Wilmington Group reports 58.1% Net Income decline in 2020 and 7.7% Revenue decline
17 Sep 2020 • About Wilmington Group (
$WIL) • By InTwits
Wilmington Group reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 16.5% in FY2020, 20.2% in FY2019, 10.6% in FY2018, 21.7% in FY2017, 5.9% in FY2016
- Wilmington Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's in pair with industry average of 2.3%
- CAPEX is quite volatile: £1m in FY2020, £1m in FY2019, £3m in FY2018, £1m in FY2017, £1m in FY2016
- The company has business model with low profitability: ROIC is 8.9%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.2x while industry average is -1.5x
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 decreased on 7.7%. Revenue decline was accelerating on average at -5.1 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.2 pp from -4.4% to -2.3% in FY2020.
Gross Margin decreased on 5.1 pp from 17.2% to 12.1% in FY2020.
Net Income margin decreased on 5.0 pp from 9.1% to 4.1% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Wilmington Group had CAPEX/Revenue of 0.48%. The company's CAPEX/Revenue decreased slightly on 0.60 pp from 1.1% in FY2017 to 0.48% in FY2020. It's average CAPEX/Revenue for the last three years was 1.4%. During the last 5 years CAPEX as a % of Revenue topped in FY2018 at 2.5% and was declining since that time.
Return on investment
The company operates at low ROIC (8.9%) and ROE (10.8%). ROIC decreased on 9.9 pp from 18.8% to 8.9% in FY2020. ROE dropped on 16.3 pp from 27.1% to 10.8% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 3.3x. Net Debt / EBITDA surged on 0.8x from 1.4x to 2.2x in FY2020. Debt jumped on 47.4% while cash surged on 170%.
Wilmington Group has no short term refinancing risk: cash is higher than short term debt (805.5%).
Valuation and dividends
Wilmington Group's trades at EV/EBITDA 7.8x and P/E 22.4x.
Financial and operational results
FY ended 30 Jun 2020
Wilmington Group ($WIL) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 105.7 | 120.3 | 121.3 | 122.5 | 113.1 | -7.7% |
| Gross Profit | 75.3 | 20.4 | 21.8 | 21.0 | 13.6 | -35.1% |
| SG&A | 32.0 | | | | | |
| EBITDA | 6.2 | 26.1 | 12.9 | 24.8 | 18.7 | -24.5% |
| Net Income | -6.4 | 12.8 | -0.4 | 11.1 | 4.7 | -58.1% |
Balance Sheet
|
|---|
| Cash | 14.6 | 10.7 | 10.8 | 7.9 | 21.4 | 170.5% |
| Short Term Debt | 2.2 | 0.9 | 0.0 | 0.0 | 2.7 | |
| Long Term Debt | 46.7 | 49.4 | 50.4 | 41.8 | 59.0 | 41.1% |
Cash flow
|
|---|
| Capex | 0.6 | 1.3 | 3.1 | 1.3 | 0.5 | -59.6% |
Ratios
|
|---|
| Revenue growth | 11.2% | 13.8% | 0.8% | 1.0% | -7.7% | |
| EBITDA growth | -69.9% | 321.2% | -50.6% | 91.9% | -24.5% | |
|
|---|
| Gross Margin | 71.2% | 17.0% | 18.0% | 17.2% | 12.1% | -5.1% |
| EBITDA Margin | 5.9% | 21.7% | 10.6% | 20.2% | 16.5% | -3.7% |
| SG&A, % of revenue | 30.3% | | | | | |
| Net Income Margin | -6.1% | 10.7% | -0.3% | 9.1% | 4.1% | -5.0% |
| CAPEX, % of revenue | 0.6% | 1.1% | 2.5% | 1.1% | 0.5% | -0.6% |
|
|---|
| ROIC | -1.4% | 17.9% | 4.3% | 18.8% | 8.9% | -9.9% |
