Sureserve Group Plc reports 12.6% EBITDA growth in 2019 and almost no change in EBITDA Margin of 4.6%
21 Jan 2020 • About Sureserve Group Plc (
$SUR) • By InTwits
Sureserve Group Plc reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 4.6% in FY2019, 4.6% in FY2018, 4.3% in FY2017, -6.6% in FY2016, 3.7% in FY2015
- Sureserve Group Plc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
- The company has business model with average profitability: ROIC is 10.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Sureserve Group Plc's Revenue surged on 11.2%. During FY2015-FY2019 Revenue growth bottomed in FY2017 at -44.5% and was accelerating since that time. EBITDA Margin showed almost no change in FY2019. During the last 5 years EBITDA Margin bottomed in FY2016 at -6.6% and was growing since that time.
Gross Margin increased slightly on 1.2 pp from 14.3% to 15.5% in FY2019.
Net Income margin increased on 7.8 pp from -5.4% to 2.4% in FY2019.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.30% in FY2019. The company's CAPEX/Revenue showed almost no change from FY2016 to FY2019. Average CAPEX/Revenue for the last three years was 0.34%.
Return on investment
The company operates at good ROE (12.1%) while ROIC is low (10.3%). ROIC increased on 5.7 pp from 4.6% to 10.3% in FY2019. ROE surged on 35.3 pp from -23.2% to 12.1% in FY2019. During FY2015-FY2019 ROIC bottomed in FY2016 at -43.2% and was growing since that time.
Leverage (Debt)
Debt level is 0.7x Net Debt / EBITDA and 1.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 1.3x to 0.7x in FY2019. Debt dropped on 24.9% while cash surged on 43.8%.
Sureserve Group Plc has no short term refinancing risk: cash is higher than short term debt (4,540.7%).
Valuation and dividends
Sureserve Group Plc's trades at EV/EBITDA 7.9x and P/E 14.0x.
Financial and operational results
FY ended 30 Nov -0001
Sureserve Group Plc ($SUR) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 340.2 | 327.2 | 181.5 | 190.8 | 212.1 | 11.2% |
| Gross Profit | 43.4 | 27.5 | 27.0 | 27.4 | 32.9 | 20.1% |
| EBITDA | 12.4 | -21.5 | 7.8 | 8.7 | 9.8 | 12.6% |
| Net Income | 2.4 | -29.3 | 0.0 | -10.4 | 5.0 | |
Balance Sheet
|
|---|
| Cash | 6.9 | 0.0 | 26.1 | 1.7 | 2.5 | 43.8% |
| Short Term Debt | 0.4 | 0.3 | 0.2 | 13.0 | 0.1 | -99.6% |
| Long Term Debt | 0.3 | 20.8 | 27.2 | 0.1 | 9.8 | 16,158.3% |
Cash flow
|
|---|
| Capex | 1.2 | 0.8 | 0.9 | 0.4 | 0.6 | 46.7% |
Ratios
|
|---|
| Revenue growth | 12.5% | -3.8% | -44.5% | 5.1% | 11.2% | |
| EBITDA growth | 70.2% | -272.7% | -136.3% | 11.8% | 12.6% | |
|
|---|
| Gross Margin | 12.8% | 8.4% | 14.9% | 14.3% | 15.5% | 1.2% |
| EBITDA Margin | 3.7% | -6.6% | 4.3% | 4.6% | 4.6% | 0.1% |
| Net Income Margin | 0.7% | -8.9% | 0.0% | -5.4% | 2.4% | 7.8% |
| CAPEX, % of revenue | 0.3% | 0.3% | 0.5% | 0.2% | 0.3% | 0.1% |
|
|---|
| ROIC | 6.1% | -43.2% | -5.7% | 4.6% | 10.3% | 5.7% |
| ROE | 3.6% | -42.9% | 0.0% | -23.2% | 12.1% | 35.3% |
| Net Debt/EBITDA | -0.5x | | 0.2x | 1.3x | 0.7x | -0.6x |
Peers in Diversified Support Services
Below we provide Sureserve Group Plc benchmarking against other companies in Diversified Support Services 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 |
|---|
| Arena Events Group Plc ($ARE) | 1.2% | 8.6% | 17.6% | 23.2% | |
| |
|---|
| Median (1 company) | 1.2% | 8.6% | 17.6% | 23.2% | |
|---|
| Sureserve Group Plc ($SUR) | | -3.8% | -44.5% | 5.1% | 11.2% |
Top companies by Gross margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Arena Events Group Plc ($ARE) | 27.6% | 31.4% | 32.5% | 31.0% | |
| |
|---|
| Median (1 company) | 27.6% | 31.4% | 32.5% | 31.0% | |
|---|
| Sureserve Group Plc ($SUR) | 12.8% | 8.4% | 14.9% | 14.3% | 15.5% |
Top companies by EBITDA margin, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Arena Events Group Plc ($ARE) | 9.2% | 7.1% | 5.1% | 4.2% | |
| |
|---|
| Median (1 company) | 9.2% | 7.1% | 5.1% | 4.2% | |
|---|
| Sureserve Group Plc ($SUR) | 3.7% | -6.6% | 4.3% | 4.6% | 4.6% |
Top companies by CAPEX/Revenue, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Arena Events Group Plc ($ARE) | 7.8% | 4.4% | 6.1% | 8.4% | |
| |
|---|
| Median (1 company) | 7.8% | 4.4% | 6.1% | 8.4% | |
|---|
| Sureserve Group Plc ($SUR) | 0.3% | 0.3% | 0.5% | 0.2% | 0.3% |
Top companies by ROIC, %
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Arena Events Group Plc ($ARE) | 3.4% | 1.7% | 0.4% | 0.0% | |
| |
|---|
| Median (1 company) | 3.4% | 1.7% | 0.4% | 0.0% | |
|---|
| Sureserve Group Plc ($SUR) | 6.1% | -43.2% | -5.7% | 4.6% | 10.3% |
Top companies by Net Debt / EBITDA
| Top | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Arena Events Group Plc ($ARE) | 5.7x | 9.6x | 2.2x | 3.5x | |
| |
|---|
| Median (1 company) | 5.7x | 9.6x | 2.2x | 3.5x | |
|---|
| Sureserve Group Plc ($SUR) | -0.5x | | 0.2x | 1.3x | 0.7x |
