Nektan revenue growth decelerated from 50.1% in FY2018 to 13.5% in FY2019
27 Jan 2020 • About Nektan (
$NKTN) • By InTwits
Nektan reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- Nektan is a fast growth stock: FY2019 revenue growth was 13.5%, 5 year revenue CAGR was 64.7% at FY2019 ROIC
- The company operates at negative EBITDA Margin: -14.7%
- Nektan motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2015-FY2019 was 0.0% while average EBITDA Margin was -32.6% for the sames years
- Nektan has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's a lot of higher than industry average of 19.9%.
- CAPEX is quite volatile: £0m in FY2019, £0m in FY2018, £0m in FY2017, £0m in FY2016, £0m in FY2015
- In the last 5 years the company invested considerably less than D&A: £0m vs. £1m
- It operates with medium-size leverage: Net Debt/EBITDA is 2.5x while industry average is 2.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Nektan's Revenue jumped on 13.5%. During the last 5 years Revenue growth topped in FY2016 at 995% and was decelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.9 pp from 24.5% to 27.4% in FY2019. During the last 5 years EBITDA Margin topped in FY2018 at -4.1%.
Gross Margin decreased on 5.3 pp from 62.2% to 56.9% in FY2019. During the last 5 years Gross Margin topped in FY2016 at 67.9% and was declining since that time. SG&A as a % of Revenue increased on 5.9 pp from 31.1% to 36.9% in FY2019. During the last 5 years SG&A as a % of Revenue bottomed in FY2018 at 31.1%.
Net Income margin decreased on 5.9 pp from -34.9% to -40.8% in FY2019. During FY2015-FY2019 Net Income margin topped in FY2018 at -34.9%.
Investments (CAPEX, working capital and M&A)
Nektan's CAPEX/Revenue was 0.58% in FY2019. Nektan's CAPEX/Revenue decreased slightly on 1.1 pp from 1.7% in FY2016 to 0.58% in FY2019. For the last three years the average CAPEX/Revenue was 0.50%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2018 at 0.42%.
Leverage (Debt)
Debt level is 2.5x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2019. Debt dropped on 40.5% while cash dropped on 38.9%.
Nektan has short term refinancing risk: cash is only 14.0% of short term debt.
Financial and operational results
FY ended 30 Jun 2019
Nektan ($NKTN) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 0.528 | 5.783 | 13.250 | 19.894 | 22.577 | 13.5% |
| Gross Profit | 0.225 | 3.924 | 8.487 | 12.378 | 12.844 | 3.8% |
| SG&A | 7.188 | 7.665 | 5.908 | 6.181 | 8.340 | 34.9% |
| EBITDA | -6.379 | -7.213 | -2.475 | -0.809 | -3.317 | |
| EBIT | -7.206 | | | | | |
| Interest expence | 0.230 | | | | | |
| Tax | 0.019 | | | | | |
| Net Income | -8.142 | -10.486 | -6.121 | -6.952 | -9.215 | |
| Stock Based Compensation | 0.007 | | | | | |
Balance Sheet
|
|---|
| Cash | 3.396 | 0.099 | 0.638 | 1.402 | 0.857 | -38.9% |
| Short Term Debt | | 0.027 | 0.008 | 0.001 | 6.132 | 613,100.0% |
| Long Term Debt | 5.090 | 9.229 | 8.368 | 10.309 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 0.024 | 0.096 | 0.067 | 0.083 | 0.131 | 57.8% |
| Acquisitions | 1.749 | | | | | |
Ratios
|
|---|
| Revenue growth | -71.7% | 995.3% | 129.1% | 50.1% | 13.5% | |
| EBITDA growth | 71.1% | 13.1% | -65.7% | -67.3% | 310.0% | |
|
|---|
| Gross Margin | 42.6% | 67.9% | 64.1% | 62.2% | 56.9% | -5.3% |
| EBITDA Margin | -1,208.1% | -124.7% | -18.7% | -4.1% | -14.7% | -10.6% |
| EBIT Margin | -1,364.8% | | | | |
| SG&A, % of revenue | 1,361.4% | 132.5% | 44.6% | 31.1% | 36.9% | 5.9% |
