Titon Hldgs reports 29.1% Net Income decline in 2019 and 8.8% Revenue decline
12 Dec 2019 • About Titon Hldgs (
$TON) • By InTwits
Titon Hldgs reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is relatively stable: 8.8% in FY2019 vs. 9.0% in FY2018 vs. 9.5% in FY2015
- Titon Hldgs has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's in pair with industry average of 1.8%
- CAPEX is quite volatile: £1m in FY2019, £0m in FY2018, £0m in FY2017, £0m in FY2016, £1m in FY2015
- The company has business model with low profitability: ROIC is 9.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 8.8%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.95 pp from 5.5% to 6.4% in FY2019.
Gross Margin increased slightly on 1.3 pp from 28.9% to 30.2% in FY2019. SG&A as a % of Revenue increased slightly on 1.0 pp from 20.7% to 21.7% in FY2019. SG&A as a % of Revenue grew at 1.3 pp per annum in FY2015-FY2019.
Net Income margin decreased slightly on 1.5 pp from 6.7% to 5.2% in FY2019.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.6% in FY2019. The company's CAPEX/Revenue showed almost no change from FY2016 to FY2019. It's average level of CAPEX/Revenue for the last three years was 2.1%.
Return on investment
The company operates at low ROIC (9.5%) and ROE (9.0%). ROIC decreased on 2.8 pp from 12.2% to 9.5% in FY2019. ROE decreased on 4.6 pp from 13.5% to 9.0% in FY2019. ROIC stuck to a declining trend at -0.96 pp per annum in FY2015-FY2019.
Leverage (Debt)
The company has no debt. Cash surged on 34.3%.
Valuation and dividends
Titon Hldgs's trades at EV/EBITDA 3.9x and P/E 9.9x.
Financial and operational results
FY ended 30 Nov -0001
Titon Hldgs ($TON) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 22.258 | 23.721 | 28.011 | 29.774 | 27.157 | -8.8% |
| Gross Profit | 6.513 | 7.048 | 7.265 | 8.604 | 8.198 | -4.7% |
| SG&A | 3.799 | 3.998 | 4.966 | 6.161 | 5.904 | -4.2% |
| EBITDA | 2.124 | 2.328 | 2.463 | 2.673 | 2.400 | -10.2% |
| Net Income | 1.333 | 1.635 | 1.804 | 2.007 | 1.423 | -29.1% |
Balance Sheet
|
|---|
| Cash | 2.870 | 2.438 | 3.269 | 3.415 | 4.587 | 34.3% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.498 | 0.721 | 0.520 | 0.578 | 0.694 | 20.1% |
Ratios
|
|---|
| Revenue growth | 15.6% | 6.6% | 18.1% | 6.3% | -8.8% | |
| EBITDA growth | 25.8% | 9.6% | 5.8% | 8.5% | -10.2% | |
|
|---|
| Gross Margin | 29.3% | 29.7% | 25.9% | 28.9% | 30.2% | 1.3% |
| EBITDA Margin | 9.5% | 9.8% | 8.8% | 9.0% | 8.8% | -0.1% |
| SG&A, % of revenue | 17.1% | 16.9% | 17.7% | 20.7% | 21.7% | 1.0% |
| Net Income Margin | 6.0% | 6.9% | 6.4% | 6.7% | 5.2% | -1.5% |
| CAPEX, % of revenue | 2.2% | 3.0% | 1.9% | 1.9% | 2.6% | 0.6% |
|
|---|
| ROIC | 13.7% | 13.3% | 12.0% | 12.2% | 9.5% | -2.8% |
| ROE | 12.7% | 13.6% | 13.2% | 13.5% | 9.0% | -4.6% |
| Net Debt/EBITDA | -1.4x | -1.0x | -1.3x | -1.3x | -1.9x | -0.6x |
Peers in Construction & Materials
