St.Modwen Properties CAPEX surged on 82.6% and Revenue surged on 36.9%
05 Feb 2019 • About St.Modwen Properties (
$SMP) • By InTwits
St.Modwen Properties reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- St.Modwen Properties is a fast growth stock: FY2018 revenue growth was 36.9%, 5 year revenue CAGR was 22.0% at FY2018 ROIC 6.3%
- EBITDA Margin is declining: 21.3% in FY2018 vs. 28.6% in FY2017 vs. 45.4% in FY2014
- St.Modwen Properties has high CAPEX intensity: 5 year average CAPEX/Revenue was 33.8%. At the same time it's a lot of higher than industry average of 17.3%.
- CAPEX is quite volatile: £113m in FY2018, £62m in FY2017, £90m in FY2016, £161m in FY2015, £98m in FY2014
- The company has potentially unprofitable business model: ROIC is 6.3%
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 36.9%. During the last 5 years Revenue growth bottomed in FY2016 at 0.070% and was accelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 14.2 pp from 18.8% to 33.0% in 2018. EBITDA Margin stuck to a declining trend at -6.7 pp per annum in FY2014-FY2018.
Net Income margin decreased on 4.9 pp from 18.7% to 13.8% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 25.8% in FY2018. CAPEX/Revenue dropped on 30.0 pp from 55.8% in FY2015 to 25.8% in FY2018. It's average CAPEX/Revenue for the last three years was 25.5%. St.Modwen Properties has spent a lot to CAPEX (121% of EBITDA) to secure its growth.
Return on investment
The company operates at low ROIC (6.3%) and ROE (5.9%). ROIC showed almost no change in FY2018. ROE showed almost no change in FY2018. ROIC stuck to a declining trend at -1.5 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.0x and Debt / EBITDA is 3.4x. Net Debt / EBITDA dropped on 2.4x from 5.4x to 3.0x in FY2018. Debt dropped on 36.3% while cash surged on 7,680%. During FY2014-FY2018 Net Debt/EBITDA topped in FY2016 at 5.5x and was declining since that time.
St.Modwen Properties has no short term refinancing risk: cash is higher than short term debt (1,296.7%).
Valuation and dividends
St.Modwen Properties's trades at EV/EBITDA 12.5x and P/E 14.8x.
Management team
St.Modwen Properties's CEO Mark Christopher Allan is a founder and has spent 3 years with the company. Robert Hudson "Rob" is a St.Modwen Properties's CFO. Robert Hudson "Rob" has spent 9 years at the company.
Financial and operational results
FY ended 30 Nov 2018
St.Modwen Properties ($SMP) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 266.5 | 287.5 | 287.7 | 318.6 | 436.2 | 36.9% |
| EBITDA | 120.9 | 137.3 | 94.4 | 91.1 | 92.8 | 1.9% |
| Net Income | 118.6 | 216.4 | 53.4 | 59.6 | 60.2 | 1.0% |
Balance Sheet
|
|---|
| Cash | 3.2 | 4.8 | 4.2 | 0.5 | 38.9 | 7,680.0% |
| Short Term Debt | 180.1 | 184.5 | 176.8 | 0.6 | 3.0 | 400.0% |
| Long Term Debt | 183.1 | 322.4 | 350.6 | 491.3 | 310.2 | -36.9% |
Cash flow
|
|---|
| Capex | 97.8 | 160.5 | 90.0 | 61.6 | 112.5 | 82.6% |
Ratios
|
|---|
| Revenue growth | 65.4% | 7.9% | 0.1% | 10.7% | 36.9% | |
| EBITDA growth | 73.2% | 13.6% | -31.2% | -3.5% | 1.9% | |
|
|---|
| EBITDA Margin | 45.4% | 47.8% | 32.8% | 28.6% | 21.3% | -7.3% |
| Net Income Margin | 44.5% | 75.3% | 18.6% | 18.7% | 13.8% | -4.9% |
| CAPEX, % of revenue | 36.7% | 55.8% | 31.3% | 19.3% | 25.8% | 6.5% |
|
|---|
| ROIC | 11.6% | 10.7% | 6.3% | 5.9% | 6.3% | 0.4% |
