Jersey Electricity reports 5.8% CAPEX decline in 2019 while 4.2% Revenue growth
20 Dec 2019 • About Jersey Electricity (
$JEL) • By InTwits
Jersey Electricity reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Jersey Electricity has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.7%. At the same time it's in pair with industry average of 44.1%
- CAPEX is quite volatile: £14m in FY2019, £15m in FY2018, £14m in FY2017, £32m in FY2016, £17m in FY2015
- The company has potentially unprofitable business model: ROIC is 6.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Jersey Electricity's Revenue increased on 4.2%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 176 pp from -191% to -368% in FY2019.
Gross Margin decreased slightly on 1.3 pp from 38.5% to 37.2% in FY2019. During the last 5 years Gross Margin topped in FY2018 at 38.5%. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2019.
Net Income margin decreased slightly on 0.77 pp from 11.4% to 10.7% in FY2019. The efficient tax rate was 20.1% in FY2019.
Investments (CAPEX, working capital and M&A)
In FY2019 the company had CAPEX/Revenue of 12.6%. Jersey Electricity's CAPEX/Revenue dropped on 18.8 pp from 31.3% in FY2016 to 12.6% in FY2019. For the last three years the average CAPEX/Revenue was 13.5%. Jersey Electricity invested a large share of EBITDA (50.0%) to CAPEX. During the last 5 years CAPEX as a % of Revenue topped in FY2016 at 31.3% and was declining since that time.
Inventories as a % of Revenue decreased slightly on 1.2 pp from 6.7% to 5.5% in FY2019.
Return on investment
The company operates at low ROIC (6.4%) and ROE (6.1%). ROIC decreased slightly on 0.63 pp from 7.0% to 6.4% in FY2019. ROE decreased slightly on 0.57 pp from 6.6% to 6.1% in FY2019.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.2x and Debt / EBITDA is 1.1x. Net Debt / EBITDA dropped on 0.3x from 0.5x to 0.2x in FY2019. Debt increased slightly on 0.78% while cash surged on 58.3%. During FY2015-FY2019 Net Debt/EBITDA topped in FY2016 at 1.1x and was declining since that time.
The company has no short term refinancing risk: short term debt is zero.
Valuation and dividends
The company's trades at EV/EBITDA 2.0x and P/E 4.2x.
The company paid 42.5% of Net Income as dividends in FY2019.
Management team
The company has 0.46% shares owned by insiders. Insider ownership didn't change in 2019.
Financial and operational results
FY ended 30 Nov -0001
Jersey Electricity ($JEL) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 100.5 | 103.4 | 102.1 | 105.9 | 110.3 | 4.2% |
| Gross Profit | 35.9 | 38.1 | 39.1 | 40.8 | 41.0 | 0.6% |
| SG&A | 10.6 | 12.3 | 24.4 | 24.4 | | |
| EBITDA | 23.9 | 26.2 | 25.4 | 27.9 | 27.7 | -0.9% |
| EBIT | | | | 16.7 | 16.1 | -3.7% |
| Tax | | | | 3.2 | 3.0 | -5.8% |
| Net Income | 10.7 | 11.5 | 10.6 | 12.1 | 11.8 | -2.8% |
| Stock Based Compensation | | | | 0.1 | 0.0 | -69.2% |
Balance Sheet
|
|---|
| Cash | 12.5 | 1.9 | 8.1 | 15.7 | 24.9 | 58.3% |
| Inventory | | | | 7.1 | 6.0 | -15.1% |
| Short Term Debt | 0.0 | 0.9 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 30.0 | 30.0 | 30.0 | 30.0 | 30.2 | 0.8% |
Cash flow
|
|---|
| Capex | 16.6 | 32.4 | 14.3 | 14.7 | 13.9 | -5.8% |
| Dividends | | | | 4.0 | 5.0 | 25.0% |
Ratios
|
|---|
| Revenue growth | 2.1% | 2.9% | -1.2% | 3.7% | 4.2% | |
| EBITDA growth | 31.5% | 9.9% | -3.1% | 9.9% | -0.9% | |
|
|---|
| Gross Margin | 35.7% | 36.9% | 38.3% | 38.5% | 37.2% | -1.3% |
| EBITDA Margin | 23.8% | 25.4% | 24.9% | 26.4% | 25.1% | -1.3% |
| EBIT Margin | | | | 15.8% | 14.6% | -1.2% |
| SG&A, % of revenue | 10.6% | 11.9% | 23.9% | 23.0% | | |
| SBC, % of revenue | | | | 0.0% | 0.0% | -0.0% |
| Net Income Margin | 10.7% | 11.2% | 10.4% | 11.4% | 10.7% | -0.8% |
| CAPEX, % of revenue | 16.5% | 31.3% | 14.0% | 13.9% | 12.6% | -1.3% |
|
|---|
| ROIC | 7.3% | 7.8% | 6.6% | 7.0% | 6.4% | -0.6% |
| ROE | 7.3% | 7.4% | 6.2% | 6.6% | 6.1% | -0.6% |
| Net Debt/EBITDA | 0.7x | 1.1x | 0.9x | 0.5x | 0.2x | -0.3x |
People
|
|---|
| Insider ownership | | | | 0.5% | 0.5% | 0.0% |
| Employees | | | | 302 | | |
| Revenue/Employee, th. £ | | | | 351 | | |
Peers in Electricity
Below you can find Jersey Electricity benchmarking vs. other companies in Electricity 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 ROIC, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Public Power Corp S.A. ($PPCD) | 1.4% | 3.2% | 1.8% | | |
| RusHydro OJSC ($HYDR) | 4.2% | 5.5% | 5.3% | | |
| |
|---|
| Median (2 companies) | 4.2% | 4.7% | 4.7% | | |
|---|
| Jersey Electricity ($JEL) | 7.3% | 7.8% | 6.6% | 7.0% | 6.4% |
