Daily Mail & General Trust reports 86.8% Net Income decline in 2019 while 1.9 pp EBITDA Margin growth from 8.2% to 10.1%
05 Dec 2019 • About Daily Mail & General Trust (
$DMGT) • By InTwits
Daily Mail & General Trust reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 10.1% in FY2019, 8.2% in FY2018, -3.7% in FY2017, 9.8% in FY2016, 14.3% in FY2015
- Daily Mail & General Trust has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%. At the same time it's a lot of higher than industry average of 3.3%.
- CAPEX is quite volatile: £16m in FY2019, £268m in FY2018, £21m in FY2017, £27m in FY2016, £29m in FY2015
- The company has potentially unprofitable business model: ROIC is 6.2%
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 showed almost no change in FY2019. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.9 pp from 8.2% to 10.1% in FY2019. During the last 5 years EBITDA Margin bottomed in FY2017 at -3.7% and was growing since that time.
Stock Based Compensation (SBC) as a % of Revenue increased slightly on 0.77 pp from 0.81% to 1.6% in FY2019.
Net Income margin dropped on 44.6 pp from 51.4% to 6.8% in FY2019. The efficient tax rate was 18.3% in FY2019.
Investments (CAPEX, working capital and M&A)
Daily Mail & General Trust's CAPEX/Revenue was 1.2% in FY2019. The company's CAPEX/Revenue showed almost no change from FY2016 to FY2019. It's average level of CAPEX/Revenue for the last three years was 7.5%.
Inventories as a % of Revenue showed almost no change at 2.0% in FY2019.
Daily Mail & General Trust has spent £67m on M&A in FY2019 which accounts for 5.0% of revenue.
Return on investment
The company operates at low ROIC (6.2%) and ROE (7.5%). ROIC increased on 3.3 pp from 2.9% to 6.2% in FY2019. ROE dropped on 46.2 pp from 53.6% to 7.5% in FY2019. During FY2015-FY2019 ROIC bottomed in FY2017 at -11.1% and was growing since that time. ROE followed a declining trend at -14.4 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is -0.6x Net Debt / EBITDA and 1.6x Debt / EBITDA. Debt dropped on 49.9% while cash dropped on 31.7%.
Daily Mail & General Trust has good short term financial stability: Interest coverage ratio (ICR) is 5.0x. Daily Mail & General Trust has no short term refinancing risk: cash is higher than short term debt (2,534.7%).
Average interest expence charged on company's debt was 8.9% in FY2019.
Valuation and dividends
Daily Mail & General Trust's trades at EV/EBITDA 12.3x and P/E 19.2x.
The company paid 301.4% of Net Income as dividends in FY2019.
Management team
Paul A Zwillenberg is a Daily Mail & General Trust's CEO. Paul A Zwillenberg has spent 3 years with the company. CEO total compensation was £7,528,000 in FY2019 which included £1,532,000 salary and £1,277,000 annual bonus. Tim G Collier is a Daily Mail & General Trust's CFO. Tim G Collier has spent 2 years at the company.
The company has 37.8% shares owned by insiders. Insider ownership didn't change in 2019.
At the end of financial year the company had 6,049 employees. The number of employees decreased on 3.5%. Average revenue per employee in FY2019 was £221,028 and it increased on 3.3%.
Financial and operational results
FY ended 30 Sep 2019
Daily Mail & General Trust ($DMGT) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 1,843 | 1,917 | 1,564 | 1,341 | 1,337 | -0.3% |
| SG&A | | 59 | | | | |
| EBITDA | 264 | 188 | -59 | 110 | 135 | 23.1% |
| EBIT | | | | 50 | 95 | 90.0% |
| Interest expence | | | | 36 | 19 | -46.9% |
| Tax | | | | 8 | 20 | 168.4% |
| Net Income | 217 | 204 | 345 | 689 | 91 | -86.8% |
| Stock Based Compensation | | | | 11 | 21 | 95.4% |
Balance Sheet
|
|---|
| Cash | 32 | 26 | 15 | 438 | 299 | -31.7% |
| Inventory | | | | 32 | 27 | -14.9% |
| Short Term Debt | 3 | 17 | 9 | 222 | 12 | -94.7% |
| Long Term Debt | 727 | 694 | 470 | 206 | 203 | -1.4% |
Cash flow
|
|---|
| Capex | 29 | 27 | 21 | 268 | 16 | -94.1% |
| Dividends | | | | 81 | 274 | 238.3% |
