City Of London Investment Group reports 14.1% Net Income decline in 2020 while 4.2% Revenue growth
14 Sep 2020 • About City Of London Investment Group (
$CLIG) • By InTwits
City Of London Investment Group reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- City Of London Investment Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has highly profitable business model: ROIC is 52.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 4.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.2 pp from 6.1% to 11.4% in FY2020.
SG&A as a % of Revenue decreased on 2.0 pp from 13.3% to 11.3% in FY2020.
Net Income margin decreased on 4.8 pp from 27.6% to 22.7% in FY2020. During the last 5 years Net Income margin topped in FY2017 at 29.7% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2020 City Of London Investment Group had CAPEX/Revenue of 0.24%. City Of London Investment Group's CAPEX/Revenue decreased slightly on 1.3 pp from 1.6% in FY2017 to 0.24% in FY2020. It's average CAPEX/Revenue for the last three years was 0.65%.
Return on investment
The company operates at high and attractive ROIC (52.0%) and ROE (40.0%). ROIC increased on 4.5 pp from 47.5% to 52.0% in FY2020. ROE decreased on 3.6 pp from 43.6% to 40.0% in FY2020. During the last 5 years ROE topped in FY2017 at 58.9% and was declining since that time.
Leverage (Debt)
Debt level is -1.0x Net Debt / EBITDA and 0.2x Debt / EBITDA. Debt jumped while cash increased on 5.7%.
City Of London Investment Group has no short term refinancing risk: cash is higher than short term debt (3,593.1%).
Valuation and dividends
The company's trades at EV/EBITDA 7.5x and P/E 13.8x.
Financial and operational results
FY ended 30 Jun 2020
City Of London Investment Group ($CLIG) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 24.413 | 31.294 | 33.931 | 31.933 | 33.263 | 4.2% |
| SG&A | 3.632 | 4.075 | 4.717 | 4.254 | 3.762 | -11.6% |
| EBITDA | 7.924 | 11.740 | 12.823 | 10.810 | 12.231 | 13.1% |
| Net Income | 5.791 | 9.290 | 10.060 | 8.799 | 7.560 | -14.1% |
Balance Sheet
|
|---|
| Cash | 10.151 | 13.937 | 19.704 | 13.813 | 14.594 | 5.7% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.406 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 1.552 | |
Cash flow
|
|---|
| Capex | 0.139 | 0.485 | 0.137 | 0.421 | 0.079 | -81.4% |
Ratios
|
|---|
| Revenue growth | -3.7% | 28.2% | 8.4% | -5.9% | 4.2% | |
| EBITDA growth | -10.9% | 48.1% | 9.2% | -15.7% | 13.1% | |
|
|---|
| EBITDA Margin | 32.5% | 37.5% | 37.8% | 33.9% | 36.8% | 2.9% |
| SG&A, % of revenue | 14.9% | 13.0% | 13.9% | 13.3% | 11.3% | -2.0% |
| Net Income Margin | 23.7% | 29.7% | 29.6% | 27.6% | 22.7% | -4.8% |
| CAPEX, % of revenue | 0.6% | 1.6% | 0.4% | 1.3% | 0.2% | -1.1% |
|
|---|
| ROIC | 55.3% | 71.6% | 63.7% | 47.5% | 52.0% | 4.5% |
| ROE | 42.7% | 58.9% | 50.9% | 43.6% | 40.0% | -3.6% |
| Net Debt/EBITDA | -1.3x | -1.2x | -1.5x | -1.3x | -1.0x | 0.2x |
Peers in Financial Services
