Watkin Jones Plc Net Income decreased on 8.8% while Revenue increased on 3.2%
14 Jan 2020 • About Watkin Jones Plc (
$WJG) • By InTwits
Watkin Jones Plc reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 13.6% in FY2019, 15.2% in FY2018, 14.5% in FY2017, 4.5% in FY2016, 14.8% in FY2015
- Watkin Jones Plc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.1%.
- In the last 5 years the company invested considerably less than D&A: £1m vs. £3m. In FY2019 this situation was still the same: CAPEX was 0 while D&A was 1
- The company has highly profitable business model: ROIC is 23.6%
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 increased on 3.2%. During the last 5 years Revenue growth topped in FY2018 at 20.3%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.6 pp from 15.2% to 13.6% in FY2019.
Gross Margin increased slightly on 0.53 pp from 20.0% to 20.5% in FY2019. SG&A as a % of Revenue showed almost no change in FY2019. Stock Based Compensation (SBC) as a % of Revenue increased slightly on 0.57 pp from 0.023% to 0.59% in FY2019.
Net Income margin decreased slightly on 1.4 pp from 12.2% to 10.8% in FY2019. The efficient tax rate was 19.0% in FY2019.
Investments (CAPEX, working capital and M&A)
In FY2019 Watkin Jones Plc had CAPEX/Revenue of 0.096%. Watkin Jones Plc showed almost no change in CAPEX/Revenue from FY2016 to FY2019. For the last three years the average CAPEX/Revenue was 0.097%.
Inventories as a % of Revenue decreased slightly on 0.76 pp from 36.6% to 35.8% in FY2019.
Return on investment
The company operates at high and attractive ROIC (23.6%) and ROE (24.5%). ROIC decreased on 7.7 pp from 31.4% to 23.6% in FY2019. ROE decreased on 7.2 pp from 31.7% to 24.5% in FY2019.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.5x and Debt / EBITDA is 0.8x. Debt jumped on 46.5% while cash increased on 8.5%.
Watkin Jones Plc has no short term refinancing risk: cash is higher than short term debt (8,735.0%).
Valuation and dividends
Watkin Jones Plc's trades at EV/EBITDA 11.2x and P/E 16.1x.
The company paid 49.6% of Net Income as dividends in FY2019.
Management team
1.3% of the company is owned by insiders. Insider ownership didn't change in 2019.
The company has 826 employees. The number of employees jumped on 13.0%. Average revenue per employee in FY2019 was £453,735 and it decreased on 8.6%.
Financial and operational results
FY ended 30 Sep 2019
Watkin Jones Plc ($WJG) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 244.2 | 267.0 | 301.9 | 363.1 | 374.8 | 3.2% |
| Gross Profit | 44.0 | 53.8 | 63.5 | 72.4 | 76.8 | 6.0% |
| SG&A | 11.6 | 14.6 | 20.8 | 22.8 | 24.5 | 7.2% |
| EBITDA | 36.1 | 12.0 | 43.8 | 55.2 | 51.1 | -7.4% |
| EBIT | | | | 53.9 | 49.7 | -7.8% |
| Tax | | | | 10.1 | 9.4 | -6.9% |
| Net Income | 22.2 | 4.2 | 35.8 | 44.2 | 40.3 | -8.8% |
| Stock Based Compensation | | | | 0.1 | 2.2 | 2,551.2% |
Balance Sheet
|
|---|
| Cash | 59.3 | 47.2 | 65.3 | 106.6 | 115.7 | 8.5% |
| Inventory | | | | 132.8 | 134.2 | 1.1% |
| Short Term Debt | 9.8 | 15.0 | 1.5 | 1.6 | 1.3 | -17.5% |
| Long Term Debt | 10.4 | 0.0 | 22.8 | 24.9 | 37.5 | 50.7% |
Cash flow
|
|---|
| Capex | 0.1 | 0.2 | 0.3 | 0.3 | 0.4 | 21.1% |
| Dividends | | | | 18.0 | 20.0 | 11.1% |
Ratios
|
|---|
| Revenue growth | 7.4% | 9.3% | 13.1% | 20.3% | 3.2% | |
| EBITDA growth | 131.3% | -66.8% | 265.0% | 26.1% | -7.4% | |
|
|---|
| Gross Margin | 18.0% | 20.2% | 21.0% | 20.0% | 20.5% | 0.5% |
| EBITDA Margin | 14.8% | 4.5% | 14.5% | 15.2% | 13.6% | -1.6% |
| EBIT Margin | | | | 14.8% | 13.3% | -1.6% |
| SG&A, % of revenue | 4.7% | 5.5% | 6.9% | 6.3% | 6.5% | 0.2% |
| SBC, % of revenue | | | | 0.0% | 0.6% | 0.6% |
| Net Income Margin | 9.1% | 1.6% | 11.9% | 12.2% | 10.8% | -1.4% |
| CAPEX, % of revenue | 0.0% | 0.1% | 0.1% | 0.1% | 0.1% | 0.0% |
|
|---|
| ROIC | 29.8% | 9.0% | 31.6% | 31.4% | 23.6% | -7.7% |
| ROE | 21.8% | 3.9% | 31.3% | 31.7% | 24.5% | -7.2% |
| Net Debt/EBITDA | -1.1x | -2.7x | -0.9x | -1.5x | -1.5x | -0.1x |
People
|
|---|
| Insider ownership | | | | 1.3% | 1.3% | 0.0% |
| Employees | | | | 731 | 826 | 13.0% |
| Revenue/Employee, th. £ | | | | 497 | 454 | -8.6% |
Peers in Real Estate Development
Below we provide Watkin Jones Plc benchmarking against other companies in Real Estate Development 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.