| Acquisitions | | | | 21 | 67 | 220.6% |
Ratios
|
|---|
| Revenue growth | 1.7% | 4.0% | -18.4% | -14.3% | -0.3% | |
| EBITDA growth | 12.9% | -28.9% | -131.2% | -287.7% | 23.1% | |
|
|---|
| EBITDA Margin | 14.3% | 9.8% | -3.7% | 8.2% | 10.1% | 1.9% |
| EBIT Margin | | | | 3.7% | 7.1% | 3.4% |
| SG&A, % of revenue | | 3.1% | | | | |
| SBC, % of revenue | | | | 0.8% | 1.6% | 0.8% |
| Net Income Margin | 11.8% | 10.7% | 22.1% | 51.4% | 6.8% | -44.6% |
| CAPEX, % of revenue | 1.6% | 1.4% | 1.3% | 20.0% | 1.2% | -18.8% |
|
|---|
| ROIC | 21.4% | 11.4% | -11.1% | 2.9% | 6.2% | 3.3% |
| ROE | 75.0% | 62.3% | 54.8% | 53.6% | 7.5% | -46.2% |
| Net Debt/EBITDA | 2.7x | 3.7x | | -0.1x | -0.6x | -0.5x |
| Interest coverage ratio (ICR) | | | | 1.4x | 5.0x | 3.6x |
| Interest expence / Average debt | | | | 7.9% | 8.9% | 1.0% |
People
|
|---|
| Insider ownership | | | | 37.8% | 37.8% | 0.0% |
| Employees | | | | 6,267 | 6,049 | -3.5% |
| Revenue/Employee, th. £ | | | | 214 | 221 | 3.3% |
Peers in Media
Below we provide Daily Mail & General Trust benchmarking against other companies in Media 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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Future ($FUTR) | -9.4% | -1.3% | 43.1% | 47.6% | |
| Uls Technology ($ULS) | -1.0% | 28.0% | 7.8% | 37.8% | |
| Ite Group ($ITE) | -22.3% | -1.0% | 13.5% | 15.1% | |
| Haynes Publishing Group ($HYNS) | -11.0% | -1.4% | 15.8% | 13.5% | |
| Ten Alps ($TAL) | | 25.5% | -12.7% | 9.8% | |
| |
|---|
| Median (10 companies) | 0.8% | 3.4% | 3.1% | 9.5% | |
|---|
| Daily Mail & General Trust ($DMGT) | | 4.0% | -18.4% | -14.3% | -0.3% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Brainjuicer Group ($BJU) | 80.4% | 82.1% | | 82.5% | |
| Jaywing ($JWNG) | 89.0% | 88.4% | 80.8% | 77.2% | |
| Reed Elsevier ($REL) | 64.3% | 63.9% | 64.2% | 64.7% | |
| Haynes Publishing Group ($HYNS) | 60.2% | 53.6% | 56.4% | 59.6% | |
| Future ($FUTR) | 32.1% | 36.9% | 40.2% | 44.4% | |
| |
|---|
| Median (10 companies) | 41.8% | 40.2% | 40.2% | 42.5% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Haynes Publishing Group ($HYNS) | 33.5% | 15.4% | 35.0% | 36.8% | |
| Reed Elsevier ($REL) | 32.7% | 33.9% | 34.4% | 34.5% | |
| Uls Technology ($ULS) | 21.1% | 19.8% | 21.2% | 13.8% | |
| Dods(Group ($DODS) | 0.6% | 12.3% | 15.9% | 12.3% | |
| Future ($FUTR) | 1.8% | -20.0% | 6.2% | 10.6% | |
| |
|---|
| Median (11 companies) | 11.2% | 7.0% | 6.8% | 8.8% | |
|---|
| Daily Mail & General Trust ($DMGT) | 14.3% | 9.8% | -3.7% | 8.2% | 10.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Ite Group ($ITE) | 1.3% | 1.8% | 2.1% | 2.4% | |
| Naspers ($NPSN) | 4.0% | 3.1% | 2.5% | 2.0% | |
| Jaywing ($JWNG) | 1.3% | 1.3% | 1.8% | 1.8% | |
| Haynes Publishing Group ($HYNS) | 1.6% | 1.0% | 1.4% | 1.5% | |
| Dods(Group ($DODS) | 0.4% | 0.6% | 12.7% | 1.3% | |
| |
|---|
| Median (11 companies) | 1.1% | 0.7% | 0.8% | 1.0% | |
|---|
| Daily Mail & General Trust ($DMGT) | 1.6% | 1.4% | 1.3% | 20.0% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Brainjuicer Group ($BJU) | 58.5% | 72.5% | 0.0% | 24.7% | |
| Reed Elsevier ($REL) | 21.4% | 21.4% | 21.4% | 21.0% | |
| Uls Technology ($ULS) | 39.6% | 39.3% | 31.3% | 19.1% | |
| Haynes Publishing Group ($HYNS) | 9.4% | -8.0% | 14.5% | 18.2% | |
| Dods(Group ($DODS) | -12.1% | 4.4% | 7.1% | 4.5% | |
| |
|---|
| Median (13 companies) | 6.7% | 1.4% | 0.8% | 1.7% | |
|---|
| Daily Mail & General Trust ($DMGT) | 21.4% | 11.4% | -11.1% | 2.9% | 6.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Ite Group ($ITE) | 1.4x | 6.3x | 7.3x | 12.7x | |
| Jaywing ($JWNG) | 1.9x | 1.6x | 1.6x | 3.8x | |
| Reed Elsevier ($REL) | 1.9x | 2.2x | 2.0x | 2.4x | |
| Future ($FUTR) | 1.6x | | 1.9x | 1.3x | |
| Uls Technology ($ULS) | -0.4x | -0.7x | 0.7x | 0.4x | |
| |
|---|
| Median (10 companies) | 1.1x | -0.1x | 0.6x | 0.3x | |
|---|
| Daily Mail & General Trust ($DMGT) | 2.7x | 3.7x | | -0.1x | -0.6x |