| ROE | 17.8% | 26.5% | 5.7% | 6.1% | 5.9% | -0.2% |
| Net Debt/EBITDA | 3.0x | 3.7x | 5.5x | 5.4x | 3.0x | -2.4x |
Peers in Real Estate Investment & Services
Below we provide St.Modwen Properties benchmarking against other companies in Real Estate Investment & 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 |
|---|
| Plaza Centers Nv ($PLAZ) | 131.0% | -13.4% | -53.3% | 664.4% | |
| PIK Group OJSC ($PIK) | -2.1% | -16.5% | 17.5% | 191.5% | |
| London & Associated Properties ($LAS) | -22.6% | -2.6% | -9.1% | 51.4% | |
| Etalon Group Ltd ($ETLN) | 29.0% | -17.6% | 15.6% | 44.1% | |
| Formation Group ($FRM) | | 199.3% | 23.8% | 25.8% | 4.4% |
| |
|---|
| Median (20 companies) | -0.2% | 5.5% | 8.9% | 9.2% | 17.5% |
|---|
| St.Modwen Properties ($SMP) | | 7.9% | 0.1% | 10.7% | 36.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Arricano Real Estate ($ARO) | 96.5% | 96.1% | 96.4% | 96.5% | |
| Summit Germany Ltd ($SMTG) | | 92.3% | 92.2% | 92.2% | |
| Caledonian Trust ($CNN) | 43.2% | | 50.4% | 80.5% | 74.8% |
| Panther Securities ($PNS) | 68.0% | 73.5% | 75.2% | 70.8% | |
| Songbird Estates ($SBD) | 70.7% | 72.5% | 72.8% | 68.6% | |
| |
|---|
| Median (15 companies) | 38.5% | 34.5% | 42.0% | 31.0% | 10.5% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Summit Germany Ltd ($SMTG) | 89.3% | 75.5% | 129.4% | 241.4% | |
| Arricano Real Estate ($ARO) | -138.3% | 12.7% | 190.4% | 238.1% | |
| Caledonian Trust ($CNN) | -59.1% | | 17.4% | 191.0% | 316.6% |
| Safestore Hldgs ($SAFE) | 77.7% | 128.4% | 95.1% | 84.8% | 137.7% |
| Raven Russia Ltd ($RUS) | 4.7% | -52.3% | 40.4% | 75.8% | |
| |
|---|
| Median (19 companies) | 16.7% | 24.8% | 28.0% | 20.8% | 56.7% |
|---|
| St.Modwen Properties ($SMP) | 45.4% | 47.8% | 32.8% | 28.6% | 21.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Panther Securities ($PNS) | 26.0% | 15.7% | 3.7% | 68.6% | |
| Taliesin Property Fund Ltd ($TPFZ) | 45.2% | 43.7% | 37.2% | 40.5% | |
| Hagl JSC ($HAG) | 145.6% | 127.1% | 55.5% | 30.0% | |
| Safestore Hldgs ($SAFE) | 6.3% | 7.2% | 24.5% | 16.7% | 19.2% |
| HALS-Development JSC ($HALS) | 25.0% | 47.3% | 12.7% | 15.8% | |
| |
|---|
| Median (20 companies) | 2.8% | 5.1% | 1.5% | 1.5% | 1.5% |
|---|
| St.Modwen Properties ($SMP) | 36.7% | 55.8% | 31.3% | 19.3% | 25.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Arricano Real Estate ($ARO) | -12.3% | 1.7% | 34.2% | 43.8% | |
| Damac Real Estate Development Ltd ($DMC) | 31.3% | 41.5% | 24.5% | 16.0% | |
| Summit Germany Ltd ($SMTG) | 7.1% | 5.6% | 9.2% | 15.8% | |
| Taliesin Property Fund Ltd ($TPFZ) | 0.3% | -3.0% | 15.3% | 15.1% | |
| Etalon Group Ltd ($ETLN) | 14.3% | 10.2% | 6.6% | 12.6% | |
| |
|---|
| Median (20 companies) | 3.2% | 4.9% | 6.9% | 7.1% | 9.0% |
|---|
| St.Modwen Properties ($SMP) | 11.6% | 10.7% | 6.3% | 5.9% | 6.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Development Securities ($DSC) | 10.3x | 3.5x | 5.7x | 70.8x | 3.9x |
| Hagl JSC ($HAG) | 14.2x | 14.8x | 30.8x | 11.7x | |
| Songbird Estates ($SBD) | | 12.3x | 12.4x | 11.3x | |
| Farglory Land Development Co Ltd ($FLDS) | 5.7x | 4.4x | 4.8x | 8.9x | |
| Panther Securities ($PNS) | 11.8x | 9.7x | 9.4x | 8.5x | |
| |
|---|
| Median (17 companies) | 9.9x | 4.5x | 4.5x | 3.4x | 2.1x |
|---|
| St.Modwen Properties ($SMP) | 3.0x | 3.7x | 5.5x | 5.4x | 3.0x |
