M J Gleeson reports 86.4% Net Income decline in 2020 and 11.3 pp EBITDA Margin decline from 16.8% to 5.6%
14 Sep 2020 • About M J Gleeson (
$GLE) • By InTwits
M J Gleeson reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 5.6% in FY2020 vs. 16.8% in FY2019 vs. 20.4% in FY2016
- EBITDA Margin is quite volatile: 5.6% in FY2020, 16.8% in FY2019, 19.2% in FY2018, 21.1% in FY2017, 20.4% in FY2016
- M J Gleeson has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has potentially unprofitable business model: ROIC is 2.5%
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 dropped on 41.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.1 pp from 32.3% to 41.4% in FY2020. During the last 5 years EBITDA Margin topped in FY2017 at 21.1% and was declining since that time.
Gross Margin decreased on 2.5 pp from 30.0% to 27.5% in FY2020. Gross Margin stuck to a declining trend at -1.7 pp per annum in FY2016-FY2020. SG&A as a % of Revenue increased on 9.8 pp from 13.7% to 23.5% in FY2020.
Net Income margin dropped on 10.2 pp from 13.3% to 3.1% in FY2020. During the last 5 years Net Income margin topped in FY2017 at 16.3% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2020 M J Gleeson had CAPEX/Revenue of 1.6%. M J Gleeson's CAPEX/Revenue increased slightly on 0.90 pp from 0.74% in FY2017 to 1.6% in FY2020. For the last three years the average CAPEX/Revenue was 1.0%.
Return on investment
The company operates at low ROIC (2.5%) and ROE (2.2%). ROIC dropped on 18.2 pp from 20.7% to 2.5% in FY2020. ROE dropped on 14.8 pp from 17.0% to 2.2% in FY2020. During the last 5 years ROE topped in FY2019 at 17.0%.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.0x and Debt / EBITDA is 7.3x. Debt surged while cash surged on 153%.
M J Gleeson has no short term refinancing risk: cash is higher than short term debt (128.0%).
Valuation and dividends
M J Gleeson's trades at EV/EBITDA 42.4x and P/E 80.9x.
Management team
M J Gleeson's CEO is James Thomson. James Thomson has 1 year tenure with the company.
Financial and operational results
M J Gleeson ($GLE) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 142.1 | 160.4 | 196.7 | 249.9 | 147.2 | -41.1% |
| Gross Profit | 47.6 | 56.7 | 65.3 | 75.0 | 40.4 | -46.1% |
| SG&A | 18.7 | 24.1 | 28.7 | 34.3 | 34.5 | 0.8% |
| EBITDA | 28.9 | 33.8 | 37.8 | 42.1 | 8.2 | -80.5% |
| Net Income | 23.0 | 26.2 | 30.2 | 33.3 | 4.5 | -86.4% |
Balance Sheet
|
|---|
| Cash | 23.2 | 34.1 | 41.3 | 30.3 | 76.8 | 153.4% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 60.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.9 | 1.2 | 1.4 | 1.9 | 2.4 | 29.2% |
Ratios
|
|---|
| Revenue growth | 20.8% | 12.9% | 22.7% | 27.0% | -41.1% | |
| EBITDA growth | 26.6% | 16.8% | 12.0% | 11.3% | -80.5% | |
|
|---|
| Gross Margin | 33.5% | 35.4% | 33.2% | 30.0% | 27.5% | -2.5% |
| EBITDA Margin | 20.4% | 21.1% | 19.2% | 16.8% | 5.6% | -11.3% |
| SG&A, % of revenue | 13.2% | 15.0% | 14.6% | 13.7% | 23.5% | 9.8% |
| Net Income Margin | 16.2% | 16.3% | 15.4% | 13.3% | 3.1% | -10.2% |
