pressure Technologies has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.6%. At the same time it's a lot of higher than industry average of 2.8%.
- CAPEX is quite volatile: £1m in FY2018, £1m in FY2017, £1m in FY2016, £6m in FY2015, £2m in FY2014
- The company has unprofitable business model: ROIC is -5.3%
- It operates with high leverage: Net Debt/EBITDA is 5.0x while industry average is -0.7x
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 dropped on 16.1%. 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. EBITDA Margin declined at -2.5 pp per annum in FY2014-FY2018.
Gross Margin increased on 2.0 pp from 27.9% to 29.9% in FY2018. SG&A as a % of Revenue increased on 3.2 pp from 25.0% to 28.2% in FY2018.
Net Income margin dropped on 12.8 pp from -3.0% to -15.8% in FY2018. Net Income margin followed a declining trend at -5.0 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 3.1%. CAPEX/Revenue decreased on 8.5 pp from 11.6% in FY2015 to 3.1% in FY2018. It's average level of CAPEX/Revenue for the last three years was 2.7%. Pressure Technologies invested a big chunk of EBITDA (75.4%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-5.3%) and ROE (-15.1%). ROIC decreased on 2.2 pp from -3.1% to -5.3% in FY2018. ROE dropped on 11.8 pp from -3.3% to -15.1% in FY2018. ROIC followed a declining trend at -6.2 pp per annum in the last 5 years. ROE followed a declining trend at -6.3 pp per annum in FY2014-FY2018.
Leverage (Debt)
Debt level is 5.0x Net Debt / EBITDA and 9.6x Debt / EBITDA. Net Debt / EBITDA jumped on 0.2x from 4.8x to 5.0x in FY2018. Debt dropped on 18.8% while cash jumped on 28.2%. Net Debt/EBITDA stuck to a growing trend at 1.5x per annum in the last 5 years.
Pressure Technologies has no short term refinancing risk: cash is higher than short term debt (2,547.7%).
Financial and operational results
FY ended 30 Nov -0001
Pressure Technologies ($PRES) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 54.015 | 53.816 | 35.753 | 38.418 | 32.245 | -16.1% |
| Gross Profit | 15.738 | 15.760 | 9.542 | 10.708 | 9.640 | -10.0% |
| SG&A | 7.904 | 11.942 | 9.923 | 9.611 | 9.093 | -5.4% |
| EBITDA | 7.813 | 5.380 | 2.876 | 2.308 | 1.339 | -42.0% |
| Net Income | 3.711 | 0.699 | -0.688 | -1.147 | -5.088 | |
Balance Sheet
|
|---|
| Cash | 6.356 | 3.459 | 6.073 | 4.791 | 6.140 | 28.2% |
| Short Term Debt | 0.180 | 0.337 | 0.242 | 0.219 | 0.241 | 10.0% |
| Long Term Debt | 0.324 | 10.236 | 12.411 | 15.642 | 12.636 | -19.2% |
Cash flow
|
|---|
| Capex | 1.792 | 6.250 | 0.883 | 0.961 | 1.009 | 5.0% |
Ratios
|
|---|
| Revenue growth | 57.1% | -0.4% | -33.6% | 7.5% | -16.1% | |
| EBITDA growth | 74.8% | -31.1% | -46.5% | -19.7% | -42.0% | |
|
|---|
| Gross Margin | 29.1% | 29.3% | 26.7% | 27.9% | 29.9% | 2.0% |
| EBITDA Margin | 14.5% | 10.0% | 8.0% | 6.0% | 4.2% | -1.9% |
| SG&A, % of revenue | 14.6% | 22.2% | 27.8% | 25.0% | 28.2% | 3.2% |
| Net Income Margin | 6.9% | 1.3% | -1.9% | -3.0% | -15.8% | -12.8% |
| CAPEX, % of revenue | 3.3% | 11.6% | 2.5% | 2.5% | 3.1% | 0.6% |
|
|---|
| ROIC | 22.1% | 3.9% | -1.6% | -3.1% | -5.3% | -2.2% |
| ROE | 13.7% | 1.9% | -1.9% | -3.3% | -15.1% | -11.8% |
