Barclays reports 283% Net Income growth in 2018
21 Feb 2019 • About Barclays (
$BARC) • By InTwits
Barclays reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Barclays has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.2%. At the same time it's a lot of higher than industry average of 2.4%.
- CAPEX is quite volatile: £113m in FY2018, £131m in FY2017, £85m in FY2016, £71m in FY2015, £53m in FY2014
- The company has potentially unprofitable business model: ROIC is 1.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 7.1%.
Net Income margin jumped on 13.0 pp from -4.8% to 8.2% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 4.9% in 2018. Barclays's CAPEX/Revenue decreased on 2.3 pp from 7.1% in 2015 to 4.9% in 2018. It's average CAPEX/Revenue for the last three years was 5.5%. During the last 5 years CAPEX as a % of Revenue topped in 2015 at 7.1% and was declining since that time.
Return on investment
The company operates at low ROIC (1.4%) and ROE (3.0%). ROIC showed almost no change in 2018. ROE increased on 6.4 pp from -3.4% to 3.0% in 2018. ROIC grew at 0.22 pp per annum in 2014-2018.
Leverage (Debt)
Debt decreased slightly on 0.97% while cash surged on 46.8%.
Barclays has no short term refinancing risk: cash is higher than short term debt (671.3%).
Management team
The company's CEO James E Staley "Jes" is a founder and has spent 4 years with the company. Barclays's CFO is Tushar Morzaria. Tushar Morzaria has 6 years tenure at the company.
Financial and operational results
FY ended 31 Dec 2018
Barclays ($BARC) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 32,233 | 26,996 | 27,257 | 26,799 | 28,699 | 7.1% |
| Net Income | 76 | -49 | 2,080 | -1,283 | 2,349 | |
Balance Sheet
|
|---|
| Cash | 40,905 | 50,722 | 103,820 | 173,235 | 254,291 | 46.8% |
| Short Term Debt | 103,514 | 67,096 | 70,081 | 44,969 | 37,882 | -15.8% |
| Long Term Debt | 107,252 | 90,617 | 99,315 | 97,140 | 102,845 | 5.9% |
Cash flow
|
|---|
| Capex | 657 | 1,928 | 1,707 | 1,456 | 1,402 | -3.7% |
Ratios
|
|---|
| Revenue growth | -11.4% | -16.2% | 1.0% | -1.7% | 7.1% | |
|
|---|
| Net Income Margin | 0.2% | -0.2% | 7.6% | -4.8% | 8.2% | 13.0% |
| CAPEX, % of revenue | 2.0% | 7.1% | 6.3% | 5.4% | 4.9% | -0.5% |
|
|---|
| ROIC | 0.6% | 0.5% | 1.0% | 1.2% | 1.4% | 0.2% |
| ROE | -0.3% | -0.7% | 2.9% | -3.4% | 3.0% | 6.4% |
Peers in Banks
Below we provide Barclays benchmarking against other companies in Banks 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 |
|---|
| European Islamic Investment Bank ($EIIB) | 42.3% | -4.1% | -63.9% | 232.5% | |
| Halyk Savings Bank Of Kazakhstn JSC ($HSBK) | 16.3% | 19.5% | 16.4% | 59.5% | |
| Zenith Bank ($ZENB) | | 6.8% | 17.9% | 46.7% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | | 26.8% | 27.0% | 46.4% | 28.9% |
| TCS Group Holding ($TCS) | 11.5% | 10.6% | 34.0% | 33.7% | |
| |
|---|
| Median (43 companies) | 13.9% | 4.0% | 3.9% | 4.5% | 12.9% |
|---|
| Barclays ($BARC) | | -16.2% | 1.0% | -1.7% | 7.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Lloyds Banking Group ($LLPC) | 13.1% | 13.6% | 14.5% | 14.5% | |
| Banco Santander Sa ($BNC) | 8.9% | 10.2% | 9.1% | 10.0% | 14.7% |
| Bcb Hldgs Ltd ($BCBW) | 5.4% | 2.5% | 3.0% | 7.3% | 5.9% |
| Royal Bank Of Scotland Group ($RBS) | 4.1% | 4.6% | 5.6% | 7.1% | 3.7% |
| Diamond Bank ($DBPA) | 6.0% | 6.7% | 6.2% | 7.0% | |
| |
|---|
| Median (39 companies) | 2.1% | 2.5% | 2.0% | 1.8% | 1.3% |
|---|
| Barclays ($BARC) | 2.0% | 7.1% | 6.3% | 5.4% | 4.9% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TCS Group Holding ($TCS) | 6.7% | 3.4% | 22.5% | 31.8% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 30.1% | 30.3% | 28.0% | 25.3% | 25.4% |
| Guaranty Trust Bank ($GRTB) | 17.8% | 16.0% | 17.4% | 18.3% | |
| Sberbank Of Russia ($SBER) | 4.8% | 4.0% | 9.4% | 13.0% | |
| Zenith Bank ($ZENB) | 15.0% | 11.2% | 11.1% | 11.4% | |
| |
|---|
| Median (43 companies) | 4.4% | 3.5% | 4.6% | 4.6% | 4.5% |
|---|
| Barclays ($BARC) | 0.6% | 0.5% | 1.0% | 1.2% | 1.4% |
