IT Ltd reports 19.5% EBITDA growth and 6.4% Revenue growth
26/05/2015 • About IT Ltd (
$999) • By InTwits
IT Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- IT Ltd is a growth stock: FY2015 revenue growth was 6.4%, 5 year revenue CAGR was 19.1% at FY2015 ROIC 11.3%
- IT Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.4%. At the same time it's in pair with industry average of 6.6%.
- CAPEX is quite volatile: 55.3 in 2015, 194 in 2014, 167 in 2013, 48.7 in 2012, 82.9 in 2011
- The company has business model with average profitability: ROIC is at 11.3%
- It operates with high leverage: Net Debt/EBITDA is -0.7x while industry average is -0.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
IT Ltd ($999) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,834 | 5,742 | 6,543 | 6,747 | 7,181 | 6.4% |
| Gross Profit | 2,429 | 3,540 | 3,850 | 4,044 | 4,464 | 10.4% |
| EBITDA | 583 | 784 | 721 | 698 | 835 | 19.5% |
| Net Income | 388 | 471 | 384 | 280 | 312 | 11.7% |
Balance Sheet
|
|---|
| Cash | 776 | 627 | 961 | 2,315 | 2,294 | -0.9% |
| Short Term Debt | 215 | 263 | 366 | 496 | 267 | -46.1% |
| Long Term Debt | 379 | 437 | 668 | 1,495 | 1,469 | -1.7% |
Cash flow
|
|---|
| Capex | 486 | 387 | 314 | 259 | 275 | 6.3% |
Ratios
|
|---|
| Revenue growth | 28.0% | 49.7% | 14.0% | 3.1% | 6.4% | |
| EBITDA growth | 35.4% | 34.6% | -8.1% | -3.2% | 19.5% | |
| Gross Margin | 63.3% | 61.7% | 58.8% | 59.9% | 62.2% | 2.2% |
| EBITDA Margin | 15.2% | 13.7% | 11.0% | 10.3% | 11.6% | 1.3% |
| Net Income Margin | 10.1% | 8.2% | 5.9% | 4.1% | 4.4% | 0.2% |
| CAPEX, % of revenue | 12.7% | 6.7% | 4.8% | 3.8% | 3.8% | -0.0% |
| ROIC | 22.3% | 20.3% | 14.2% | 10.1% | 11.3% | 1.2% |
| ROE | 23.3% | 22.9% | 15.9% | 10.5% | 11.1% | 0.6% |
| Net Debt/EBITDA | -0.3x | 0.1x | 0.1x | -0.5x | -0.7x | -0.2x |
Revenue and profitability
The company's Revenue increased on 6.4% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.96 pp from 21.9% to 22.8% in 2015.
Gross Margin increased on 2.2 pp from 59.9% to 62.2% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 3.8%. The company's CAPEX/Revenue decreased on 2.9 pp from 6.7% in FY2012 to 3.8% in FY2015. Average CAPEX/Revenue for the last three years was 4.2%.
Return on investment
The company operates at low ROIC (11.31%) and ROE (11.09%). ROIC increased slightly on 1.2 pp from 10.1% to 11.3% in FY2015. ROE increased slightly on 0.64 pp from 10.5% to 11.1% in FY2015.
Leverage (Debt)
Debt level is -0.7x Net Debt / EBITDA and 2.1x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from -0.5x to -0.7x in FY2015. Debt dropped on 12.8% in FY2015 while cash decreased slightly on 0.92% in FY2015.