| Net Debt/EBITDA | -0.7x | 1.3x | 2.3x | 4.8x | 5.0x | 0.2x |
Peers in Industrial Engineering
Below we provide Pressure Technologies benchmarking against other companies in Industrial Engineering 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 |
|---|
| Flowtech Fluidpower ($FLO) | 17.7% | 18.7% | 19.9% | 45.6% | |
| Corac Group ($CRA) | 12.2% | -5.7% | 3.8% | 38.8% | |
| 600 Group ($SIXH) | | 5.0% | 3.4% | 29.9% | 12.3% |
| Molins ($MLIN) | -16.9% | -0.5% | -52.3% | 28.7% | |
| Mincon Group ($MCON) | 4.2% | 28.8% | 8.4% | 27.8% | |
| |
|---|
| Median (20 companies) | 2.1% | 5.0% | 4.0% | 8.4% | 18.5% |
|---|
| Pressure Technologies ($PRES) | | -0.4% | -33.6% | 7.5% | -16.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 54.0% | 55.8% | 56.8% | 56.9% | |
| Rotork ($76ID) | 48.0% | 45.7% | 44.3% | 44.2% | |
| Tricorn Group ($TCN) | 36.1% | 36.0% | 40.3% | 40.6% | 38.3% |
| Amiad Water Systems Ltd ($AFS) | 38.9% | 40.5% | 39.3% | 39.5% | |
| Mincon Group ($MCON) | 43.2% | 40.2% | 40.1% | 36.5% | |
| |
|---|
| Median (17 companies) | 33.2% | 34.2% | 32.0% | 33.9% | 29.2% |
|---|
| Pressure Technologies ($PRES) | 29.1% | 29.3% | 26.7% | 27.9% | 29.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 27.4% | 28.2% | 30.1% | 32.2% | |
| Rotork ($76ID) | 28.0% | 25.0% | 22.8% | 19.9% | |
| Ab Dynamics ($ABDP) | 20.1% | 24.0% | 22.7% | 19.0% | |
| Mincon Group ($MCON) | 22.7% | 17.6% | 16.4% | 14.3% | |
| Northbridge Industrial Services ($NBI) | 32.4% | 32.5% | 9.1% | 14.1% | |
| |
|---|
| Median (19 companies) | 7.4% | 7.9% | 7.7% | 10.0% | 6.0% |
|---|
| Pressure Technologies ($PRES) | 14.5% | 10.0% | 8.0% | 6.0% | 4.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ab Dynamics ($ABDP) | 2.5% | 4.2% | 7.9% | 32.7% | |
| Chamberlin ($CMH) | 2.6% | 3.1% | 4.2% | 11.6% | 7.9% |
| Ms International ($MSI) | 2.0% | 1.8% | 4.7% | 7.7% | 1.6% |
| Mincon Group ($MCON) | 4.3% | 2.5% | 6.9% | 5.8% | |
| Renold ($RNO) | 3.3% | 2.1% | 4.8% | 4.6% | 4.5% |
| |
|---|
| Median (19 companies) | 2.4% | 2.2% | 3.5% | 3.0% | 3.4% |
|---|
| Pressure Technologies ($PRES) | 3.3% | 11.6% | 2.5% | 2.5% | 3.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Somero Enterprise Inc ($SOMA) | 51.7% | 54.3% | 51.7% | 55.2% | |
| Renold ($RNO) | -2.5% | 41.3% | 39.1% | 44.7% | 21.3% |
| Ab Dynamics ($ABDP) | 28.4% | 31.4% | 28.0% | 19.3% | |
| Braime(T.F.& J.H.)(Hldgs) ($BMTO) | 11.9% | 7.5% | 10.9% | 17.2% | |
| Rotork ($76ID) | 38.1% | 21.9% | 17.0% | 15.7% | |
| |
|---|
| Median (20 companies) | 10.8% | 9.5% | 7.1% | 7.6% | 6.1% |
|---|
| Pressure Technologies ($PRES) | 22.1% | 3.9% | -1.6% | -3.1% | -5.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Tricorn Group ($TCN) | 5.8x | 4.0x | 7.2x | 5.1x | 2.3x |
| Chamberlin ($CMH) | | 2.2x | 2.2x | 4.3x | 5.8x |
| 600 Group ($SIXH) | 2.2x | 3.1x | | 4.0x | 5.2x |
| Northbridge Industrial Services ($NBI) | 1.2x | 1.5x | 4.9x | 2.7x | |
| Flowtech Fluidpower ($FLO) | 1.0x | 1.3x | 1.8x | 1.9x | |
| |
|---|
| Median (18 companies) | 0.6x | 0.7x | 1.1x | 0.3x | 2.0x |
|---|
| Pressure Technologies ($PRES) | -0.7x | 1.3x | 2.3x | 4.8x | 5.0x |
