Caretech Hldgs revenue surged on 113% while EBITDA Margin decreased on 2.8 pp from 18.1% to 15.3%
12 Dec 2019 • About Caretech Hldgs (
$CTH) • By InTwits
Caretech Hldgs reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Caretech Hldgs is a fast growth stock: FY2019 revenue growth was 113%, 5 year revenue CAGR was 26.2% at FY2019 ROIC 7.0%
- EBITDA Margin is declining: 15.3% in FY2019 vs. 18.1% in FY2018 vs. 26.1% in FY2015
- Caretech Hldgs has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.3%. At the same time it's in pair with industry average of 8.0%
- CAPEX is quite volatile: £28m in FY2019, £15m in FY2018, £16m in FY2017, £11m in FY2016, £6m in FY2015
- The company has business model with low profitability: ROIC is 7.0%
- It operates with high leverage: Net Debt/EBITDA is 4.8x while industry average is -0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Caretech Hldgs's Revenue surged on 113%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.9 pp from 8.2% to 10.1% in FY2019. EBITDA Margin stuck to a declining trend at -3.1 pp per annum in the last 5 years.
Gross Margin decreased slightly on 1.5 pp from 35.2% to 33.7% in FY2019. Gross Margin followed a declining trend at -1.1 pp per annum in the last 5 years. SG&A as a % of Revenue decreased slightly on 0.63 pp from 24.3% to 23.7% in FY2019. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2019.
Net Income margin decreased slightly on 0.75 pp from 5.7% to 5.0% in FY2019. During the last 5 years Net Income margin topped in FY2016 at 15.4% and was declining since that time. The efficient tax rate was 17.6% in FY2019.
Investments (CAPEX, working capital and M&A)
In FY2019 the company had CAPEX/Revenue of 7.0%. Caretech Hldgs showed almost no change in CAPEX/Revenue from FY2016 to FY2019. Average CAPEX/Revenue for the last three years was 8.1%. During FY2015-FY2019 CAPEX as a % of Revenue topped in FY2017 at 9.6% and was declining since that time.
Inventories as a % of Revenue showed almost no change at 0.25% in FY2019.
Caretech Hldgs has spent £160m on M&A in FY2019 which accounts for 40.6% of revenue.
Return on investment
The company operates at low ROIC (7.0%) and ROE (7.3%). ROIC increased slightly on 1.8 pp from 5.3% to 7.0% in FY2019. ROE increased on 2.1 pp from 5.2% to 7.3% in FY2019.
Leverage (Debt)
Debt level is 4.8x Net Debt / EBITDA and 5.3x Debt / EBITDA. Net Debt / EBITDA jumped on 0.4x from 4.4x to 4.8x in FY2019. Debt surged on 105% while cash surged on 210%. During FY2015-FY2019 Net Debt/EBITDA bottomed in FY2016 at 3.8x and was growing since that time.
Caretech Hldgs has good short term financial stability: Interest coverage ratio (ICR) is 2.6x. Caretech Hldgs has no short term refinancing risk: cash is higher than short term debt (1,758.1%).
Average interest expence charged on company's debt was 4.7% in FY2019.
Valuation and dividends
The company's trades at EV/EBITDA 12.4x and P/E 23.2x.
The company paid 55.8% of Net Income as dividends in FY2019.
Management team
Insider ownership is 0.82%. Insider ownership didn't change in 2019.
Financial and operational results
FY ended 30 Sep 2019
Caretech Hldgs ($CTH) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 124.3 | 149.0 | 166.0 | 185.7 | 395.0 | 112.7% |
| Gross Profit | 47.7 | 54.3 | 59.9 | 65.3 | 133.0 | 103.6% |
| SG&A | 29.9 | 23.8 | 37.2 | 45.1 | 93.5 | 107.2% |
| EBITDA | 32.4 | 41.2 | 35.4 | 33.5 | 60.3 | 79.9% |
| EBIT | | | | 20.2 | 39.5 | 95.6% |
| Interest expence | | | | 4.8 | 15.1 | 214.3% |
| Tax | | | | 4.1 | 4.2 | 2.1% |
| Net Income | 8.0 | 22.9 | 17.8 | 10.6 | 19.7 | 85.0% |
| Stock Based Compensation | | | | 0.2 | 0.1 | -69.5% |
Balance Sheet
|
|---|
| Cash | 3.7 | 4.3 | 6.4 | 9.4 | 29.2 | 210.3% |
| Inventory | | | | 0.9 | 1.0 | 11.1% |
| Short Term Debt | 1.9 | 7.0 | 7.7 | 153.8 | 1.7 | -98.9% |
| Long Term Debt | 160.3 | 153.7 | 145.9 | 2.6 | 318.7 | 12,250.9% |
Cash flow
|
|---|
| Capex | 6.0 | 10.8 | 15.9 | 14.5 | 27.8 | 91.5% |
| Dividends | | | | 7.0 | 11.0 | 57.1% |
