ASX:MCE

Stock Analysis Report

Matrix Composites & Engineering

Executive Summary

Matrix Composites & Engineering Ltd, together with its subsidiaries, manufactures and supplies engineered products and services to the oil and gas, civil and infrastructure, resources, defense, and transportation industries in Australia and internationally.

Risk Analysis

Has less than 1 year of cash runway

Currently unprofitable and not forecast to become profitable over the next 3 years

Shareholders have been diluted in the past year

Does not have a meaningful market cap (A$38M)



Snowflake Analysis

Excellent balance sheet and overvalued.

Share Price & News

How has Matrix Composites & Engineering's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-2.9%

MCE

-0.07%

AU Energy Services

2.0%

AU Market


1 Year Return

-6.8%

MCE

-10.9%

AU Energy Services

19.8%

AU Market

Return vs Industry: MCE exceeded the Australian Energy Services industry which returned -6.6% over the past year.

Return vs Market: MCE underperformed the Australian Market which returned 19.4% over the past year.


Shareholder returns

MCEIndustryMarket
7 Day-2.9%-0.07%2.0%
30 Day-2.9%4.2%3.8%
90 Day-8.1%18.4%5.8%
1 Year-6.8%-6.8%-8.5%-10.9%25.2%19.8%
3 Year-22.7%-22.7%74.5%59.2%39.6%20.9%
5 Year-44.2%-46.9%60.9%37.5%61.8%25.3%

Price Volatility Vs. Market

How volatile is Matrix Composites & Engineering's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Matrix Composites & Engineering undervalued compared to its fair value and its price relative to the market?

0.37x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate MCE's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate MCE's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: MCE is unprofitable, so we can't compare its PE Ratio to the Energy Services industry average.

PE vs Market: MCE is unprofitable, so we can't compare its PE Ratio to the Australian market.


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: MCE is good value based on its PB Ratio (0.4x) compared to the AU Energy Services industry average (0.5x).


Next Steps

Future Growth

How is Matrix Composites & Engineering forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

10.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MCE is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: MCE is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: MCE is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: MCE's revenue (2.7% per year) is forecast to grow slower than the Australian market (3.8% per year).

High Growth Revenue: MCE's revenue (2.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: MCE is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has Matrix Composites & Engineering performed over the past 5 years?

-49.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: MCE is currently unprofitable.

Growing Profit Margin: MCE is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: MCE is unprofitable, and losses have increased over the past 5 years at a rate of -49.8% per year.

Accelerating Growth: Unable to compare MCE's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MCE is unprofitable, making it difficult to compare its past year earnings growth to the Energy Services industry (19.1%).


Return on Equity

High ROE: MCE has a negative Return on Equity (-9.33%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Matrix Composites & Engineering's financial position?


Financial Position Analysis

Short Term Liabilities: MCE's short term assets (A$27.8M) exceed its short term liabilities (A$14.5M).

Long Term Liabilities: MCE's short term assets (A$27.8M) exceed its long term liabilities (A$723.3K).


Debt to Equity History and Analysis

Debt Level: MCE's debt to equity ratio (7.8%) is considered satisfactory.

Reducing Debt: MCE's debt to equity ratio has reduced from 9.7% to 7.8% over the past 5 years.


Balance Sheet

Inventory Level: MCE has a high level of physical assets or inventory.

Debt Coverage by Assets: MCE's debt is covered by short term assets (assets are 3.8x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: MCE has sufficient cash runway for more than a year based on its current free cash flow.

Forecast Cash Runway: MCE has less than a year of cash runway if free cash flow continues to reduce at historical rates of -76.6% each year


Next Steps

Dividend

What is Matrix Composites & Engineering's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%2.3%markettop25%5.4%industryaverage3.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

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

High Dividend: Unable to evaluate MCE'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 MCE's dividends per share have been stable in the past.

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


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of MCE'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 Matrix Composites & Engineering's salary, the management and board of directors tenure and is there insider trading?