| ROE | -13.1% | 27.7% | -0.9% | 27.1% | 10.8% | -16.3% |
| Net Debt/EBITDA | 5.5x | 1.5x | 3.1x | 1.4x | 2.2x | 0.8x |
Peers in Media
Below you can find Wilmington Group benchmarking vs. other companies in Media 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 |
|---|
| Ite Group ($ITE) | -1.0% | 13.5% | 15.1% | 25.6% | - |
| Yougov ($YOU) | 15.9% | 21.4% | 8.9% | 17.1% | - |
| Reed Elsevier ($REL) | 15.4% | 6.6% | 2.1% | 5.1% | - |
| Dods(Group ($DODS) | - | 1.8% | 3.1% | 3.5% | 30.5% |
| Catalyst Media Group ($CMX) | 0.0% | 0.0% | 0.0% | 0.0% | - |
| |
|---|
| Median (6 companies) | 3.7% | 3.1% | 9.1% | 4.3% | 30.5% |
|---|
| Wilmington Group ($WIL) | - | 13.8% | 0.8% | 1.0% | -7.7% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Yougov ($YOU) | 77.9% | 80.1% | 81.6% | 82.3% | - |
| Reed Elsevier ($REL) | 63.9% | 64.2% | 64.7% | 65.0% | - |
| Ite Group ($ITE) | 43.6% | 38.9% | 38.7% | 39.6% | - |
| Dods(Group ($DODS) | 38.0% | 41.3% | 40.5% | 37.0% | 32.2% |
| |
|---|
| Median (4 companies) | 41.9% | 40.7% | 44.4% | 52.3% | 32.2% |
|---|
| Wilmington Group ($WIL) | 71.2% | 17.0% | 18.0% | 17.2% | 12.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Reed Elsevier ($REL) | 33.9% | 34.4% | 34.5% | 34.8% | - |
| Yougov ($YOU) | 12.2% | 14.2% | 17.2% | 22.1% | - |
| Ite Group ($ITE) | 7.0% | 4.5% | 3.7% | 16.3% | - |
| Daily Mail & General Trust ($DMGT) | 9.8% | -3.7% | 8.2% | 10.1% | - |
| Dods(Group ($DODS) | 12.3% | 15.9% | 12.3% | -15.3% | 6.3% |
| |
|---|
| Median (6 companies) | 7.0% | 6.8% | 8.8% | 13.2% | 6.3% |
|---|
| Wilmington Group ($WIL) | 5.9% | 21.7% | 10.6% | 20.2% | 16.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Yougov ($YOU) | 1.1% | 0.8% | 0.8% | 2.0% | - |
| Ite Group ($ITE) | 1.8% | 2.1% | 2.4% | 1.7% | - |
| Daily Mail & General Trust ($DMGT) | 1.4% | 1.3% | 20.0% | 1.2% | - |
| Reed Elsevier ($REL) | 0.7% | 0.7% | 0.7% | 0.6% | - |
| Dods(Group ($DODS) | 0.6% | 12.7% | 1.3% | 0.5% | 0.7% |
| |
|---|
| Median (6 companies) | 0.7% | 0.8% | 1.0% | 0.9% | 0.7% |
|---|
| Wilmington Group ($WIL) | 0.6% | 1.1% | 2.5% | 1.1% | 0.5% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Reed Elsevier ($REL) | 21.4% | 21.4% | 21.0% | 21.6% | - |
| Yougov ($YOU) | 6.7% | 10.2% | 14.4% | 21.1% | - |
| Daily Mail & General Trust ($DMGT) | 11.4% | -11.1% | 2.9% | 6.2% | - |
| Ite Group ($ITE) | -4.4% | -5.3% | -2.9% | 1.8% | - |
| Catalyst Media Group ($CMX) | -0.3% | -0.4% | -0.4% | -0.5% | - |
| |
|---|
| Median (6 companies) | 2.6% | 0.8% | 3.3% | 4.0% | -2.3% |
|---|
| Wilmington Group ($WIL) | -1.4% | 17.9% | 4.3% | 18.8% | 8.9% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Ite Group ($ITE) | 6.3x | 7.3x | 12.7x | 3.1x | - |
| Reed Elsevier ($REL) | 2.2x | 2.0x | 2.4x | 2.3x | - |
| Daily Mail & General Trust ($DMGT) | 3.7x | - | -0.1x | -0.6x | - |
| Yougov ($YOU) | -1.5x | -1.5x | -1.5x | -1.3x | - |
| |
|---|
| Median (4 companies) | -0.1x | 0.5x | 0.0x | 0.8x | 4.5x |
|---|
| Wilmington Group ($WIL) | 5.5x | 1.5x | 3.1x | 1.4x | 2.2x |