| Acquisitions | | | | 0.1 | 160.3 | 222,498.6% |
Ratios
|
|---|
| Revenue growth | 0.8% | 19.9% | 11.4% | 11.8% | 112.7% | |
| EBITDA growth | 6.0% | 27.1% | -14.2% | -5.3% | 79.9% | |
|
|---|
| Gross Margin | 38.4% | 36.4% | 36.1% | 35.2% | 33.7% | -1.5% |
| EBITDA Margin | 26.1% | 27.7% | 21.3% | 18.1% | 15.3% | -2.8% |
| EBIT Margin | | | | 10.9% | 10.0% | -0.9% |
| SG&A, % of revenue | 24.0% | 16.0% | 22.4% | 24.3% | 23.7% | -0.6% |
| SBC, % of revenue | | | | 0.1% | 0.0% | -0.1% |
| Net Income Margin | 6.4% | 15.4% | 10.8% | 5.7% | 5.0% | -0.7% |
| CAPEX, % of revenue | 4.8% | 7.2% | 9.6% | 7.8% | 7.0% | -0.8% |
|
|---|
| ROIC | 7.6% | 9.4% | 6.4% | 5.3% | 7.0% | 1.8% |
| ROE | 6.6% | 16.0% | 10.0% | 5.2% | 7.3% | 2.1% |
| Net Debt/EBITDA | 4.9x | 3.8x | 4.2x | 4.4x | 4.8x | 0.4x |
| Interest coverage ratio (ICR) | | | | 4.2x | 2.6x | -1.6x |
| Interest expence / Average debt | | | | 3.1% | 4.7% | 1.6% |
People
|
|---|
| Insider ownership | | | | 0.8% | 0.8% | 0.0% |
| Employees | | | | 5,439 | | |
| Revenue/Employee, th. £ | | | | 34 | | |
Peers in Health Care Equipment & Services
Below you can find Caretech Hldgs benchmarking vs. other companies in Health Care Equipment & Services 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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Abbott Laboratories ($ABT) | 0.8% | 2.2% | 31.3% | 11.6% | |
| Tristel ($TSTL) | 13.8% | 11.5% | 18.5% | 9.6% | |
| Omega Diagnostics Group ($ODX) | 4.4% | 5.3% | 11.8% | -4.9% | |
| Immunodiagnostic Systems Hldgs ($IDH) | -13.2% | -15.6% | 4.5% | -5.2% | |
| |
|---|
| Median (4 companies) | 5.9% | 3.7% | 11.0% | 2.4% | |
|---|
| Caretech Hldgs ($CTH) | | 19.9% | 11.4% | 11.8% | 112.7% |
Top companies by Gross margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Tristel ($TSTL) | 69.5% | 73.4% | 77.3% | 77.3% | |
| Omega Diagnostics Group ($ODX) | 63.4% | 63.8% | 64.7% | 60.5% | |
| Abbott Laboratories ($ABT) | 57.1% | 56.7% | 55.0% | 58.4% | |
| Immunodiagnostic Systems Hldgs ($IDH) | 62.5% | 58.6% | 57.4% | 47.5% | |
| |
|---|
| Median (4 companies) | 57.1% | 58.6% | 56.2% | 59.4% | |
|---|
| Caretech Hldgs ($CTH) | 38.4% | 36.4% | 36.1% | 35.2% | 33.7% |
Top companies by EBITDA margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Tristel ($TSTL) | 22.9% | 20.7% | 25.4% | 24.7% | |
| Abbott Laboratories ($ABT) | 21.3% | 22.6% | 20.7% | 22.8% | |
| Immunodiagnostic Systems Hldgs ($IDH) | 23.6% | -77.1% | 16.8% | 14.7% | |
| Omega Diagnostics Group ($ODX) | 11.4% | 10.2% | 8.6% | -45.5% | |
| |
|---|
| Median (4 companies) | 19.5% | 11.5% | 19.8% | 18.7% | |
|---|
| Caretech Hldgs ($CTH) | 26.1% | 27.7% | 21.3% | 18.1% | 15.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Immunodiagnostic Systems Hldgs ($IDH) | 6.3% | 4.7% | 3.7% | 4.6% | |
| Abbott Laboratories ($ABT) | 5.4% | 5.4% | 4.1% | 4.6% | |
| Omega Diagnostics Group ($ODX) | 5.8% | 4.9% | 4.2% | 3.5% | |
| Tristel ($TSTL) | 3.2% | 2.9% | 2.9% | 2.3% | |
| |
|---|
| Median (4 companies) | 6.3% | 4.9% | 3.9% | 4.0% | |
|---|
| Caretech Hldgs ($CTH) | 4.8% | 7.2% | 9.6% | 7.8% | 7.0% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Tristel ($TSTL) | 20.1% | 17.5% | 24.9% | 23.1% | |
| Abbott Laboratories ($ABT) | 9.4% | 8.6% | 3.4% | 6.6% | |
| Immunodiagnostic Systems Hldgs ($IDH) | 4.3% | -51.3% | 3.6% | 1.7% | |
| Omega Diagnostics Group ($ODX) | 3.6% | 3.3% | 2.9% | -33.6% | |
| Lifeline Scientific Inc ($LSIC) | 24.0% | | | | |
| |
|---|
| Median (6 companies) | 6.7% | 2.0% | 5.3% | 4.2% | |
|---|
| Caretech Hldgs ($CTH) | 7.6% | 9.4% | 6.4% | 5.3% | 7.0% |
Top companies by Net Debt / EBITDA
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Abbott Laboratories ($ABT) | 0.9x | 0.7x | 3.3x | 2.3x | |
| Tristel ($TSTL) | -1.2x | -1.6x | -1.0x | -1.2x | |
| Immunodiagnostic Systems Hldgs ($IDH) | -2.1x | | -4.5x | -4.9x | |
| |
|---|
| Median (3 companies) | -1.0x | -0.6x | -0.7x | -1.2x | |
|---|
| Caretech Hldgs ($CTH) | 4.9x | 3.8x | 4.2x | 4.4x | 4.8x |