Appendix 1: Peers in Retail
Below we provide IT Ltd benchmarking against other companies in Retail industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Household Holdings Ltd ($692) | -87.0% | -32.8% | 5,357.9% | 76.2% | |
| Ming Fung Jewellery Group Ltd ($860) | 21.9% | 3.3% | -14.9% | 54.3% | |
| Merry Garden Holdings Ltd ($1237) | 53.9% | 37.1% | 12.8% | 47.6% | |
| Luk Fook Holdings International Ltd ($590) | 50.2% | 47.2% | 12.6% | 43.3% | |
| NewOcean Energy Holdings Ltd ($342) | 19.3% | 23.1% | 15.9% | 36.0% | |
| |
|---|
| Median (108 companies) | 20.7% | 9.9% | 5.7% | 2.7% | 6.4% |
|---|
| IT Ltd ($999) | | 49.7% | 14.0% | 3.1% | 6.4% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Culture Landmark Investment Ltd ($674) | 77.5% | 91.1% | 99.4% | 99.5% | |
| Modern Beauty Salon Holdings Ltd ($919) | 97.3% | 97.4% | 95.9% | 96.8% | |
| Vongroup Ltd ($318) | | | | 95.1% | |
| Nanjing Sinolife United Co Ltd ($3332) | 80.6% | 86.5% | 89.3% | 90.9% | |
| Embry Holdings Ltd ($1388) | 82.3% | 81.2% | 80.4% | 82.3% | |
| |
|---|
| Median (97 companies) | 40.0% | 37.7% | 38.0% | 35.6% | 51.4% |
|---|
| IT Ltd ($999) | 63.3% | 61.7% | 58.8% | 59.9% | 62.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Maoye International Holdings Ltd ($848) | 45.5% | 47.4% | 46.3% | 73.2% | |
| China Dongxiang Group Co Ltd ($3818) | 5.6% | 6.0% | 5.6% | 58.3% | |
| Nanjing Sinolife United Co Ltd ($3332) | 47.8% | 51.6% | 56.9% | 54.4% | |
| Lifestyle International Holdings Ltd ($1212) | 49.6% | 47.5% | 47.0% | 44.7% | |
| Golden Eagle Retail Group Ltd ($3308) | 52.1% | 48.5% | 47.3% | 42.8% | |
| |
|---|
| Median (108 companies) | 13.2% | 9.7% | 7.1% | 8.3% | 18.8% |
|---|
| IT Ltd ($999) | 15.2% | 13.7% | 11.0% | 10.3% | 11.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Intime Retail Group Co Ltd ($1833) | 58.4% | 28.3% | 55.4% | 37.0% | |
| Future Bright Holdings Ltd ($703) | 6.2% | 2.6% | 3.7% | 36.8% | |
| Sage International Group Ltd ($8082) | 20.4% | 236.6% | 28.2% | 35.4% | |
| Maoye International Holdings Ltd ($848) | 30.9% | 32.8% | 24.1% | 31.5% | |
| Tsui Wah Holdings Ltd ($1314) | 5.2% | 8.3% | 9.3% | 30.5% | |
| |
|---|
| Median (108 companies) | 3.8% | 4.0% | 3.6% | 3.4% | 6.1% |
|---|
| IT Ltd ($999) | 12.7% | 6.7% | 4.8% | 3.8% | 3.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 48.1% | 50.7% | -4.6% | 81.3% | |
| Starbucks Corp ($4337) | 36.4% | 36.4% | -6.0% | 52.8% | |
| Sa Sa International Holdings Ltd ($178) | 45.7% | 53.5% | 52.7% | 49.0% | |
| Coach Inc ($6388) | 82.0% | 82.3% | 68.7% | 45.0% | |
| Nanjing Sinolife United Co Ltd ($3332) | 57.4% | 67.3% | 68.1% | 32.2% | |
| |
|---|
| Median (108 companies) | 16.6% | 11.8% | 8.1% | 8.2% | 20.9% |
|---|
| IT Ltd ($999) | 22.3% | 20.3% | 14.2% | 10.1% | 11.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sparkle Roll Group Ltd ($970) | -0.8x | 0.6x | 4.0x | 9.3x | |
| China Yongda Automobiles Services Holdings Ltd ($3669) | 3.3x | 3.4x | 4.7x | 5.5x | |
| Zhongsheng Group Holdings Ltd ($881) | 2.2x | 4.6x | 4.5x | 5.3x | |
| NewOcean Energy Holdings Ltd ($342) | 35.2x | 6.2x | 6.1x | 5.3x | |
| Century Ginwa Retail Holdings Ltd ($162) | 6.5x | 2.0x | 2.5x | 4.8x | |
| |
|---|
| Median (84 companies) | -0.8x | -0.6x | -0.9x | -0.2x | -1.0x |
|---|
| IT Ltd ($999) | -0.3x | 0.1x | 0.1x | -0.5x | -0.7x |
