Nexus Infrastructure Plc Net Income dropped on 42.8% while Revenue jumped on 14.9%
10 Dec 2019 • About Nexus Infrastructure Plc (
$NEXS) • By InTwits
Nexus Infrastructure Plc reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- Nexus Infrastructure Plc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's in pair with industry average of 1.3%
- CAPEX is quite volatile: £2m in FY2019, £1m in FY2018, £4m in FY2017, £1m in FY2016, £1m in FY2015
- The company has highly profitable business model: ROIC is 18.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Nexus Infrastructure Plc's Revenue surged on 14.9%. During FY2015-FY2019 Revenue growth bottomed in FY2017 at -0.51% and was accelerating since that time. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.7 pp from 8.0% to 5.3% in FY2019.
Gross Margin decreased on 2.5 pp from 20.5% to 18.0% in FY2019. During FY2015-FY2019 Gross Margin topped in FY2018 at 20.5%. SG&A as a % of Revenue increased slightly on 0.65 pp from 13.5% to 14.1% in FY2019. SG&A as a % of Revenue stuck to a growing trend at 1.1 pp per annum in FY2015-FY2019. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2019.
Net Income margin decreased on 2.7 pp from 5.4% to 2.7% in FY2019. The efficient tax rate was 26.8% in FY2019.
Investments (CAPEX, working capital and M&A)
In FY2019 the company had CAPEX/Revenue of 1.3%. The company's CAPEX/Revenue increased slightly on 0.53 pp from 0.77% in FY2016 to 1.3% in FY2019. For the last three years the average CAPEX/Revenue was 1.6%.
Inventories as a % of Revenue decreased on 2.2 pp from 2.5% to 0.24% in FY2019.
Return on investment
The company operates at good ROIC (18.5%) and ROE (18.5%). ROIC dropped on 12.4 pp from 30.9% to 18.5% in FY2019. ROE dropped on 19.1 pp from 37.6% to 18.5% in FY2019. ROIC stuck to a declining trend at -7.7 pp per annum in FY2015-FY2019. During FY2015-FY2019 ROE topped in FY2016 at 56.7% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.2x and Debt / EBITDA is 1.1x. Debt surged on 33.7% while cash increased on 3.6%.
Nexus Infrastructure Plc has good short term financial stability: Interest coverage ratio (ICR) is 17.7x. Nexus Infrastructure Plc has no short term refinancing risk: cash is higher than short term debt (790.7%).
Average interest expence charged on company's debt was 3.6% in FY2019.
Valuation and dividends
The company's trades at EV/EBITDA 6.5x and P/E 17.1x.
The company paid 71.9% of Net Income as dividends in FY2019.
Management team
Insider ownership is 26.6%. Insider ownership didn't change in 2019.
Financial and operational results
FY ended 30 Nov -0001
Nexus Infrastructure Plc ($NEXS) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 130.9 | 135.7 | 135.0 | 134.9 | 155.1 | 14.9% |
| Gross Profit | 20.6 | 26.3 | 27.2 | 27.6 | 27.9 | 1.0% |
| SG&A | 12.5 | 15.9 | 17.9 | 18.2 | 21.9 | 20.5% |
| EBITDA | 9.3 | 11.6 | 10.7 | 10.8 | 8.2 | -24.1% |
| EBIT | | | | 9.4 | 6.0 | -36.5% |
| Interest expence | | | | 0.5 | 0.3 | -26.6% |
| Tax | | | | 1.9 | 1.5 | -20.2% |
| Net Income | 6.3 | 8.4 | 5.8 | 7.3 | 4.2 | -42.8% |
| Stock Based Compensation | | | | -0.1 | 0.6 | |
Balance Sheet
|
|---|
| Cash | 27.7 | 34.0 | 27.1 | 26.4 | 27.4 | 3.6% |
| Inventory | | | | 3.3 | 0.4 | -88.6% |
| Short Term Debt | 1.0 | 2.6 | 2.7 | 2.4 | 3.5 | 42.4% |
