Barratt Developments Net Income dropped on 46.0% and Revenue dropped on 28.2%
02 Sep 2020 • About Barratt Developments (
$BDEV) • By InTwits
Barratt Developments reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Barratt Developments has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.2%.
- The company has business model with low profitability: ROIC is 9.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Barratt Developments's Revenue dropped on 28.2%. Revenue decline was accelerating on average at -9.4 pp per annum in FY2016-FY2020. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.0 pp from 19.0% to 15.0% in FY2020. During the last 5 years EBITDA Margin topped in FY2019 at 19.0%.
Gross Margin decreased on 4.8 pp from 22.8% to 18.0% in FY2020. During FY2016-FY2020 Gross Margin topped in FY2019 at 22.8%. SG&A as a % of Revenue showed almost no change in FY2020.
Net Income margin decreased on 3.8 pp from 15.5% to 11.7% in FY2020. During FY2016-FY2020 Net Income margin topped in FY2019 at 15.5%.
Investments (CAPEX, working capital and M&A)
In FY2020 Barratt Developments had CAPEX/Revenue of 0.22%. CAPEX/Revenue showed almost no change from FY2017 to FY2020. For the last three years the average CAPEX/Revenue was 0.17%.
Return on investment
The company operates at low ROIC (9.1%) and ROE (8.2%). ROIC decreased on 8.2 pp from 17.3% to 9.1% in FY2020. ROE decreased on 7.4 pp from 15.7% to 8.2% in FY2020. During FY2016-FY2020 ROIC topped in FY2017 at 18.4% and was declining since that time. During FY2016-FY2020 ROE topped in FY2019 at 15.7%.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.5x and Debt / EBITDA is 0.7x. Debt decreased on 3.2% while cash dropped on 45.4%.
Barratt Developments has no short term refinancing risk: cash is higher than short term debt (479.0%).
Valuation and dividends
The company's trades at EV/EBITDA 9.4x and P/E 12.7x.
Management team
The company's CEO David F Thomas has spent 5 years with the company. Jessica White is a the company's CFO. Jessica White has spent 3 years at the company.
Financial and operational results
FY ended 30 Jun 2020
Barratt Developments ($BDEV) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 4,235 | 4,650 | 4,875 | 4,763 | 3,419 | -28.2% |
| Gross Profit | 800 | 932 | 1,009 | 1,084 | 614 | -43.3% |
| SG&A | 132 | 133 | 146 | 183 | 121 | -34.0% |
| EBITDA | 673 | 803 | 868 | 905 | 514 | -43.3% |
| Net Income | 550 | 616 | 672 | 740 | 400 | -46.0% |
Balance Sheet
|
|---|
| Cash | 758 | 784 | 982 | 1,136 | 620 | -45.4% |
| Short Term Debt | 6 | 73 | 0 | 178 | 129 | -27.2% |
| Long Term Debt | 172 | 1 | 191 | 200 | 236 | 18.1% |
Cash flow
|
|---|
| Capex | 6 | 4 | 8 | 7 | 8 | 4.2% |
Ratios
|
|---|
| Revenue growth | 12.7% | 9.8% | 4.8% | -2.3% | -28.2% | |
| EBITDA growth | 16.0% | 19.4% | 8.1% | 4.3% | -43.3% | |
|
|---|
| Gross Margin | 18.9% | 20.0% | 20.7% | 22.8% | 18.0% | -4.8% |
| EBITDA Margin | 15.9% | 17.3% | 17.8% | 19.0% | 15.0% | -4.0% |
| SG&A, % of revenue | 3.1% | 2.9% | 3.0% | 3.8% | 3.5% | -0.3% |
| Net Income Margin | 13.0% | 13.2% | 13.8% | 15.5% | 11.7% | -3.8% |
| CAPEX, % of revenue | 0.1% | 0.1% | 0.2% | 0.2% | 0.2% | 0.1% |
|
|---|
| ROIC | 16.5% | 18.4% | 18.3% | 17.3% | 9.1% | -8.2% |
