Barclays Net Income jumped on 39.4%
13 Feb 2020 • About Barclays (
$BARC) • By InTwits
Barclays reported 2019 financial results today. Here are the key drivers of the company's long term financial model:
- Barclays has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.9%. At the same time it's a lot of higher than industry average of 1.9%.
- CAPEX is quite volatile: £176m in FY2019, £113m in FY2018, £131m in FY2017, £85m in FY2016, £71m in FY2015
- The company has potentially unprofitable business model: ROIC is 1.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Barclays's Revenue increased on 4.7%.
Net Income margin increased on 2.7 pp from 8.2% to 10.9% in 2019.
Investments (CAPEX, working capital and M&A)
In 2019 Barclays had CAPEX/Revenue of 6.0%. Barclays's CAPEX/Revenue showed almost no change from 2016 to 2019. For the last three years the average CAPEX/Revenue was 5.4%. During the last 5 years CAPEX as a % of Revenue bottomed in 2018 at 4.9%.
Return on investment
The company operates at low ROIC (1.9%) and ROE (4.6%). ROIC increased slightly on 0.59 pp from 1.4% to 1.9% in 2019. ROE increased slightly on 1.7 pp from 3.0% to 4.6% in 2019. ROIC stuck to a growing trend at 0.32 pp per annum in 2015-2019.
Leverage (Debt)
Debt decreased on 6.6% while cash decreased on 8.2%.
Barclays has no short term refinancing risk: cash is higher than short term debt (632.6%).
Management team
James E Staley "Jes" is a the company's CEO. James E Staley "Jes" is a founder and has spent 4 years with the company. The company's CFO Tushar Morzaria has spent 6 years with the company.
Financial and operational results
FY ended 31 Dec 2019
Barclays ($BARC) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 26,996 | 27,257 | 26,799 | 28,699 | 30,043 | 4.7% |
| Net Income | -49 | 2,080 | -1,283 | 2,349 | 3,274 | 39.4% |
Balance Sheet
|
|---|
| Cash | 50,722 | 103,820 | 173,235 | 254,291 | 233,514 | -8.2% |
| Short Term Debt | 67,096 | 70,081 | 44,969 | 37,882 | 36,916 | -2.6% |
| Long Term Debt | 90,617 | 99,315 | 97,140 | 102,845 | 94,525 | -8.1% |
Cash flow
|
|---|
| Capex | 1,928 | 1,707 | 1,456 | 1,402 | 1,793 | 27.9% |
Ratios
|
|---|
| Revenue growth | -16.2% | 1.0% | -1.7% | 7.1% | 4.7% | |
|
|---|
| Net Income Margin | -0.2% | 7.6% | -4.8% | 8.2% | 10.9% | 2.7% |
| CAPEX, % of revenue | 7.1% | 6.3% | 5.4% | 4.9% | 6.0% | 1.1% |
|
|---|
| ROIC | 0.5% | 1.0% | 1.2% | 1.4% | 1.9% | 0.6% |
| ROE | -0.7% | 2.9% | -3.4% | 3.0% | 4.6% | 1.7% |
Peers in Banks
Below we provide Barclays benchmarking against other companies in Banks 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 |
|---|
| Bank Muscat ($BKM) | | 6.9% | 8.2% | 5,513.3% | 19.2% |
| Yapi Ve Kredi Bankasi As ($YKBD) | | 17.8% | 18.8% | 51.8% | 7.0% |
| Turkiye Garanti Bankasi ($39IS) | | 20.4% | 18.6% | 50.6% | 7.9% |
| Finansbank ($FBKD) | | 16.8% | 19.0% | 50.1% | 13.9% |
| Turk Ekonomi Bankasi As ($TURA) | | 18.1% | 2.6% | 44.8% | 7.3% |
| |
|---|
| Median (19 companies) | 4.0% | 3.9% | 4.5% | 12.9% | 7.1% |
|---|
| Barclays ($BARC) | | 1.0% | -1.7% | 7.1% | 4.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Banco Santander Sa ($BNC) | 10.2% | 9.1% | 10.0% | 14.7% | |
| Bcb Hldgs Ltd ($BCBW) | 2.5% | 3.0% | 7.3% | 5.9% | |
| Royal Bank Of Scotland Group ($RBS) | 4.6% | 5.6% | 7.1% | 3.7% | |
| Turkiye Garanti Bankasi ($39IS) | 2.4% | 3.6% | 2.4% | 3.5% | 1.1% |
| Banco Bilbao Vizcaya Argentaria Sa ($BVA) | 6.0% | 3.3% | 1.9% | 2.5% | 2.1% |
| |
|---|
| Median (16 companies) | 2.5% | 2.0% | 1.8% | 1.3% | 1.3% |
|---|
| Barclays ($BARC) | 7.1% | 6.3% | 5.4% | 4.9% | 6.0% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Bcb Hldgs Ltd ($BCBW) | -8.7% | 5.7% | 5.0% | 34.6% | |
| Commercial Intl Bank(Egypt)S.A.E ($CBKD) | 30.3% | 28.0% | 25.3% | 25.4% | 24.1% |
| Komercni Banka ($KMCA) | 7.4% | 8.0% | 9.1% | 8.7% | 8.3% |
| Turkiye Garanti Bankasi ($39IS) | 4.3% | 5.5% | 6.5% | 6.5% | 6.3% |
| Finansbank ($FBKD) | 3.1% | 4.3% | 4.6% | 5.4% | 4.7% |
| |
|---|
| Median (34 companies) | 3.5% | 4.6% | 4.6% | 4.5% | 4.6% |
|---|
| Barclays ($BARC) | 0.5% | 1.0% | 1.2% | 1.4% | 1.9% |