| SBC, % of revenue | 1.3% | | | | |
| Net Income Margin | -1,542.0% | -181.3% | -46.2% | -34.9% | -40.8% | -5.9% |
| CAPEX, % of revenue | 4.5% | 1.7% | 0.5% | 0.4% | 0.6% | 0.2% |
|
|---|
| ROIC | -133.0% | -156.8% | -191.9% | -728.0% | | |
| ROE | -286.9% | | | | | |
| Interest expence / Average debt | 4.5% | | | | | |
People
|
|---|
| Insider ownership | 8.5% | | | | | |
| Employees | 67 | | | | | |
| Revenue/Employee, th. £ | 8 | | | | | |
Peers in Travel & Leisure
Below we provide Nektan benchmarking against other companies in Travel & Leisure 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 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Easyhotel ($EZH) | | 8.7% | 39.7% | 33.7% | 56.0% |
| Webis Holdings ($WEB) | 29.7% | 45.3% | 65.8% | 24.0% | |
| Hanatour Service Inc ($TOUR) | 19.2% | 29.6% | 14.6% | 21.4% | |
| Meikles Ltd ($MIK) | 7.6% | 9.7% | 0.9% | 16.9% | |
| Marston'S ($MARS) | 7.8% | 6.7% | 7.9% | 12.9% | |
| |
|---|
| Median (17 companies) | 7.6% | 8.3% | 7.3% | 7.6% | 29.2% |
|---|
| Nektan ($NKTN) | | 995.3% | 129.1% | 50.1% | 13.5% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Intercontinental Hotels Group ($IHG) | 64.5% | 86.0% | 86.0% | 83.7% | |
| Eclectic Bar Grp ($BAR) | 79.4% | 80.7% | 82.3% | 82.9% | |
| Air Partner ($AIP) | 11.5% | 12.9% | 14.7% | 74.4% | |
| Easyhotel ($EZH) | 68.8% | 64.3% | 61.3% | 53.5% | 48.1% |
| Carnival ($CCL) | 39.9% | 42.7% | 40.0% | 41.3% | |
| |
|---|
| Median (9 companies) | 40.1% | 39.3% | 36.2% | 41.3% | 28.4% |
|---|
| Nektan ($NKTN) | 42.6% | 67.9% | 64.1% | 62.2% | 56.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Ryanair Hldgs ($RYA) | 25.1% | 28.9% | 30.6% | 31.2% | |
| Celtic ($CCP) | -1.3% | 14.6% | 18.5% | 28.4% | |
| Carnival ($CCL) | 26.7% | 29.3% | 26.6% | 28.3% | |
| Heavitree Brewery ($HVT) | 23.7% | 25.0% | 27.8% | 24.5% | |
| Young & Co'S Brewery ($YNGN) | 22.9% | 22.6% | 23.5% | 23.4% | |
| |
|---|
| Median (16 companies) | 12.9% | 17.0% | 17.6% | 15.7% | 9.3% |
|---|
| Nektan ($NKTN) | -1,208.1% | -124.7% | -18.7% | -4.1% | -14.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Easyhotel ($EZH) | 46.8% | 153.2% | 269.8% | 412.1% | 142.5% |
| Ryanair Hldgs ($RYA) | 13.9% | 18.6% | 21.8% | 20.6% | |
| Carnival ($CCL) | 14.6% | 18.7% | 16.8% | 19.9% | |
| Marston'S ($MARS) | 16.2% | 15.3% | 19.4% | 14.3% | |
| Ana Hldgs Inc ($ANA) | 14.1% | 14.1% | 12.7% | 13.5% | |
| |
|---|
| Median (16 companies) | 7.2% | 14.1% | 7.4% | 8.5% | 74.0% |
|---|
| Nektan ($NKTN) | 4.5% | 1.7% | 0.5% | 0.4% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Intercontinental Hotels Group ($IHG) | 96.6% | 51.2% | 92.2% | 45.0% | |
| Air Partner ($AIP) | 20.0% | 20.4% | 24.6% | 34.6% | |
| Celtic ($CCP) | -14.7% | 1.5% | 11.6% | 23.7% | |
| Ryanair Hldgs ($RYA) | 13.3% | 17.2% | 17.7% | 18.4% | |
| Meikles Ltd ($MIK) | -3.5% | 1.0% | 6.1% | 12.2% | |
| |
|---|
| Median (20 companies) | 6.3% | 6.3% | 7.1% | 8.7% | 1.9% |
|---|
| Nektan ($NKTN) | -133.0% | -156.8% | -191.9% | -728.0% | |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Marston'S ($MARS) | 8.2x | 6.2x | 6.9x | 8.7x | |
| Peel Hotels ($PHO) | 4.4x | 3.9x | 0.4x | 4.3x | |
| Heavitree Brewery ($HVT) | 4.6x | 4.1x | 3.7x | 3.7x | |
| Eclectic Bar Grp ($BAR) | 1.5x | 6.8x | 2.1x | 3.4x | |
| Intercontinental Hotels Group ($IHG) | 0.3x | 1.9x | 2.3x | 3.1x | |
| |
|---|
| Median (16 companies) | 1.2x | 2.1x | 1.9x | 2.0x | 1.8x |
|---|
