ASX:UCW

Stock Analysis Report

Executive Summary

UCW Limited, through its subsidiaries, provides education services in Australia and internationally.

Rewards

Trading at 84.4% below its fair value

Earnings grew by 480.8% over the past year

Risk Analysis

Large one-off items impacting financial results

Shareholders have been diluted in the past year

Does not have a meaningful market cap (A$28M)



Snowflake Analysis

Excellent balance sheet with proven track record.

Share Price & News

How has UCW's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: UCW has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.3%

UCW

5.3%

AU Consumer Services

2.6%

AU Market


1 Year Return

44.1%

UCW

27.2%

AU Consumer Services

19.8%

AU Market

Return vs Industry: UCW exceeded the Australian Consumer Services industry which returned 30.8% over the past year.

Return vs Market: UCW exceeded the Australian Market which returned 19.4% over the past year.


Shareholder returns

UCWIndustryMarket
7 Day4.3%5.3%2.6%
30 Day6.5%9.8%4.0%
90 Day19.5%9.7%5.7%
1 Year44.1%44.1%30.8%27.2%25.2%19.8%
3 Year11.7%8.9%4.3%-6.1%40.7%21.9%
5 Yearn/a-18.5%-32.6%62.0%25.5%

Price Volatility Vs. Market

How volatile is UCW's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is UCW undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: UCW (A$0.25) is trading below our estimate of fair value (A$1.61)

Significantly Below Fair Value: UCW is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: UCW is poor value based on its PE Ratio (29.1x) compared to the Consumer Services industry average (19.2x).

PE vs Market: UCW is poor value based on its PE Ratio (29.1x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate UCW's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: UCW is good value based on its PB Ratio (1.9x) compared to the AU Consumer Services industry average (1.9x).


Next Steps

Future Growth

How is UCW forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

17.7%

Forecasted Consumer Services industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as UCW has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has UCW performed over the past 5 years?

28.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UCW has a large one-off gain of A$288.7K impacting its June 30 2019 financial results.

Growing Profit Margin: UCW's current net profit margins (4.3%) are higher than last year (1.3%).


Past Earnings Growth Analysis

Earnings Trend: UCW has become profitable over the past 5 years, growing earnings by 28.8% per year.

Accelerating Growth: UCW's earnings growth over the past year (480.8%) exceeds its 5-year average (28.8% per year).

Earnings vs Industry: UCW earnings growth over the past year (480.8%) exceeded the Consumer Services industry 0.6%.


Return on Equity

High ROE: UCW's Return on Equity (6.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is UCW's financial position?


Financial Position Analysis

Short Term Liabilities: UCW's short term assets (A$7.9M) do not cover its short term liabilities (A$15.8M).

Long Term Liabilities: UCW's short term assets (A$7.9M) exceed its long term liabilities (A$1.3M).


Debt to Equity History and Analysis

Debt Level: UCW's debt to equity ratio (8.2%) is considered satisfactory.

Reducing Debt: UCW had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: UCW's debt is well covered by operating cash flow (270.3%).

Interest Coverage: UCW's interest payments on its debt are well covered by EBIT (12.6x coverage).


Balance Sheet

Inventory Level: UCW has a low level of unsold assets or inventory.

Debt Coverage by Assets: UCW's debt is covered by short term assets (assets are 6.6x debt).


Next Steps

Dividend

What is UCW's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%2.3%markettop25%5.4%industryaverage2.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate UCW's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate UCW's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if UCW's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if UCW's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: UCW is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of UCW's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

What is the CEO of UCW's salary, the management and board of directors tenure and is there insider trading?

4.9yrs

Average board tenure


CEO

Adam Davis 0

3.8yrs

Tenure

AU$283,570

Compensation

Mr. Adam Davis, BappFin, MAICD, has been the Chief Executive Officer and President of UCW Limited since March 24, 2016. Mr. Davis served as the Chief Executive Officer and Managing Director of Tribeca Lear ...


CEO Compensation Analysis

Compensation vs Market: Adam's total compensation ($USD195.70K) is about average for companies of similar size in the Australian market ($USD262.68K).

Compensation vs Earnings: Adam's compensation has increased by more than 20% in the past year.


Board Age and Tenure

4.9yrs

Average Tenure

Experienced Board: UCW's board of directors are considered experienced (4.9 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyAU$1,500,34221 Oct 19
Viburnum Funds Pty Ltd.
EntityCompany
Shares6,788,458
Max PriceAU$2.10
BuyAU$289,49719 Sep 19
Microequities Asset Management Pty Limited
EntityCompany
Shares1,447,481
Max PriceAU$0.20
BuyAU$866,39402 Aug 19
Microequities Asset Management Pty Limited
EntityCompany
Shares5,814,718
Max PriceAU$0.15
BuyAU$40,28729 May 19
Peter Mobbs
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares300,000
Max PriceAU$0.13
BuyAU$17,09827 Mar 19
Adam Davis
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Director
Shares150,000
Max PriceAU$0.11

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 38.4%.


Management Team

  • Lyndon Catzel

    CFO & Company Secretary

    • Tenure: 3.4yrs
    • Compensation: AU$248.27k
  • Adam Davis

    CEO, MD & Director

    • Tenure: 3.8yrs
    • Compensation: AU$283.57k

Board Members

  • Gary Burg

    Non-Executive Chairman

    • Tenure: 3.8yrs
    • Compensation: AU$60.00k
  • Adam Davis

    CEO, MD & Director

    • Tenure: 3.8yrs
    • Compensation: AU$283.57k
  • Jonathan Pager (49yo)

    Independent Non-Executive Director

    • Tenure: 4.9yrs
    • Compensation: AU$50.00k
  • Peter Mobbs

    Independent Non-Executive Director

    • Tenure: 4.9yrs
    • Compensation: AU$40.00k

Company Information

UCW Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: UCW Limited
  • Ticker: UCW
  • Exchange: ASX
  • Founded: 1981
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: AU$29.379m
  • Shares outstanding: 117.51m
  • Website: https://www.ucwlimited.com.au

Location

  • UCW Limited
  • 333 Kent Street
  • Level 1
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
UCWASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJun 2004
UCWCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJun 2004

Biography

UCW Limited, through its subsidiaries, provides education services in Australia and internationally. It offers accredited vocational education in the fields of ageing support, community services, counselling, dance teaching, early childhood education and care, fitness, mental health, remedial massage, sport and recreation management, and yoga teaching. The company was formerly known as Undercoverwear Limited and changed its name to UCW Limited in January 2015. UCW Limited was founded in 1981 and is based in Sydney, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/21 10:30
End of Day Share Price2020/01/21 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.