Next Media Ltd Net Income dropped on 31.6% in 2015 and EBITDA Margin decreased slightly on 2.0 pp from 13.9% to 12.0%
15/06/2015 • About Next Media Ltd (
$282) • By InTwits
Next Media Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 12.0% in FY2015, 13.9% in FY2014, 18.8% in FY2013, 20.2% in FY2012, 7.5% in FY2011
- Next Media Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.8%. At the same time it's in pair with industry average of 7.9%.
- CAPEX is quite volatile: 44.4 in FY2015, 46.9 in FY2014, 42.5 in FY2013, 454 in FY2012, 420 in FY2011
- The company has potentially unprofitable business model: ROIC is at 6.8%
- It operates with high leverage: Net Debt/EBITDA is -0.3x while industry average is -2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Next Media Ltd ($282) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,477 | 3,603 | 3,474 | 3,269 | 2,957 | -9.5% |
| Gross Profit | 1,151 | 1,318 | 1,300 | 1,349 | 1,140 | -15.5% |
| EBITDA | 261 | 729 | 655 | 455 | 353 | -22.4% |
| Net Income | -20 | -189 | -968 | 240 | 164 | -31.6% |
Balance Sheet
|
|---|
| Cash | 879 | 726 | 565 | 755 | 500 | -33.8% |
| Short Term Debt | 127 | 289 | 374 | 264 | 78 | -70.3% |
| Long Term Debt | 752 | 725 | 481 | 396 | 307 | -22.5% |
Cash flow
|
|---|
| Capex | 420 | 454 | 42 | 47 | 44 | -5.4% |
Ratios
|
|---|
| Revenue growth | 11.2% | 3.6% | -3.6% | -5.9% | -9.5% | |
| EBITDA growth | -51.1% | 179.5% | -10.2% | -30.4% | -22.4% | |
| Gross Margin | 33.1% | 36.6% | 37.4% | 41.3% | 38.5% | -2.7% |
| EBITDA Margin | 7.5% | 20.2% | 18.8% | 13.9% | 12.0% | -2.0% |
| Net Income Margin | -0.6% | -5.2% | -27.9% | 7.3% | 5.6% | -1.8% |
| CAPEX, % of revenue | 12.1% | 12.6% | 1.2% | 1.4% | 1.5% | 0.1% |
| ROIC | 1.7% | 8.5% | 6.7% | 8.2% | 6.8% | -1.5% |
| ROE | -0.6% | -5.4% | -34.0% | 9.9% | 6.5% | -3.3% |
| Net Debt/EBITDA | 0.0x | 0.4x | 0.4x | -0.2x | -0.3x | -0.1x |
Revenue and profitability
The company's Revenue decreased on 9.5% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased slightly on 2.0 pp from 13.9% to 12.0% in FY2015.
Gross Margin decreased on 2.7 pp from 41.3% to 38.5% in FY2015.
Net Income marign decreased slightly on 1.8 pp from 7.3% to 5.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 1.5%. CAPEX/Revenue dropped on 11.1 pp from 12.6% in FY2012 to 1.5% in FY2015. Average CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at low ROIC (6.77%) and ROE (6.54%). ROIC decreased slightly on 1.5 pp from 8.2% to 6.8% in FY2015. ROE decreased on 3.3 pp from 9.9% to 6.5% in FY2015.
Leverage (Debt)
Debt level is -0.3x Net Debt / EBITDA and 1.1x Debt / EBITDA. Net Debt / EBITDA dropped on 0.1x from -0.2x to -0.3x in FY2015. Debt dropped on 41.6% in FY2015 while cash dropped on 33.8% in FY2015.