3.3yrs

Average management tenure


CEO

Aaron Begley 0

10.3yrs

Tenure

AU$663,270

Compensation

Mr. Aaron Paul Begley has been the Chief Executive Officer of Matrix Composites & Engineering Limited since September 2009. Mr. Begley has been Managing Director of the Advanced Materials division since 19 ...


CEO Compensation Analysis

Compensation vs Market: Aaron's total compensation ($USD457.74K) is above average for companies of similar size in the Australian market ($USD262.68K).

Compensation vs Earnings: Aaron's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

3.3yrs

Average Tenure

Experienced Management: MCE's management team is considered experienced (3.3 years average tenure).


Board Age and Tenure

10.2yrs

Average Tenure

Experienced Board: MCE's board of directors are seasoned and experienced ( 10.2 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$90,96604 Nov 19
Mike Conway
EntityIndividual
Shares250,000
Max PriceAU$0.37

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.1%.


Management Team

  • Brendan Cocks

    CFO & Joint Company Secretary

    • Tenure: 3.3yrs
    • Compensation: AU$360.48k
  • Aaron Begley

    MD, CEO & Director

    • Tenure: 10.3yrs
    • Compensation: AU$663.27k
  • Julie Jones

    General Counsel & Joint Company Secretary

    • Tenure: 1.5yrs
  • Liz Hodgson

    Human Resource Manager

    • Ian Phillips

      Head of Program Management

      • Robbie Stew

        Head of Operations


        Board Members

        • Peter Hood

          Independent Non-Executive Chairman

          • Tenure: 8.3yrs
          • Compensation: AU$80.00k
        • Steven Cole (68yo)

          Independent Non-Executive Director

          • Tenure: 5.8yrs
          • Compensation: AU$50.00k
        • Aaron Begley

          MD, CEO & Director

          • Tenure: 10.3yrs
          • Compensation: AU$663.27k
        • Craig Duncan

          Independent Non-Executive Director

          • Tenure: 12.1yrs
          • Compensation: AU$50.00k

        Company Information

        Matrix Composites & Engineering Ltd's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Matrix Composites & Engineering Ltd
        • Ticker: MCE
        • Exchange: ASX
        • Founded: 1980
        • Industry: Oil and Gas Equipment and Services
        • Sector: Energy
        • Market Cap: AU$34.789m
        • Shares outstanding: 102.32m
        • Website: https://www.matrixengineered.com

        Number of Employees


        Location

        • Matrix Composites & Engineering Ltd
        • 150 Quill Way
        • Henderson
        • Western Australia
        • 6166
        • Australia

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        MCEASX (Australian Securities Exchange)YesOrdinary SharesAUAUDNov 2009
        8MEDB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 2009
        MCECHIA (Chi-X Australia)YesOrdinary SharesAUAUDNov 2009

        Biography

        Matrix Composites & Engineering Ltd, together with its subsidiaries, manufactures and supplies engineered products and services to the oil and gas, civil and infrastructure, resources, defense, and transportation industries in Australia and internationally. It offers conventional riser buoyancy systems; Nautilus riser protection; Riser sealing mandrel; Matrix Longitudinal Groove System (LGS) VIV and Drag Reduction; and Matrix LGS VIV suppression, as well as buoyancy system testing services, such as hydrostatic pressure testing, function and fit-up testing, riser joint stack testing, and displacement testing. The company also provides well construction products, such as Max-R, a range of low friction composite drilling and completions centralizers. In addition, it offers distributed buoyancy clamping systems, IsoBlox buoyancy building block systems, mid water arch buoyancy, permanent subsurface mooring buoyancy, pipeline buckle mitigation buoyancy, steel catenary riser buoyancy, and production riser buoyancy systems; buoyancy balls, cuboids, and tablets; and pipeline installation buoyancy products for the oil and gas markets. Further, the company provides Paragon epoxy resin systems; Kinetica dropped object protection cell systems; energy absorption systems; and Matrix LGS free span remediation solutions. Additionally, it offers Cetrafoam molded pipe cryogenic insulation products; Xirtherm C140 composite cryogenic thermal break blocks; and composite pipe reinforcement systems. The company was founded in 1980 and is headquartered in Henderson, Australia. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/19 10:37
        End of Day Share Price2020/01/17 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.