1Pm Net Income dropped on 75.5% and EBITDA Margin dropped on 17.1 pp from 27.7% to 10.6%
22 Sep 2020 • About 1Pm (
$OPM) • By InTwits
1Pm reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- 1Pm has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.6%. At the same time it's a lot of higher than industry average of 1.5%.
- CAPEX is quite volatile: £0m in FY2020, £1m in FY2019, £1m in FY2018, £1m in FY2017, £1m in FY2016
- The company has potentially unprofitable business model: ROIC is 3.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.5x 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 8.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 7.7% to 9.3% in FY2020.
Gross Margin dropped on 13.5 pp from 67.7% to 54.2% in FY2020. SG&A as a % of Revenue increased on 2.2 pp from 41.8% to 44.0% in FY2020. SG&A as a % of Revenue followed a growing trend at 2.3 pp per annum in FY2016-FY2020.
Net Income margin dropped on 14.6 pp from 20.0% to 5.4% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 1.3%. The company showed decline in CAPEX/Revenue of 5.1 pp from 6.4% in FY2017 to 1.3% in FY2020. It's average CAPEX/Revenue for the last three years was 2.4%. During the last 5 years CAPEX as a % of Revenue topped in FY2017 at 6.4% and was declining since that time.
Return on investment
The company operates at low ROIC (3.7%) and ROE (2.9%). ROIC dropped on 10.6 pp from 14.3% to 3.7% in FY2020. ROE decreased on 9.7 pp from 12.5% to 2.9% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.5x and Debt / EBITDA is 0.9x. Net Debt / EBITDA surged on 0.3x from 0.2x to 0.5x in FY2020. Debt dropped on 24.1% while cash dropped on 29.6%.
1Pm has short term refinancing risk: cash is only 50.1% of short term debt.
Valuation and dividends
1Pm's trades at EV/EBITDA 5.3x and P/E 9.5x.
Financial and operational results
FY ended 31 May 2020
1Pm ($OPM) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 12.554 | 16.944 | 30.013 | 31.814 | 29.062 | -8.7% |
| Gross Profit | 8.074 | 10.850 | 19.895 | 21.543 | 15.743 | -26.9% |
| SG&A | 4.290 | 6.469 | 11.979 | 13.292 | 12.793 | -3.8% |
| EBITDA | 3.772 | 4.665 | 8.537 | 8.805 | 3.075 | -65.1% |
| Net Income | 2.866 | 3.286 | 6.402 | 6.352 | 1.555 | -75.5% |
Balance Sheet
|
|---|
| Cash | 0.910 | 2.078 | 2.070 | 1.851 | 1.304 | -29.6% |
| Short Term Debt | 1.248 | 0.949 | 2.625 | 3.278 | 2.605 | -20.5% |
| Long Term Debt | 0.399 | 0.250 | 1.603 | 0.469 | 0.238 | -49.3% |
Cash flow
|
|---|
| Capex | 0.547 | 1.089 | 1.034 | 0.778 | 0.375 | -51.8% |
Ratios
|
|---|
| Revenue growth | 126.9% | 35.0% | 77.1% | 6.0% | -8.7% | |
| EBITDA growth | 119.8% | 23.7% | 83.0% | 3.1% | -65.1% | |
|
|---|
| Gross Margin | 64.3% | 64.0% | 66.3% | 67.7% | 54.2% | -13.5% |
| EBITDA Margin | 30.0% | 27.5% | 28.4% | 27.7% | 10.6% | -17.1% |
| SG&A, % of revenue | 34.2% | 38.2% | 39.9% | 41.8% | 44.0% | 2.2% |
| Net Income Margin | 22.8% | 19.4% | 21.3% | 20.0% | 5.4% | -14.6% |
| CAPEX, % of revenue | 4.4% | 6.4% | 3.4% | 2.4% | 1.3% | -1.2% |
|
|---|
| ROIC | 17.8% | 15.1% | 19.4% | 14.3% | 3.7% | -10.6% |
| ROE | 15.8% | 12.5% | 16.8% | 12.5% | 2.9% | -9.7% |
| Net Debt/EBITDA | 0.2x | -0.2x | 0.3x | 0.2x | 0.5x | 0.3x |
Peers in Financial Services
Below you can find 1Pm 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 ($IPX) | 6.8% | 55.2% | 100.9% | 12.2% | - |
| |
|---|
| Median (16 companies) | 5.9% | 12.9% | 14.3% | 5.6% | 3.1% |
|---|
| 1Pm ($OPM) | - | 35.0% | 77.1% | 6.0% | -8.7% |
Top companies by Gross margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Afh Financial Group ($AFHP) | 55.4% | 53.4% | 54.4% | 53.4% | - |
| Starvest ($SVE) | 38.4% | 49.4% | - | 18.5% | - |
| |
|---|
| Median (2 companies) | 55.4% | 49.4% | 53.8% | 35.9% | 20.3% |
|---|
| 1Pm ($OPM) | 64.3% | 64.0% | 66.3% | 67.7% | 54.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mxc Capital ($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 ($PLUS) | 46.0% | 59.3% | 70.2% | 54.2% | - |
| City Of London Investment Group ($CLIG) | 32.5% | 37.5% | 37.8% | 33.9% | 36.8% |
| |
|---|
| Median (11 companies) | 20.8% | 22.1% | 24.0% | 29.5% | 30.8% |
|---|
| 1Pm ($OPM) | 30.0% | 27.5% | 28.4% | 27.7% | 10.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mattioli Woods ($MTW) | 2.6% | 16.3% | 13.2% | 2.9% | 1.4% |
| Commercial Bank Of Qatar(The) ($CBQS) | 3.3% | 1.8% | 3.8% | 1.9% | - |
| City Of London Investment Group ($CLIG) | 0.6% | 1.6% | 0.4% | 1.3% | 0.2% |
| 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) | 0.9% | 1.0% | 1.0% | 0.5% | 0.5% |
|---|
| 1Pm ($OPM) | 4.4% | 6.4% | 3.4% | 2.4% | 1.3% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Plus500 Ltd ($PLUS) | 118.9% | 143.2% | 196.2% | 65.4% | - |
| City Of London Investment Group ($CLIG) | 55.3% | 71.6% | 63.7% | 47.5% | 52.0% |
| Impax Asset Management Group ($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% | - |
| |
|---|
| Median (19 companies) | 8.6% | 9.6% | 7.5% | 8.9% | 8.9% |
|---|
| 1Pm ($OPM) | 17.8% | 15.1% | 19.4% | 14.3% | 3.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Redde ($REDD) | 1.3x | 1.3x | 1.8x | 1.6x | 2.4x |
| Afh Financial Group ($AFHP) | -1.0x | -1.1x | -1.8x | 0.2x | - |
| Starvest ($SVE) | -0.1x | -1.5x | - | -0.2x | - |
| Impax Asset Management Group ($IPX) | -0.6x | -2.0x | -0.3x | -0.5x | - |
| City Of London Investment Group ($CLIG) | -1.3x | -1.2x | -1.5x | -1.3x | -1.0x |
| |
|---|
| Median (11 companies) | -1.3x | -1.6x | -1.2x | -1.5x | -1.3x |
|---|
| 1Pm ($OPM) | 0.2x | -0.2x | 0.3x | 0.2x | 0.5x |