Below you can find City Of London Investment Group benchmarking vs. other companies in Financial Services industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mxc Capital ($MXCP) | 118.4% | -3.5% | -76.6% | 214.9% | - |
| Afh Financial Group ($AFHP) | 15.0% | 39.4% | 50.6% | 46.7% | - |
| Private & Commercial Finance Group ($PCF) | 13.2% | -60.1% | 22.4% | 36.2% | - |
| Commercial Bank Of Qatar(The) ($CBQS) | 1.7% | 6.1% | 17.8% | 12.4% | - |
| Impax Asset Management Group ($IPX) | 6.8% | 55.2% | 100.9% | 12.2% | - |
| |
|---|
| Median (16 companies) | 4.9% | 12.9% | 16.1% | 6.5% | 2.1% |
|---|
| City Of London Investment Group ($CLIG) | - | 28.2% | 8.4% | -5.9% | 4.2% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| 1Pm ($OPM) | 64.3% | 64.0% | 66.3% | 67.7% | - |
| Afh Financial Group ($AFHP) | 55.4% | 53.4% | 54.4% | 53.4% | - |
| Starvest ($SVE) | 38.4% | 49.4% | - | 18.5% | - |
| |
|---|
| Median (3 companies) | 59.3% | 51.4% | 54.1% | 53.4% | - |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mxc Capital ($MXCP) | 105.4% | -263.1% | -755.1% | 299.5% | - |
| Starvest ($SVE) | 63.4% | 56.4% | - | 134.5% | - |
| Ashmore Group ($ASHM) | 57.1% | 65.0% | 63.6% | 62.1% | 61.0% |
| Plus500 Ltd ($PLUS) | 46.0% | 59.3% | 70.2% | 54.2% | - |
| Impax Asset Management Group ($IPX) | 20.8% | 19.6% | 26.7% | 29.5% | - |
| |
|---|
| Median (11 companies) | 20.8% | 22.1% | 24.0% | 27.7% | 30.7% |
|---|
| City Of London Investment Group ($CLIG) | 32.5% | 37.5% | 37.8% | 33.9% | 36.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mattioli Woods ($MTW) | 2.6% | 16.3% | 13.2% | 2.9% | 1.4% |
| 1Pm ($OPM) | 4.4% | 6.4% | 3.4% | 2.4% | - |
| Commercial Bank Of Qatar(The) ($CBQS) | 3.3% | 1.8% | 3.8% | 1.9% | - |
| Afh Financial Group ($AFHP) | 1.8% | 0.8% | 0.5% | 1.1% | - |
| Tungsten Corp ($TUNG) | 1.0% | 0.9% | 1.0% | 0.9% | 0.5% |
| |
|---|
| Median (14 companies) | 1.0% | 1.0% | 1.2% | 0.5% | 0.5% |
|---|
| City Of London Investment Group ($CLIG) | 0.6% | 1.6% | 0.4% | 1.3% | 0.2% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Plus500 Ltd ($PLUS) | 118.9% | 143.2% | 196.2% | 65.4% | - |
| Impax Asset Management Group ($IPX) | 15.0% | 19.7% | 30.7% | 28.8% | - |
| Ashmore Group ($ASHM) | 17.6% | 23.5% | 24.3% | 23.9% | 23.4% |
| Starvest ($SVE) | 5.9% | 18.5% | -18.6% | 21.4% | - |
| Afh Financial Group ($AFHP) | 11.3% | 12.4% | 14.4% | 16.5% | - |
| |
|---|
| Median (19 companies) | 8.6% | 9.6% | 7.5% | 8.9% | 13.5% |
|---|
| City Of London Investment Group ($CLIG) | 55.3% | 71.6% | 63.7% | 47.5% | 52.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Redde ($REDD) | 1.3x | 1.3x | 1.8x | 1.6x | - |
| Afh Financial Group ($AFHP) | -1.0x | -1.1x | -1.8x | 0.2x | - |
| 1Pm ($OPM) | 0.2x | -0.2x | 0.3x | 0.2x | - |
| Starvest ($SVE) | -0.1x | -1.5x | - | -0.2x | - |
| Impax Asset Management Group ($IPX) | -0.6x | -2.0x | -0.3x | -0.5x | - |
| |
|---|
| Median (11 companies) | -1.0x | -1.6x | -0.9x | -1.5x | -1.8x |
|---|
| City Of London Investment Group ($CLIG) | -1.3x | -1.2x | -1.5x | -1.3x | -1.0x |