| Long Term Debt | 0.2 | 8.8 | 7.0 | 4.6 | 5.9 | 29.1% |
Cash flow
|
|---|
| Capex | 0.6 | 1.1 | 4.1 | 0.8 | 2.0 | 148.0% |
| Dividends | | | | 2.0 | 3.0 | 50.0% |
Ratios
|
|---|
| Revenue growth | 20.8% | 3.7% | -0.5% | -0.1% | 14.9% | |
| EBITDA growth | 27.0% | 25.2% | -7.8% | 0.3% | -24.1% | |
|
|---|
| Gross Margin | 15.8% | 19.4% | 20.2% | 20.5% | 18.0% | -2.5% |
| EBITDA Margin | 7.1% | 8.6% | 7.9% | 8.0% | 5.3% | -2.7% |
| EBIT Margin | | | | 7.0% | 3.9% | -3.1% |
| SG&A, % of revenue | 9.6% | 11.7% | 13.3% | 13.5% | 14.1% | 0.7% |
| SBC, % of revenue | | | | -0.0% | 0.4% | 0.4% |
| Net Income Margin | 4.8% | 6.2% | 4.3% | 5.4% | 2.7% | -2.7% |
| CAPEX, % of revenue | 0.4% | 0.8% | 3.0% | 0.6% | 1.3% | 0.7% |
|
|---|
| ROIC | 49.5% | 45.3% | 32.5% | 30.9% | 18.5% | -12.4% |
| ROE | 44.5% | 56.7% | 38.4% | 37.6% | 18.5% | -19.1% |
| Net Debt/EBITDA | -2.9x | -1.9x | -1.6x | -1.8x | -2.2x | -0.4x |
| Interest expence / Average debt | | | | 5.5% | 3.6% | -1.9% |
People
|
|---|
| Insider ownership | | | | 26.6% | 26.6% | 0.0% |
| Employees | | | | 886 | | |
| Revenue/Employee, th. £ | | | | 152 | | |
Peers in Construction & Engineering
Below we provide Nexus Infrastructure Plc benchmarking against other companies in Construction & Engineering 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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Larsen & Toubro ($LTOD) | 6.0% | 11.7% | 7.6% | 9.5% | |
| Electrosteel Castings ($ECS) | 1.5% | -8.2% | -5.7% | 3.6% | |
| Hindustan Construction Co ($HIN) | 7.9% | -17.5% | 15.5% | 2.7% | |
| |
|---|
| Median (3 companies) | 6.0% | -8.2% | 7.6% | 3.6% | |
|---|
| Nexus Infrastructure Plc ($NEXS) | | 3.7% | -0.5% | -0.1% | 14.9% |
Top companies by EBITDA margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Larsen & Toubro ($LTOD) | 12.8% | 10.5% | 10.3% | 16.6% | |
| Electrosteel Castings ($ECS) | 12.8% | 12.3% | 13.9% | 11.9% | |
| Hindustan Construction Co ($HIN) | 12.0% | 13.5% | 7.9% | 7.7% | |
| |
|---|
| Median (3 companies) | 12.8% | 12.3% | 10.3% | 11.9% | |
|---|
| Nexus Infrastructure Plc ($NEXS) | 7.1% | 8.6% | 7.9% | 8.0% | 5.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Larsen & Toubro ($LTOD) | 7.0% | 4.3% | 2.8% | 2.4% | |
| Electrosteel Castings ($ECS) | 5.8% | 1.7% | 1.5% | 1.4% | |
| Hindustan Construction Co ($HIN) | 9.2% | 1.1% | 2.5% | 0.0% | |
| |
|---|
| Median (3 companies) | 7.0% | 1.7% | 2.5% | 1.4% | |
|---|
| Nexus Infrastructure Plc ($NEXS) | 0.4% | 0.8% | 3.0% | 0.6% | 1.3% |
Top companies by ROIC, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Hindustan Construction Co ($HIN) | 7.4% | 8.9% | 8.2% | 11.7% | |
| Larsen & Toubro ($LTOD) | 6.8% | 6.3% | 6.1% | 11.0% | |
| Electrosteel Castings ($ECS) | 5.0% | 4.6% | 4.6% | 4.5% | |
| |
|---|
| Median (3 companies) | 6.8% | 6.3% | 6.1% | 11.0% | |
|---|
| Nexus Infrastructure Plc ($NEXS) | 49.5% | 45.3% | 32.5% | 30.9% | 18.5% |
Top companies by Net Debt / EBITDA
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Larsen & Toubro ($LTOD) | 7.4x | 7.9x | 8.0x | 5.1x | |
| Hindustan Construction Co ($HIN) | 9.3x | 6.4x | 8.5x | 4.9x | |
| Electrosteel Castings ($ECS) | 8.0x | 6.9x | 5.2x | 4.6x | |
| |
|---|
| Median (3 companies) | 8.0x | 6.9x | 8.0x | 4.9x | |
|---|
| Nexus Infrastructure Plc ($NEXS) | -2.9x | -1.9x | -1.6x | -1.8x | -2.2x |
