Sparkle Roll Group Ltd Net Debt / EBITDA jumped on 14.2x from 9.3x to 23.5x in 2015 and Debt surged on 68.6%
26/06/2015 • About Sparkle Roll Group Ltd (
$970) • By InTwits
Sparkle Roll Group Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sparkle Roll Group Ltd doesn't have a profitable business model yet: FY2015 ROIC is -0.1%
- EBITDA Margin is quite volatile: 1.8% in FY2015, 1.1% in FY2014, 2.6% in FY2013, 4.7% in FY2012, 6.5% in FY2011
- Sparkle Roll Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's in pair with industry average of 67.4%.
- CAPEX is quite volatile: 33.2 in FY2015, 80.7 in FY2014, 76.5 in FY2013, 38.8 in FY2012, 71.4 in FY2011
- The company has unprofitable business model: ROIC is at -0.1%
- It operates with high leverage: Net Debt/EBITDA is 23.5x while industry average is -0.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sparkle Roll Group Ltd ($970) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,287 | 4,427 | 3,016 | 3,162 | 2,606 | -17.6% |
| Gross Profit | 367 | 452 | 285 | 162 | 188 | 16.1% |
| SG&A | | | 313 | 339 | 359 | 6.1% |
| EBITDA | 214 | 207 | 78 | 36 | 46 | 26.7% |
| Net Income | 184 | 214 | 66 | 19 | -456 | -2,504.5% |
Balance Sheet
|
|---|
| Cash | 215 | 130 | 274 | 340 | 63 | -81.4% |
| Short Term Debt | 54 | 208 | 548 | 679 | 1,145 | 68.6% |
| Long Term Debt | 0 | 56 | 40 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 71 | 39 | 77 | 81 | 33 | -58.8% |
Ratios
|
|---|
| Revenue growth | 204.3% | 34.7% | -31.9% | 4.9% | -17.6% | |
| EBITDA growth | 54.9% | -3.2% | -62.3% | -53.5% | 26.7% | |
| Gross Margin | 11.2% | 10.2% | 9.4% | 5.1% | 7.2% | 2.1% |
| EBITDA Margin | 6.5% | 4.7% | 2.6% | 1.1% | 1.8% | 0.6% |
| Net Income Margin | 5.6% | 4.8% | 2.2% | 0.6% | -17.5% | -18.1% |
| SG&A, % of revenue | | | 10.4% | 10.7% | 13.8% | 3.1% |
| CAPEX, % of revenue | 2.2% | 0.9% | 2.5% | 2.6% | 1.3% | -1.3% |
| ROIC | 17.2% | 11.8% | 2.0% | -0.3% | -0.1% | 0.3% |
| ROE | 17.2% | 15.8% | 4.3% | 1.2% | -33.9% | -35.1% |
| Net Debt/EBITDA | -0.8x | 0.6x | 4.0x | 9.3x | 23.5x | 14.2x |
Revenue and profitability
Sparkle Roll Group Ltd's Revenue dropped on 17.6% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.62 pp from 1.1% to 1.8% in FY2015.
Gross Margin increased on 2.1 pp from 5.1% to 7.2% in FY2015. SG&A as a % of Revenue increased on 3.1 pp from 10.7% to 13.8% in FY2015.
Net Income marign dropped on 18.1 pp from 0.60% to -17.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 1.3%. The company showed almost no change in CAPEX/Revenue from FY2012 to FY2015. It's average CAPEX/Revenue for the last three years was 2.1%.Sparkle Roll Group Ltd invested a big chunk of EBITDA (72.2%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at negative ROIC (-0.06%) and ROE (-33.93%). ROIC showed almost no change in FY2015. ROE dropped on 35.1 pp from 1.2% to -33.9% in FY2015.
Leverage (Debt)
Debt level is 23.5x Net Debt / EBITDA and 24.9x Debt / EBITDA. Net Debt / EBITDA surged on 14.2x from 9.3x to 23.5x in FY2015. Debt surged on 68.6% in FY2015 while cash dropped on 81.4% in FY2015.
Appendix 1: Peers in Retail
Below you can find Sparkle Roll Group Ltd benchmarking vs. other companies in Retail industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
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) | | 47.2% | 12.6% | 43.3% | -17.1% |
| NewOcean Energy Holdings Ltd ($342) | 19.3% | 23.1% | 15.9% | 36.0% | |
| |
|---|
| Median (108 companies) | 21.8% | 9.9% | 5.9% | 2.7% | -0.0% |
|---|
| Sparkle Roll Group Ltd ($970) | | 34.7% | -31.9% | 4.9% | -17.6% |
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% | 96.7% |
| 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) | 40.8% | 38.0% | 39.9% | 39.5% | 44.9% |
|---|
| Sparkle Roll Group Ltd ($970) | 11.2% | 10.2% | 9.4% | 5.1% | 7.2% |
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) | 13.4% | 10.3% | 7.3% | 8.8% | 8.7% |
|---|
| Sparkle Roll Group Ltd ($970) | 6.5% | 4.7% | 2.6% | 1.1% | 1.8% |
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% | 10.6% |
| |
|---|
| Median (108 companies) | 3.9% | 4.1% | 3.6% | 3.5% | 2.5% |
|---|
| Sparkle Roll Group Ltd ($970) | 2.2% | 0.9% | 2.5% | 2.6% | 1.3% |
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% | 71.8% |
| 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% | 39.8% |
| 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% | 11.9% | 8.2% | 8.3% | 10.7% |
|---|
| Sparkle Roll Group Ltd ($970) | 17.2% | 11.8% | 2.0% | -0.3% | -0.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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 | |
| China ZhengTong Auto Services Holdings Ltd ($1728) | 6.5x | 3.9x | 3.7x | 4.7x | |
| |
|---|
| Median (84 companies) | -0.8x | -0.6x | -0.9x | -0.3x | -0.7x |
|---|
| Sparkle Roll Group Ltd ($970) | -0.8x | 0.6x | 4.0x | 9.3x | 23.5x |
