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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. £201620172018201920202020/2019
P&L
Revenue21.222.778.9104.0113.99.5%
Gross Profit3.14.120.127.731.614.2%
SG&A3.44.523.924.127.514.2%
EBITDA2.30.2-0.98.811.226.3%
Net Income31.1-0.3-4.52.51.4-44.8%
Balance Sheet
Cash56.527.76.68.95.1-42.9%
Short Term Debt4.20.37.95.78.142.8%
Long Term Debt1.30.95.85.213.3154.1%
Cash flow
Capex1.10.52.72.34.070.0%
Ratios
Revenue growth-6.1%7.3%247.2%31.9%9.5%
EBITDA growth36.7%-92.1%-622.9%-1,045.2%26.3%

Gross Margin14.9%17.9%25.5%26.6%27.8%1.1%
EBITDA Margin10.7%0.8%-1.2%8.5%9.8%1.3%
SG&A, % of revenue15.9%19.9%30.3%23.1%24.1%1.0%
Net Income Margin147.0%-1.3%-5.7%2.4%1.2%-1.2%
CAPEX, % of revenue5.0%2.1%3.4%2.3%3.5%1.2%

ROIC-0.4%-0.8%-5.9%4.3%4.7%0.4%
ROE62.9%-0.5%-7.9%3.6%2.0%-1.6%
Net Debt/EBITDA-22.4x-147.8x0.2x1.5x1.2x

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%