Below you can find Titon Hldgs benchmarking vs. other companies in Construction & Materials 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 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Lucky Cement Ltd ($LKCS) | 1.2% | -0.1% | 6.5% | 11.6% | |
| Heath(Samuel)& Sons ($HSM) | 2.0% | 12.4% | 3.7% | 10.0% | |
| Accsys Technologies ($AXS) | 37.5% | 14.5% | 7.1% | 7.8% | |
| James Halstead ($JHD) | 1.7% | -0.5% | 6.5% | 3.6% | |
| Alumasc Group ($ALU) | 1.6% | 2.1% | 13.6% | -6.1% | |
| |
|---|
| Median (7 companies) | 1.6% | 5.3% | 7.1% | 3.6% | |
|---|
| Titon Hldgs ($TON) | | 6.6% | 18.1% | 6.3% | -8.8% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Heath(Samuel)& Sons ($HSM) | 47.6% | 48.1% | 51.1% | 49.6% | |
| James Halstead ($JHD) | 41.7% | 42.4% | 43.5% | 41.9% | |
| Alumasc Group ($ALU) | 32.7% | 33.4% | 31.3% | 30.6% | |
| Lucky Cement Ltd ($LKCS) | 31.3% | 33.9% | 33.1% | 26.2% | |
| Smart(J.)& Co(Contractors) ($SMJ) | 13.2% | 13.0% | 15.1% | 23.8% | |
| |
|---|
| Median (6 companies) | 29.1% | 30.0% | 27.6% | 28.4% | |
|---|
| Titon Hldgs ($TON) | 29.3% | 29.7% | 25.9% | 28.9% | 30.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Smart(J.)& Co(Contractors) ($SMJ) | 12.3% | 13.7% | 18.6% | 46.8% | |
| Lucky Cement Ltd ($LKCS) | 26.5% | 30.4% | 29.7% | 22.4% | |
| Heath(Samuel)& Sons ($HSM) | 10.2% | 12.1% | 13.6% | 12.2% | |
| Alumasc Group ($ALU) | 9.7% | 9.7% | 9.8% | 7.8% | |
| Accsys Technologies ($AXS) | -2.8% | 4.6% | -2.6% | -7.9% | |
| |
|---|
| Median (6 companies) | 9.7% | 11.9% | 9.8% | 10.0% | -5,230.1% |
|---|
| Titon Hldgs ($TON) | 9.5% | 9.8% | 8.8% | 9.0% | 8.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Accsys Technologies ($AXS) | 2.0% | 4.9% | 11.3% | 48.5% | |
| Lucky Cement Ltd ($LKCS) | 12.0% | 9.0% | 13.0% | 20.3% | |
| Smart(J.)& Co(Contractors) ($SMJ) | 2.3% | 1.7% | 2.1% | 4.3% | |
| Alumasc Group ($ALU) | 1.2% | 1.1% | 0.9% | 3.1% | |
| Heath(Samuel)& Sons ($HSM) | 2.0% | 3.1% | 4.9% | 1.5% | |
| |
|---|
| Median (7 companies) | 2.3% | 2.7% | 2.3% | 3.1% | 0.0% |
|---|
| Titon Hldgs ($TON) | 2.2% | 3.0% | 1.9% | 1.9% | 2.6% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| James Halstead ($JHD) | 45.3% | 47.1% | 46.5% | 39.9% | |
| Heath(Samuel)& Sons ($HSM) | 32.0% | 89.2% | 54.2% | 35.4% | |
| Alumasc Group ($ALU) | 36.0% | 47.8% | 50.2% | 23.1% | |
| Lucky Cement Ltd ($LKCS) | 20.0% | 20.6% | 18.6% | 12.5% | |
| Smart(J.)& Co(Contractors) ($SMJ) | 2.1% | 3.4% | 3.7% | 4.2% | |
| |
|---|
| Median (17 companies) | 6.4% | 8.2% | 8.6% | 4.2% | -22.9% |
|---|
| Titon Hldgs ($TON) | 13.7% | 13.3% | 12.0% | 12.2% | 9.5% |
Top companies by Net Debt / EBITDA
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Alumasc Group ($ALU) | -0.1x | -1.0x | -0.6x | 0.6x | |
| Lucky Cement Ltd ($LKCS) | -0.3x | -0.7x | -1.0x | -0.7x | |
| Heath(Samuel)& Sons ($HSM) | -1.4x | -1.4x | -1.2x | -1.3x | |
| Smart(J.)& Co(Contractors) ($SMJ) | -5.2x | -3.6x | -4.2x | -2.4x | |
| |
|---|
| Median (4 companies) | -0.0x | -0.7x | -0.4x | -1.0x | |
|---|
| Titon Hldgs ($TON) | -1.4x | -1.0x | -1.3x | -1.3x | -1.9x |
