Kier Group revenue decline accelerated from 6.8% in FY2019 to 13.4% in FY2020
17 Sep 2020 • About Kier Group (
$KIE) • By InTwits
Kier Group reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -2.9%
- Kier Group spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 is 0.0%. Average EBITDA Margin for the same period was -0.2%
- Kier Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
- The company has unprofitable business model: ROIC is -16.9%
- It operates with high leverage: Net Debt/EBITDA is 2.5x while industry average is 0.1x
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 13.4%. Revenue decline was accelerating on average at -8.1 pp per annum in FY2016-FY2020. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.2 pp from -4.0% to -2.9% in FY2020.
Gross Margin decreased slightly on 1.5 pp from 7.4% to 5.9% in FY2020. SG&A as a % of Revenue decreased slightly on 1.3 pp from 12.8% to 11.4% in FY2020.
Net Income margin decreased on 2.7 pp from -5.3% to -8.0% in FY2020. During FY2016-FY2020 Net Income margin topped in FY2018 at 2.1% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2020 Kier Group had CAPEX/Revenue of 0.11%. The company's CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average level of CAPEX/Revenue for the last three years was 0.31%. During FY2016-FY2020 CAPEX as a % of Revenue topped in FY2018 at 0.52% and was declining since that time.
Return on investment
The company operates at negative ROIC (-16.9%) and ROE (-71.9%). ROIC increased slightly on 1.7 pp from -18.6% to -16.9% in FY2020. ROE dropped on 34.5 pp from -37.5% to -71.9% in FY2020. During the last 5 years ROE topped in FY2018 at 15.8% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.5x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2020. Debt jumped on 82.3% while cash surged on 32.8%.
Kier Group has no short term refinancing risk: cash is higher than short term debt (437.1%).
Management team
The company's CEO is Andrew Oswell Bede Davies. Andrew Oswell Bede Davies has 1 year tenure with the company. Kier Group's CFO Simon J Kesterton has spent 1 year with the company.
Financial and operational results
FY ended 30 Jun 2020
Kier Group ($KIE) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 3,991 | 4,129 | 4,240 | 3,951 | 3,423 | -13.4% |
| Gross Profit | 356 | 289 | 402 | 291 | 202 | -30.6% |
| SG&A | 380 | 302 | 314 | 505 | 392 | -22.4% |
| EBITDA | 28 | 33 | 149 | -159 | -99 | |
| Net Income | -18 | 11 | 87 | -210 | -273 | |
Balance Sheet
|
|---|
| Cash | 187 | 500 | 331 | 312 | 414 | 32.8% |
| Short Term Debt | 14 | 59 | 16 | 31 | 95 | 201.6% |
| Long Term Debt | 316 | 587 | 528 | 476 | 830 | 74.4% |
Cash flow
|
|---|
| Capex | 14 | 16 | 22 | 12 | 4 | -67.2% |
Ratios
|
|---|
| Revenue growth | 21.8% | 3.4% | 2.7% | -6.8% | -13.4% | |
| EBITDA growth | -70.7% | 17.9% | 350.0% | -207.3% | -38.2% | |
|
|---|
| Gross Margin | 8.9% | 7.0% | 9.5% | 7.4% | 5.9% | -1.5% |
| EBITDA Margin | 0.7% | 0.8% | 3.5% | -4.0% | -2.9% | 1.2% |
| SG&A, % of revenue | 9.5% | 7.3% | 7.4% | 12.8% | 11.4% | -1.3% |
| Net Income Margin | -0.4% | 0.3% | 2.1% | -5.3% | -8.0% | -2.7% |
| CAPEX, % of revenue | 0.4% | 0.4% | 0.5% | 0.3% | 0.1% | -0.2% |
