Avingtrans EBITDA jumped on 26.3% and Revenue increased on 9.5%
30 Sep 2020 • About Avingtrans (
$AVG) • By InTwits
Avingtrans reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Avingtrans is a fast growth stock: FY2020 revenue growth was 9.5%, 5 year revenue CAGR was 38.2% at FY2020 ROIC 4.7%
- EBITDA Margin is quite volatile: 9.8% in FY2020, 8.5% in FY2019, -1.2% in FY2018, 0.8% in FY2017, 10.7% in FY2016
- Avingtrans has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.3%. At the same time it's in pair with industry average of 2.8%
- CAPEX is quite volatile: £4m in FY2020, £2m in FY2019, £3m in FY2018, £0m in FY2017, £1m in FY2016
- The company has potentially unprofitable business model: ROIC is 4.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.5x while industry average is -0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Avingtrans's Revenue increased on 9.5%. During the last 5 years Revenue growth topped in FY2018 at 247% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.5 pp from 9.1% to 13.6% in FY2020. During FY2016-FY2020 EBITDA Margin bottomed in FY2018 at -1.2% and was growing since that time.
Gross Margin increased slightly on 1.1 pp from 26.6% to 27.8% in FY2020. Gross Margin followed a growing trend at 3.5 pp per annum in the last 5 years. SG&A as a % of Revenue increased slightly on 0.99 pp from 23.1% to 24.1% in FY2020.
Net Income margin decreased slightly on 1.2 pp from 2.4% to 1.2% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Avingtrans had CAPEX/Revenue of 3.5%. The company's CAPEX/Revenue increased slightly on 1.4 pp from 2.1% in FY2017 to 3.5% in FY2020. Average CAPEX/Revenue for the last three years was 3.0%.
Return on investment
The company operates at low ROIC (4.7%) and ROE (2.0%). ROIC showed almost no change in FY2020. ROE decreased slightly on 1.6 pp from 3.6% to 2.0% in FY2020. During the last 5 years ROIC bottomed in FY2018 at -5.9% and was growing since that time.
Leverage (Debt)
Debt level is 1.5x Net Debt / EBITDA and 1.9x Debt / EBITDA. Net Debt / EBITDA surged on 1.2x from 0.2x to 1.5x in FY2020. Debt jumped on 96.1% while cash dropped on 42.9%.
Avingtrans has short term refinancing risk: cash is only 62.6% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 9.3x and P/E 63.1x.
Financial and operational results
FY ended 31 May 2020
Avingtrans ($AVG) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 21.2 | 22.7 | 78.9 | 104.0 | 113.9 | 9.5% |
| Gross Profit | 3.1 | 4.1 | 20.1 | 27.7 | 31.6 | 14.2% |
| SG&A | 3.4 | 4.5 | 23.9 | 24.1 | 27.5 | 14.2% |
| EBITDA | 2.3 | 0.2 | -0.9 | 8.8 | 11.2 | 26.3% |
| Net Income | 31.1 | -0.3 | -4.5 | 2.5 | 1.4 | -44.8% |
Balance Sheet
|
|---|
| Cash | 56.5 | 27.7 | 6.6 | 8.9 | 5.1 | -42.9% |
| Short Term Debt | 4.2 | 0.3 | 7.9 | 5.7 | 8.1 | 42.8% |
| Long Term Debt | 1.3 | 0.9 | 5.8 | 5.2 | 13.3 | 154.1% |
Cash flow
|
|---|
| Capex | 1.1 | 0.5 | 2.7 | 2.3 | 4.0 | 70.0% |
Ratios
|
|---|
| Revenue growth | -6.1% | 7.3% | 247.2% | 31.9% | 9.5% | |
| EBITDA growth | 36.7% | -92.1% | -622.9% | -1,045.2% | 26.3% | |
|
|---|
| Gross Margin | 14.9% | 17.9% | 25.5% | 26.6% | 27.8% | 1.1% |
| EBITDA Margin | 10.7% | 0.8% | -1.2% | 8.5% | 9.8% | 1.3% |
| SG&A, % of revenue | 15.9% | 19.9% | 30.3% | 23.1% | 24.1% | 1.0% |
| Net Income Margin | 147.0% | -1.3% | -5.7% | 2.4% | 1.2% | -1.2% |
| CAPEX, % of revenue | 5.0% | 2.1% | 3.4% | 2.3% | 3.5% | 1.2% |
|
|---|
| ROIC | -0.4% | -0.8% | -5.9% | 4.3% | 4.7% | 0.4% |
| ROE | 62.9% | -0.5% | -7.9% | 3.6% | 2.0% | -1.6% |
| Net Debt/EBITDA | -22.4x | -147.8x | | 0.2x | 1.5x | 1.2x |
Peers in Industrial Engineering
Below you can find Avingtrans benchmarking vs. other companies in Industrial Engineering 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Pressure Technologies ($PRES) | -33.6% | 7.5% | -16.1% | -12.3% | - |
| |
|---|
| Median (1 company) | 4.0% | 8.4% | 14.8% | -12.3% | - |
|---|
| Avingtrans ($AVG) | - | 7.3% | 247.2% | 31.9% | 9.5% |
Top companies by ROIC, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Pressure Technologies ($PRES) | -1.6% | -3.1% | -5.3% | - | - |
| |
|---|
| Median (1 company) | 7.1% | 7.6% | 6.1% | - | - |
|---|
| Avingtrans ($AVG) | -0.4% | -0.8% | -5.9% | 4.3% | 4.7% |
