Stewart & Wight Plc :STE-GB: Earnings Analysis: 2016 By the Numbers : June 13, 2016

Stewart & Wight Plc reports financial results for the year ended March 31, 2016.

We analyze the earnings along side the following peers of Stewart & Wight Plc – Helical Bar plc (HLCL-GB) that have also reported for this period.

Highlights

  • Year-on-year change in operating cash flow of 16.52% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings growth from operating margin improvements as well as one-time items.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2012 2013 2014 2015 2016
Relevant Numbers (Annual)
Revenues 1.09 1.16 1 0.94 0.9
Revenue Growth (YOY) N/A N/A N/A N/A N/A
Earnings -1.53 -0.24 -0.09 0.78 1.58
Earnings Growth (YOY) -525.45 84.13 62.6 953.43 104.22
Net Margin -140.41 -20.94 -9.07 82.3 175.59
EPS N/A N/A N/A N/A 1.01
Return on Equity -13.26 -2.36 -0.94 7.94 14.98
Return on Assets -10.44 -1.84 -0.8 7.62 13.81

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Cash Versus Earnings – Sustainable Performance?

Operating Cash Flow Growth Versus Earnings Growth

STE-GB‘s change in operating cash flow of 16.52% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Margins

The company’s earnings growth has also been influenced by the following factors: (1) Improvements in operating (EBIT) margins from 77.00% to 96.98% and (2) one-time items. The company’s pretax margins are now 190.98% compared to 100.32% for the same period last year.

EBIT Margin Versus PreTax Margin
EBIT Margin History
PreTax Margin History

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Company Profile

Stewart & Wight Plc engages in the activity of property investment. Its principal business consists of the acquisition and management of investment properties, majority of which are let on full repairing and insuring leases. The company was founded in 1898 and is headquartered in London, the United Kingdom.

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