Appendix 1: Peers in Media
Below we provide Next Media Ltd benchmarking against other companies in Media 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 |
|---|
| CMMB Vision Holdings Ltd ($471) | | | 168.1% | 27.8% | |
| Culturecom Holdings Ltd ($343) | 4.7% | -24.2% | -7.7% | 16.4% | |
| Sing Pao Media Enterprises Ltd ($8010) | 20.7% | 15.3% | 26.9% | 9.7% | |
| Focus Media Network Ltd ($8112) | 23.7% | -10.6% | 34.6% | 5.6% | |
| Hong Kong Economic Times Holdings Ltd ($423) | 15.0% | 5.6% | 2.7% | 3.1% | |
| |
|---|
| Median (19 companies) | 8.6% | 4.5% | -1.8% | -3.9% | -10.1% |
|---|
| Next Media Ltd ($282) | | 3.6% | -3.6% | -5.9% | -9.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| I-CABLE Communications Ltd ($1097) | 95.6% | 94.8% | 94.7% | 94.1% | |
| Television Broadcasts Ltd ($511) | 65.3% | 62.9% | 60.9% | 59.0% | |
| Modern Media Holdings ($72) | 57.1% | 57.5% | 55.8% | 55.6% | |
| One Media Group Ltd ($426) | 52.0% | 57.3% | 56.7% | 54.5% | 52.7% |
| Focus Media Network Ltd ($8112) | 81.0% | 68.0% | 67.2% | 50.8% | |
| |
|---|
| Median (16 companies) | 47.8% | 39.0% | 40.5% | 36.1% | 45.6% |
|---|
| Next Media Ltd ($282) | 33.1% | 36.6% | 37.4% | 41.3% | 38.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 26.9% | 23.5% | 20.5% | 218.1% | |
| Television Broadcasts Ltd ($511) | 45.2% | 43.2% | 42.3% | 37.3% | |
| Phoenix Satellite Television Holdings Ltd ($2008) | 29.8% | 30.1% | 31.1% | 24.6% | |
| One Media Group Ltd ($426) | 14.4% | 18.7% | 23.0% | 22.8% | 15.2% |
| Media Chinese International Ltd ($685) | 20.0% | 20.0% | 18.3% | 18.1% | 16.5% |
| |
|---|
| Median (19 companies) | 15.1% | 9.9% | 11.5% | 9.8% | 15.8% |
|---|
| Next Media Ltd ($282) | 7.5% | 20.2% | 18.8% | 13.9% | 12.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 3.6% | 7.0% | 5.3% | 52.2% | |
| Culturecom Holdings Ltd ($343) | 12.5% | 10.2% | 38.6% | 24.5% | |
| Phoenix Satellite Television Holdings Ltd ($2008) | 14.6% | 12.0% | 8.5% | 11.4% | |
| I-CABLE Communications Ltd ($1097) | 10.6% | 10.1% | 7.6% | 11.3% | |
| V1 Group Ltd ($82) | 1.4% | 1.9% | 3.2% | 10.1% | |
| |
|---|
| Median (19 companies) | 4.0% | 2.7% | 5.3% | 2.9% | 1.1% |
|---|
| Next Media Ltd ($282) | 12.1% | 12.6% | 1.2% | 1.4% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Media Chinese International Ltd ($685) | 18.7% | 18.6% | 17.8% | 18.4% | 15.6% |
| One Media Group Ltd ($426) | 17.1% | 25.6% | 21.8% | 16.0% | 8.9% |
| Television Broadcasts Ltd ($511) | 26.5% | 23.8% | 22.4% | 15.1% | |
| Phoenix Satellite Television Holdings Ltd ($2008) | 21.5% | 18.5% | 18.4% | 11.7% | |
| Modern Media Holdings ($72) | 23.8% | 20.6% | 10.4% | 9.3% | |
| |
|---|
| Median (19 companies) | 9.8% | 3.7% | 4.3% | 2.6% | 12.3% |
|---|
| Next Media Ltd ($282) | 1.7% | 8.5% | 6.7% | 8.2% | 6.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tom Group Ltd ($2383) | | | | 8.1x | |
| Media Chinese International Ltd ($685) | -1.1x | -1.4x | 0.8x | 0.6x | 0.2x |
| I-CABLE Communications Ltd ($1097) | -2.0x | -4.0x | -0.8x | 0.2x | |
| Modern Media Holdings ($72) | -0.9x | -0.8x | -0.9x | 0.1x | |
| Hong Kong Economic Times Holdings Ltd ($423) | -0.8x | -1.3x | -4.6x | -0.7x | |
| |
|---|
| Median (13 companies) | -1.6x | -1.9x | -1.5x | -1.5x | 0.9x |
|---|
| Next Media Ltd ($282) | 0.0x | 0.4x | 0.4x | -0.2x | -0.3x |