|
|---|
| ROIC | -2.2% | -1.6% | 7.7% | -18.6% | -16.9% | 1.7% |
| ROE | -3.0% | 2.0% | 15.8% | -37.5% | -71.9% | -34.5% |
| Net Debt/EBITDA | 5.1x | 4.4x | 1.4x | | |
Peers in Construction & Materials
Below we provide Kier Group benchmarking against other companies in Construction & Materials 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 |
|---|
| Volution Group ($FAN) | 18.7% | 19.8% | 11.1% | 14.6% | - |
| Aukett Swanke Group ($AUK) | 9.0% | -12.7% | -18.5% | 4.7% | - |
| James Halstead ($JHD) | -0.5% | 6.5% | 3.6% | 1.4% | - |
| Alumasc Group ($ALU) | - | 13.6% | -6.1% | -8.4% | -15.7% |
| Titon Hldgs ($TON) | 6.6% | 18.1% | 6.3% | -8.8% | - |
| |
|---|
| Median (6 companies) | 7.7% | 9.4% | 7.0% | -3.5% | -17.8% |
|---|
| Kier Group ($KIE) | - | 3.4% | 2.7% | -6.8% | -13.4% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Volution Group ($FAN) | 48.8% | 49.2% | 47.0% | 47.1% | - |
| James Halstead ($JHD) | 42.4% | 43.5% | 41.9% | 43.0% | - |
| Titon Hldgs ($TON) | 29.7% | 25.9% | 28.9% | 30.2% | - |
| Alumasc Group ($ALU) | 33.4% | 31.3% | 30.6% | 29.8% | 29.7% |
| Galliford Try ($GFRD) | 10.9% | 7.9% | 9.7% | 0.7% | 2.6% |
| |
|---|
| Median (5 companies) | 29.7% | 26.9% | 28.9% | 30.2% | 16.2% |
|---|
| Kier Group ($KIE) | 8.9% | 7.0% | 9.5% | 7.4% | 5.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| James Halstead ($JHD) | 21.6% | 20.8% | - | 20.3% | - |
| Volution Group ($FAN) | 22.2% | 20.6% | 17.6% | 18.9% | - |
| Titon Hldgs ($TON) | 9.8% | 8.8% | 9.0% | 8.8% | - |
| Alumasc Group ($ALU) | 9.7% | 9.8% | 7.8% | 3.9% | 6.9% |
| Aukett Swanke Group ($AUK) | 6.6% | -0.9% | -18.2% | 1.3% | - |
| |
|---|
| Median (7 companies) | 10.9% | 9.4% | 9.0% | 3.9% | 2.3% |
|---|
| Kier Group ($KIE) | 0.7% | 0.8% | 3.5% | -4.0% | -2.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Alumasc Group ($ALU) | 1.1% | 0.9% | 3.1% | 2.6% | 1.8% |
| Titon Hldgs ($TON) | 3.0% | 1.9% | 1.9% | 2.6% | - |
| Volution Group ($FAN) | 1.9% | 1.3% | 2.3% | 1.8% | - |
| James Halstead ($JHD) | 2.1% | 1.8% | 1.4% | 1.7% | - |
| Aukett Swanke Group ($AUK) | 0.8% | 0.2% | 0.6% | 0.7% | - |
| |
|---|
| Median (7 companies) | 2.4% | 2.0% | 2.1% | 1.7% | 0.9% |
|---|
| Kier Group ($KIE) | 0.4% | 0.4% | 0.5% | 0.3% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| James Halstead ($JHD) | 47.1% | 46.5% | 39.9% | 36.7% | - |
| Titon Hldgs ($TON) | 13.3% | 12.0% | 12.2% | 9.5% | - |
| Volution Group ($FAN) | 9.0% | 9.2% | 6.9% | 8.8% | - |
| Alumasc Group ($ALU) | 47.8% | 50.2% | 23.1% | 4.8% | 7.8% |
| Aukett Swanke Group ($AUK) | 9.6% | -6.9% | -41.3% | -0.9% | - |
| |
|---|
| Median (8 companies) | 9.1% | 8.7% | 7.9% | 2.0% | 1.3% |
|---|
| Kier Group ($KIE) | -2.2% | -1.6% | 7.7% | -18.6% | -16.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Volution Group ($FAN) | 1.0x | 1.0x | 2.1x | 1.7x | - |
| Alumasc Group ($ALU) | -1.0x | -0.6x | 0.6x | 1.5x | 1.9x |
| James Halstead ($JHD) | -0.9x | -1.0x | - | -1.3x | - |
| Titon Hldgs ($TON) | -1.0x | -1.3x | -1.3x | -1.9x | - |
| Aukett Swanke Group ($AUK) | -0.6x | - | - | -3.0x | - |
| |
|---|
| Median (5 companies) | -0.7x | -0.2x | -0.7x | -1.3x | 1.9x |
|---|
