Watkin Jones Plc EBITDA surged on 26.1% and EBITDA Margin increased slightly on 0.70 pp from 14.5% to 15.2%
15 Jan 2019 • About Watkin Jones Plc (
$WJG) • By InTwits
Watkin Jones Plc reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Watkin Jones Plc is a fast growth stock: FY2018 revenue growth was 20.3%, 5 year revenue CAGR was 24.5% at FY2018 ROIC 31.4%
- EBITDA Margin is quite volatile: 15.2% in FY2018, 14.5% in FY2017, 4.5% in FY2016, 14.8% in FY2015, 6.9% in FY2014
- Watkin Jones Plc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.1%.
- In the last 5 years the company invested considerably less than D&A: £1m vs. £1m. In FY2018 this situation was still the same: CAPEX was 0 while D&A was 1
- The company has highly profitable business model: ROIC is 31.4%
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 jumped on 20.3%. During the last 5 years Revenue growth bottomed in FY2015 at 7.4% and was accelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 11.9 pp from -3.7% to 8.2% in FY2018.
Gross Margin decreased slightly on 1.1 pp from 21.0% to 20.0% in FY2018. During the last 5 years Gross Margin topped in FY2017 at 21.0%. SG&A as a % of Revenue decreased slightly on 0.62 pp from 6.9% to 6.3% in FY2018. SG&A as a % of Revenue grew at 0.64 pp per annum in FY2014-FY2018.
Net Income margin showed almost no change in FY2018. The efficient tax rate was 18.7% in FY2018.
Investments (CAPEX, working capital and M&A)
Watkin Jones Plc's CAPEX/Revenue was 0.082% in FY2018. CAPEX/Revenue showed almost no change from FY2015 to FY2018. For the last three years the average CAPEX/Revenue was 0.083%.
Return on investment
The company operates at high and attractive ROIC (31.4%) and ROE (31.7%). ROIC showed almost no change in FY2018. ROE showed almost no change in FY2018.
Leverage (Debt)
Debt level is -1.5x Net Debt / EBITDA and 0.5x Debt / EBITDA. Debt increased on 8.9% while cash jumped on 63.2%.
Watkin Jones Plc has no short term refinancing risk: cash is higher than short term debt (6,644.2%).
Valuation and dividends
Watkin Jones Plc's trades at EV/EBITDA 8.7x and P/E 12.7x.
The company paid 40.7% of Net Income as dividends in FY2018.
Management team
At the end of financial year the company had 1.3% shares owned by insiders.
The company has 731 employees. Average revenue per employee in FY2018 was £496,654.
Financial and operational results
FY ended 30 Sep 2018
Watkin Jones Plc ($WJG) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 227.3 | 244.2 | 267.0 | 301.9 | 363.1 | 20.3% |
| Gross Profit | 25.9 | 44.0 | 53.8 | 63.5 | 72.4 | 14.0% |
| SG&A | 9.5 | 11.6 | 14.6 | 20.8 | 22.8 | 9.5% |
| EBITDA | 15.6 | 36.1 | 12.0 | 43.8 | 55.2 | 26.1% |
| EBIT | | | | | 53.9 | |
| Tax | | | | | 10.1 | |
| Net Income | 9.7 | 22.2 | 4.2 | 35.8 | 44.2 | 23.5% |
| Stock Based Compensation | | | | | 0.1 | |
Balance Sheet
|
|---|
| Cash | 25.9 | 59.3 | 47.2 | 65.3 | 106.6 | 63.2% |
| Inventory | | | | | 132.8 | |
| Short Term Debt | 0.9 | 9.8 | 15.0 | 1.5 | 1.6 | 6.6% |
| Long Term Debt | 15.3 | 10.4 | 0.0 | 22.8 | 24.9 | 9.0% |
Cash flow
|
|---|
| Capex | 0.2 | 0.1 | 0.2 | 0.3 | 0.3 | -11.3% |
| Dividends | | | | | 18.0 | |
Ratios
|
|---|
| Revenue growth | 87.3% | 7.4% | 9.3% | 13.1% | 20.3% | |
| EBITDA growth | 142.7% | 131.3% | -66.8% | 265.0% | 26.1% | |
|
|---|
| Gross Margin | 11.4% | 18.0% | 20.2% | 21.0% | 20.0% | -1.1% |
| EBITDA Margin | 6.9% | 14.8% | 4.5% | 14.5% | 15.2% | 0.7% |
| EBIT Margin | | | | | 14.8% |
| SG&A, % of revenue | 4.2% | 4.7% | 5.5% | 6.9% | 6.3% | -0.6% |
| SBC, % of revenue | | | | | 0.0% |
| Net Income Margin | 4.3% | 9.1% | 1.6% | 11.9% | 12.2% | 0.3% |
| CAPEX, % of revenue | 0.1% | 0.0% | 0.1% | 0.1% | 0.1% | -0.0% |
|
|---|
| ROIC | 13.1% | 29.8% | 9.0% | 31.6% | 31.4% | -0.2% |
| ROE | 11.3% | 21.8% | 3.9% | 31.3% | 31.7% | 0.4% |
| Net Debt/EBITDA | -0.6x | -1.1x | -2.7x | -0.9x | -1.5x | -0.5x |
People
|
|---|
| Insider ownership | | | | | 1.3% | |
| Employees | | | | | 731 | |
| Revenue/Employee, th. £ | | | | | 497 | |
Peers in Real Estate Development
Below you can find Watkin Jones Plc benchmarking vs. other companies in Real Estate Development 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.
