AJ Bell Plc reports 28.9% Net Income growth in 2018 and 18.7% Revenue growth
09 Oct 2019 • About AJ Bell Plc (
$AJB) • By InTwits
AJ Bell Plc reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- AJ Bell Plc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's a lot of higher than industry average of 0.8%.
- CAPEX is quite volatile: £1m in FY2018, £3m in FY2017, £1m in FY2016, £0m in FY2015, £1m in FY2014
- The company has highly profitable business model: ROIC is 42.2%
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 surged on 18.7%. Revenue decline was slowing down on average by 6.0 pp per annum in the last 5 years. 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. During FY2014-FY2018 EBITDA Margin bottomed in FY2016 at 29.2% and was growing since that time.
SG&A as a % of Revenue decreased on 2.7 pp from 71.2% to 68.5% in FY2018. During FY2014-FY2018 SG&A as a % of Revenue topped in FY2016 at 74.0% and was declining since that time.
Net Income margin increased slightly on 2.0 pp from 23.2% to 25.2% in FY2018. During the last 5 years Net Income margin bottomed in FY2016 at 20.8% and was growing since that time. The efficient tax rate was 20.1% in FY2018.
Investments (CAPEX, working capital and M&A)
AJ Bell Plc's CAPEX/Revenue was 1.1% in FY2018. AJ Bell Plc's CAPEX/Revenue showed almost no change from FY2015 to FY2018. It's average level of CAPEX/Revenue for the last three years was 2.2%.
Return on investment
The company operates at high and attractive ROIC (42.2%) and ROE (36.1%). ROIC increased on 6.7 pp from 35.4% to 42.2% in FY2018. ROE increased on 5.7 pp from 30.4% to 36.1% in FY2018. During FY2014-FY2018 ROIC bottomed in FY2015 at 28.5% and was growing since that time. During FY2014-FY2018 ROE bottomed in FY2015 at 24.3% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.6x and Debt / EBITDA is 0.0x. Debt surged on 411% while cash surged on 17.9%.
AJ Bell Plc has no short term refinancing risk: cash is higher than short term debt (16,565.0%).
Valuation and dividends
AJ Bell Plc's trades at EV/EBITDA 48.5x and P/E 66.9x.
The company paid 88.3% of Net Income as dividends in FY2018.
Management team
30.3% of the company is owned by insiders.
Financial and operational results
FY ended 30 Sep 2018
AJ Bell Plc ($AJB) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 53.493 | 57.038 | 64.466 | 75.576 | 89.691 | 18.7% |
| SG&A | 37.579 | 41.651 | 47.717 | 53.800 | 61.435 | 14.2% |
| EBITDA | 18.103 | 17.428 | 18.835 | 23.833 | 30.227 | 26.8% |
| EBIT | | | | | 28.256 | |
| Tax | | | | | 5.713 | |
| Net Income | 12.523 | 12.329 | 13.440 | 17.571 | 22.646 | 28.9% |
| Stock Based Compensation | | | | | 0.112 | |
Balance Sheet
|
|---|
| Cash | 33.222 | 36.318 | 39.510 | 42.138 | 49.695 | 17.9% |
| Short Term Debt | 0.100 | 0.106 | 0.075 | 0.075 | 0.300 | 300.0% |
| Long Term Debt | 0.203 | 0.109 | 0.882 | 0.068 | 0.431 | 533.8% |
Cash flow
|
|---|
| Capex | 0.650 | 0.343 | 0.604 | 3.476 | 0.951 | -72.6% |
| Dividends | | | | | 20.000 | |
Ratios
|
|---|
| Revenue growth | -6.2% | 6.6% | 13.0% | 17.2% | 18.7% | |
| EBITDA growth | -29.7% | -3.7% | 8.1% | 26.5% | 26.8% | |
|
|---|
| EBITDA Margin | 33.8% | 30.6% | 29.2% | 31.5% | 33.7% | 2.2% |
| EBIT Margin | | | | | 31.5% |
| SG&A, % of revenue | 70.3% | 73.0% | 74.0% | 71.2% | 68.5% | -2.7% |
| SBC, % of revenue | | | | | 0.1% |
| Net Income Margin | 23.4% | 21.6% | 20.8% | 23.2% | 25.2% | 2.0% |
| CAPEX, % of revenue | 1.2% | 0.6% | 0.9% | 4.6% | 1.1% | -3.5% |
|
|---|
| ROIC | 30.5% | 28.5% | 29.8% | 35.4% | 42.2% | 6.7% |
| ROE | 26.1% | 24.3% | 25.2% | 30.4% | 36.1% | 5.7% |
| Net Debt/EBITDA | -1.8x | -2.1x | -2.0x | -1.8x | -1.6x | 0.1x |
People
|
|---|
| Insider ownership | | | | | 30.3% | |
Peers in Asset Management & Custody Ban
Below you can find AJ Bell Plc benchmarking vs. other companies in Asset Management & Custody Ban 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.
Top companies by Revenue growth, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Premier Asset Management Group Plc ($PAM) | | 16.6% | 9.5% | 17.6% | 16.0% |
| |
|---|
| Median (1 company) | | 16.6% | 9.5% | 17.6% | 16.0% |
|---|
| AJ Bell Plc ($AJB) | | 6.6% | 13.0% | 17.2% | 18.7% |
Top companies by EBITDA margin, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Premier Asset Management Group Plc ($PAM) | | | 26.6% | 31.1% | 33.4% |
| |
|---|
| Median (1 company) | | | 26.6% | 31.1% | 33.4% |
|---|
| AJ Bell Plc ($AJB) | 33.8% | 30.6% | 29.2% | 31.5% | 33.7% |
Top companies by CAPEX/Revenue, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Premier Asset Management Group Plc ($PAM) | | | 0.5% | 0.4% | 0.6% |
| |
|---|
| Median (1 company) | | | 0.5% | 0.4% | 0.6% |
|---|
| AJ Bell Plc ($AJB) | 1.2% | 0.6% | 0.9% | 4.6% | 1.1% |
Top companies by ROIC, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Premier Asset Management Group Plc ($PAM) | -103.9% | | | 28.6% | 34.2% |
| |
|---|
| Median (1 company) | -103.9% | | | 28.6% | 34.2% |
|---|
| AJ Bell Plc ($AJB) | 30.5% | 28.5% | 29.8% | 35.4% | 42.2% |
Top companies by Net Debt / EBITDA
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Premier Asset Management Group Plc ($PAM) | | | 3.1x | -1.2x | -1.2x |
| |
|---|
| Median (1 company) | | | 3.1x | -1.2x | -1.2x |
|---|
| AJ Bell Plc ($AJB) | -1.8x | -2.1x | -2.0x | -1.8x | -1.6x |