| ROE | 14.3% | 14.8% | 15.1% | 15.7% | 8.2% | -7.4% |
| Net Debt/EBITDA | -0.9x | -0.9x | -0.9x | -0.8x | -0.5x | 0.3x |
Peers in Household Goods & Home Construction
Below we provide Barratt Developments benchmarking against other companies in Household Goods & Home Construction 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| M J Gleeson ($GLE) | 20.8% | 12.9% | 22.7% | 27.0% | - |
| Redrow ($RDW) | 20.2% | 20.1% | 15.7% | 10.0% | - |
| Mcbride ($MCB) | -3.3% | -7.0% | 9.0% | 4.6% | - |
| Colefax Group ($CFX) | 0.1% | 4.7% | 6.9% | 0.4% | - |
| Crest Nicholson Hldgs ($CRST) | 23.9% | 4.6% | 7.5% | -3.1% | - |
| |
|---|
| Median (5 companies) | 6.1% | 4.3% | 8.2% | 4.6% | - |
|---|
| Barratt Developments ($BDEV) | - | 9.8% | 4.8% | -2.3% | -28.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Colefax Group ($CFX) | 56.3% | 55.1% | 53.7% | 54.3% | - |
| Mcbride ($MCB) | 35.8% | 36.4% | 34.2% | 33.3% | - |
| M J Gleeson ($GLE) | 33.5% | 35.4% | 33.2% | 30.0% | - |
| Redrow ($RDW) | 24.2% | 24.4% | 24.4% | 23.9% | - |
| Crest Nicholson Hldgs ($CRST) | 26.7% | 26.4% | 22.0% | 16.9% | - |
| |
|---|
| Median (5 companies) | 26.7% | 30.0% | 32.1% | 30.0% | - |
|---|
| Barratt Developments ($BDEV) | 18.9% | 20.0% | 20.7% | 22.8% | 18.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Redrow ($RDW) | 19.0% | 19.5% | 20.1% | 19.6% | - |
| M J Gleeson ($GLE) | 20.4% | 21.1% | 19.2% | 16.8% | - |
| Crest Nicholson Hldgs ($CRST) | 20.6% | 20.4% | 16.4% | 10.8% | - |
| Colefax Group ($CFX) | 9.4% | 7.0% | 8.7% | 9.1% | - |
| Mcbride ($MCB) | 7.7% | 9.6% | 7.6% | 6.6% | - |
| |
|---|
| Median (5 companies) | 15.3% | 15.1% | 17.8% | 10.8% | - |
|---|
| Barratt Developments ($BDEV) | 15.9% | 17.3% | 17.8% | 19.0% | 15.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mcbride ($MCB) | 1.7% | 2.4% | 3.2% | 2.4% | - |
| Colefax Group ($CFX) | 3.0% | 5.1% | 2.8% | 2.4% | - |
| M J Gleeson ($GLE) | 0.7% | 0.7% | 0.7% | 0.7% | - |
| Crest Nicholson Hldgs ($CRST) | 0.2% | 0.2% | 0.2% | 0.3% | - |
| Redrow ($RDW) | 0.4% | 0.1% | 0.1% | 0.2% | - |
| |
|---|
| Median (5 companies) | 1.2% | 1.2% | 1.7% | 0.7% | - |
|---|
| Barratt Developments ($BDEV) | 0.1% | 0.1% | 0.2% | 0.2% | 0.2% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Redrow ($RDW) | 21.8% | 23.4% | 26.0% | 25.4% | - |
| M J Gleeson ($GLE) | 20.2% | 20.9% | 20.7% | 20.7% | - |
| Colefax Group ($CFX) | 20.2% | 11.2% | 17.6% | 18.3% | - |
| Mcbride ($MCB) | 19.1% | 23.8% | 18.4% | 14.0% | - |
| Crest Nicholson Hldgs ($CRST) | 23.5% | 22.5% | 18.0% | 11.2% | - |
| |
|---|
| Median (5 companies) | 19.6% | 16.9% | 18.2% | 18.3% | - |
|---|
| Barratt Developments ($BDEV) | 16.5% | 18.4% | 18.3% | 17.3% | 9.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mcbride ($MCB) | 1.7x | 1.2x | 2.2x | 2.5x | - |
| Redrow ($RDW) | 0.5x | 0.2x | -0.2x | -0.3x | - |
| Crest Nicholson Hldgs ($CRST) | -0.4x | -0.2x | -0.1x | -0.3x | - |
| M J Gleeson ($GLE) | -0.8x | -1.0x | -1.1x | -0.7x | - |
| Colefax Group ($CFX) | -1.4x | -1.2x | -1.2x | -1.2x | - |
| |
|---|
| Median (5 companies) | -0.4x | -0.4x | -0.6x | -0.3x | - |
|---|
| Barratt Developments ($BDEV) | -0.9x | -0.9x | -0.9x | -0.8x | -0.5x |