| CAPEX, % of revenue | 0.7% | 0.7% | 0.7% | 0.7% | 1.6% | 0.9% |
|
|---|
| ROIC | 20.2% | 20.9% | 20.7% | 20.7% | 2.5% | -18.2% |
| ROE | 15.9% | 16.2% | 16.8% | 17.0% | 2.2% | -14.8% |
| Net Debt/EBITDA | -0.8x | -1.0x | -1.1x | -0.7x | -2.0x | -1.3x |
Peers in Household Goods & Home Construction
Below we provide M J Gleeson 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 |
|---|
| Redrow ($RDW) | 20.2% | 20.1% | 15.7% | 10.0% | - |
| Mcbride ($MCB) | - | -7.0% | 9.0% | 4.6% | -2.1% |
| Colefax Group ($CFX) | - | 4.7% | 6.9% | 0.4% | -9.3% |
| Barratt Developments ($BDEV) | - | 9.8% | 4.8% | -2.3% | -28.2% |
| Crest Nicholson Hldgs ($CRST) | 23.9% | 4.6% | 7.5% | -3.1% | - |
| |
|---|
| Median (5 companies) | 6.8% | 4.3% | 7.2% | 0.4% | -9.3% |
|---|
| M J Gleeson ($GLE) | - | 12.9% | 22.7% | 27.0% | -41.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Colefax Group ($CFX) | 56.3% | 55.1% | 53.7% | 54.3% | 55.8% |
| Mcbride ($MCB) | 35.8% | 36.4% | 34.2% | 33.3% | - |
| Redrow ($RDW) | 24.2% | 24.4% | 24.4% | 23.9% | - |
| Barratt Developments ($BDEV) | 18.9% | 20.0% | 20.7% | 22.8% | 18.0% |
| Crest Nicholson Hldgs ($CRST) | 26.7% | 26.4% | 22.0% | 16.9% | - |
| |
|---|
| Median (5 companies) | 26.3% | 26.2% | 27.7% | 23.9% | 36.9% |
|---|
| M J Gleeson ($GLE) | 33.5% | 35.4% | 33.2% | 30.0% | 27.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Redrow ($RDW) | 19.0% | 19.5% | 20.1% | 19.6% | - |
| Barratt Developments ($BDEV) | 15.9% | 17.3% | 17.8% | 19.0% | 15.0% |
| Crest Nicholson Hldgs ($CRST) | 20.6% | 20.4% | 16.4% | 10.8% | - |
| Colefax Group ($CFX) | 9.4% | 7.0% | 8.7% | 9.1% | 13.6% |
| Mcbride ($MCB) | 7.7% | 9.6% | 7.6% | 6.6% | - |
| |
|---|
| Median (5 companies) | 13.8% | 14.8% | 17.1% | 10.8% | 14.3% |
|---|
| M J Gleeson ($GLE) | 20.4% | 21.1% | 19.2% | 16.8% | 5.6% |
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% | 4.1% |
| Crest Nicholson Hldgs ($CRST) | 0.2% | 0.2% | 0.2% | 0.3% | - |
| Redrow ($RDW) | 0.4% | 0.1% | 0.1% | 0.2% | - |
| Barratt Developments ($BDEV) | 0.1% | 0.1% | 0.2% | 0.2% | 0.2% |
| |
|---|
| Median (5 companies) | 1.2% | 1.2% | 1.5% | 0.3% | 2.1% |
|---|
| M J Gleeson ($GLE) | 0.7% | 0.7% | 0.7% | 0.7% | 1.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Redrow ($RDW) | 21.8% | 23.4% | 26.0% | 25.4% | - |
| Colefax Group ($CFX) | 20.2% | 11.2% | 17.6% | 18.3% | 7.9% |
| Barratt Developments ($BDEV) | 16.5% | 18.4% | 18.3% | 17.3% | 9.1% |
| Mcbride ($MCB) | 19.1% | 23.8% | 18.4% | 14.0% | - |
| Crest Nicholson Hldgs ($CRST) | 23.5% | 22.5% | 18.0% | 11.2% | - |
| |
|---|
| Median (5 companies) | 19.1% | 15.6% | 18.2% | 17.3% | 8.5% |
|---|
| M J Gleeson ($GLE) | 20.2% | 20.9% | 20.7% | 20.7% | 2.5% |
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 ($CRST) | -0.4x | -0.2x | -0.1x | -0.3x | - |
| Barratt Developments ($BDEV) | -0.9x | -0.9x | -0.9x | -0.8x | -0.5x |
| Colefax Group ($CFX) | -1.4x | -1.2x | -1.2x | -1.2x | 1.6x |
| |
|---|
| Median (5 companies) | -0.4x | -0.4x | -0.5x | -0.3x | 0.5x |
|---|
| M J Gleeson ($GLE) | -0.8x | -1.0x | -1.1x | -0.7x | -2.0x |
