Zytronic Net Income dropped on 20.5% and Revenue decreased on 2.6%
11 Dec 2018 • About Zytronic (
$ZYT) • By InTwits
Zytronic reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Zytronic has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's in pair with industry average of 2.3%
- CAPEX is quite volatile: £0m in FY2018, £0m in FY2017, £0m in FY2016, £1m in FY2015, £0m in FY2014
- The company has highly profitable business model: ROIC is 15.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Zytronic's Revenue decreased on 2.6%. 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 decreased on 4.1 pp from 41.1% to 37.0% in FY2018. During FY2014-FY2018 Gross Margin topped in FY2016 at 42.8% and was declining since that time. SG&A as a % of Revenue increased slightly on 0.99 pp from 17.4% to 18.4% in FY2018.
Net Income margin decreased on 3.7 pp from 20.0% to 16.4% in FY2018. During FY2014-FY2018 Net Income margin topped in FY2017 at 20.0%. The efficient tax rate was 12.9% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.2% in FY2018. CAPEX/Revenue decreased on 3.4 pp from 4.7% in FY2015 to 1.2% in FY2018. For the last three years the average CAPEX/Revenue was 1.7%.
Return on investment
The company operates at good ROIC (15.1%) and ROE (13.6%). ROIC decreased on 5.7 pp from 20.9% to 15.1% in FY2018. ROE decreased on 4.7 pp from 18.3% to 13.6% in FY2018. During the last 5 years ROE topped in FY2015 at 19.5% and was declining since that time.
Leverage (Debt)
The company has no debt. Cash increased on 3.7%.
Valuation and dividends
The company's trades at EV/EBITDA 6.6x and P/E 13.6x.
The company paid 109.7% of Net Income as dividends in FY2018.
Management team
1.7% of the company is owned by insiders.
The company has 195 employees. Average revenue per employee in FY2018 was £114,297.
Financial and operational results
FY ended 30 Sep 2018
Zytronic ($ZYT) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 18.886 | 21.267 | 21.087 | 22.892 | 22.288 | -2.6% |
| Gross Profit | 6.907 | 8.901 | 9.016 | 9.411 | 8.241 | -12.4% |
| SG&A | | 4.351 | 4.365 | 3.984 | 4.100 | 2.9% |
| EBITDA | 4.317 | 5.913 | 5.394 | 6.600 | 5.288 | -19.9% |
| EBIT | | | | | 4.141 | |
| Interest expence | | | | | 0.021 | |
| Tax | | | | | 0.541 | |
| Net Income | 2.960 | 3.769 | 4.087 | 4.588 | 3.647 | -20.5% |
Balance Sheet
|
|---|
| Cash | 7.806 | 9.833 | 12.763 | 14.099 | 14.626 | 3.7% |
| Accounts Receivable | | | | | 3.738 | |
| Inventory | | | | | 3.021 | |
| Short Term Debt | 0.200 | 0.200 | 1.148 | 0.000 | 0.000 | |
| Long Term Debt | 1.341 | 1.144 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.263 | 0.994 | 0.387 | 0.472 | 0.273 | -42.2% |
| Dividends | | | | | 4.000 | |
Ratios
|
|---|
| Revenue growth | 9.3% | 12.6% | -0.8% | 8.6% | -2.6% | |
| EBITDA growth | 32.8% | 37.0% | -8.8% | 22.4% | -19.9% | |
|
|---|
| Gross Margin | 36.6% | 41.9% | 42.8% | 41.1% | 37.0% | -4.1% |
| EBITDA Margin | 22.9% | 27.8% | 25.6% | 28.8% | 23.7% | -5.1% |
| EBIT Margin | | | | | 18.6% |
| SG&A, % of revenue | | 20.5% | 20.7% | 17.4% | 18.4% | 1.0% |
| Net Income Margin | 15.7% | 17.7% | 19.4% | 20.0% | 16.4% | -3.7% |
| CAPEX, % of revenue | 1.4% | 4.7% | 1.8% | 2.1% | 1.2% | -0.8% |
|
|---|
| ROIC | 17.0% | 22.7% | 18.1% | 20.9% | 15.1% | -5.7% |
| ROE | 17.3% | 19.5% | 18.6% | 18.3% | 13.6% | -4.7% |
| Net Debt/EBITDA | -1.5x | -1.4x | -2.2x | -2.1x | -2.8x | -0.6x |
People
|
|---|
| Insider ownership | | | | | 1.7% | |
| Employees | | | | | 195 | |
| Revenue/Employee, th. £ | | | | | 114 | |
Peers in Electronic & Electrical Equipment
Below we provide Zytronic benchmarking against other companies in Electronic & Electrical Equipment 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 |
|---|
| Image Scan Hldgs ($IGE) | | -22.2% | 94.1% | 51.9% | -31.2% |
| Flowgroup ($FLOW) | 141.9% | 21.1% | 144.6% | 39.8% | |
| Gooch & Housego ($GHH) | | 12.3% | 9.3% | 30.2% | 11.5% |
| Walsin Lihwa Corp ($WALS) | | -8.4% | -4.0% | 17.0% | |
| Stadium Group ($SDM) | -1.1% | 29.0% | -1.5% | 15.2% | |
| |
|---|
| Median (16 companies) | -4.6% | -1.4% | 0.6% | 7.2% | 3.1% |
|---|
| Zytronic ($ZYT) | | 12.6% | -0.8% | 8.6% | -2.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Prophotonix Ltd ($PPIR) | | | 45.4% | 44.6% | |
| Gooch & Housego ($GHH) | 40.5% | 39.4% | 37.5% | 41.1% | 40.1% |
| Elektron Technology ($EKT) | 34.8% | 35.6% | 37.2% | 39.1% | 49.7% |
| Image Scan Hldgs ($IGE) | 30.7% | | 42.3% | 38.3% | 47.5% |
| Maruwa Co Ltd ($MAW) | 32.8% | 30.0% | 35.9% | 36.9% | 43.1% |
| |
|---|
| Median (14 companies) | 29.2% | 24.1% | 30.5% | 29.1% | 41.6% |
|---|
| Zytronic ($ZYT) | 36.6% | 41.9% | 42.8% | 41.1% | 37.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Maruwa Co Ltd ($MAW) | 17.8% | 14.7% | 19.6% | 21.4% | 28.7% |
| Morgan Advanced Materials ($BA29) | 9.8% | 12.8% | 14.6% | 19.2% | |
| Gooch & Housego ($GHH) | 13.4% | 19.8% | 17.3% | 17.3% | 14.1% |
| Dewhurst ($DWHA) | 13.7% | 14.7% | 13.4% | 13.6% | 14.2% |
| Lpa Group ($LPA) | 5.7% | 4.4% | 9.3% | 11.6% | |
| |
|---|
| Median (15 companies) | 4.5% | 5.8% | 8.3% | 8.9% | 14.1% |
|---|
| Zytronic ($ZYT) | 22.9% | 27.8% | 25.6% | 28.8% | 23.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lpa Group ($LPA) | 14.8% | 1.8% | 6.0% | 7.3% | |
| Maruwa Co Ltd ($MAW) | 7.6% | 6.5% | 4.4% | 6.1% | 6.9% |
| Gooch & Housego ($GHH) | 2.7% | 3.9% | 11.3% | 5.2% | 4.7% |
| Wintek Corp ($WTKA) | 2.4% | 0.6% | 1.6% | 4.2% | |
| Solid State ($SSP) | 1.3% | 1.4% | 2.0% | 3.7% | 0.9% |
| |
|---|
| Median (16 companies) | 1.3% | 1.4% | 1.7% | 1.6% | 1.3% |
|---|
| Zytronic ($ZYT) | 1.4% | 4.7% | 1.8% | 2.1% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Image Scan Hldgs ($IGE) | -45.6% | | 16.4% | 39.8% | -8.5% |
| Morgan Advanced Materials ($BA29) | 10.9% | 18.4% | 21.9% | 31.6% | |
| Prophotonix Ltd ($PPIR) | | | | 25.8% | |
| Dewhurst ($DWHA) | 24.5% | 27.3% | 24.6% | 24.1% | 18.9% |
| Lpa Group ($LPA) | 7.0% | 2.1% | 13.4% | 15.9% | |
| |
|---|
| Median (16 companies) | 4.7% | 5.7% | 9.4% | 13.4% | 15.2% |
|---|
| Zytronic ($ZYT) | 17.0% | 22.7% | 18.1% | 20.9% | 15.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Apc Technology Group ($APC) | 0.5x | | | 5.2x | |
| Walsin Lihwa Corp ($WALS) | 3.9x | 4.6x | 2.7x | 1.9x | |
| Stadium Group ($SDM) | 1.2x | 0.3x | 0.7x | 1.4x | |
| Lpa Group ($LPA) | 1.5x | 3.8x | 1.3x | 1.1x | |
| Morgan Advanced Materials ($BA29) | 2.3x | 1.8x | 1.7x | 0.9x | |
| |
|---|
| Median (13 companies) | 1.2x | 0.5x | 0.4x | -0.5x | -0.9x |
|---|
| Zytronic ($ZYT) | -1.5x | -1.4x | -2.2x | -2.1x | -2.8x |
