Linmark Group Ltd reports 45.5% EBITDA decline and 5.3% Revenue decline
14/07/2015 • About Linmark Group Ltd (
$915) • By InTwits
Linmark Group 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: 3.3% in FY2015, 5.8% in FY2014, 5.6% in FY2013, 3.4% in FY2012, 2.6% in FY2011
- Linmark Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has business model with low profitability: ROIC is at 8.6%
- It operates with high leverage: Net Debt/EBITDA is -5.3x while industry average is -24.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Linmark Group Ltd ($915) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 95.8 | 100.6 | 110.0 | 103.4 | 97.9 | -5.3% |
| Gross Profit | 23.0 | 23.5 | 27.6 | 27.0 | 25.0 | -7.3% |
| SG&A | | 22.0 | 23.5 | 23.3 | 23.3 | -0.2% |
| EBITDA | 2.5 | 3.4 | 6.2 | 6.0 | 3.2 | -45.5% |
| Net Income | 0.6 | 2.8 | 5.3 | 4.5 | 1.7 | -62.4% |
Balance Sheet
|
|---|
| Cash | 17.5 | 17.8 | 24.3 | 14.6 | 17.0 | 16.7% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.1 | 1.0 | 0.8 | 0.2 | 0.2 | -14.3% |
Ratios
|
|---|
| Revenue growth | 2.4% | 5.1% | 9.4% | -6.0% | -5.3% | |
| EBITDA growth | -41.4% | 36.0% | 81.9% | -3.4% | -45.5% | |
| Gross Margin | 24.0% | 23.4% | 25.1% | 26.1% | 25.5% | -0.5% |
| EBITDA Margin | 2.6% | 3.4% | 5.6% | 5.8% | 3.3% | -2.4% |
| Net Income Margin | 0.7% | 2.8% | 4.8% | 4.3% | 1.7% | -2.6% |
| SG&A, % of revenue | | 21.9% | 21.4% | 22.6% | 23.8% | 1.2% |
| CAPEX, % of revenue | 0.2% | 1.0% | 0.7% | 0.2% | 0.2% | -0.0% |
| ROIC | 5.0% | 7.5% | 12.6% | 13.1% | 8.6% | -4.5% |
| ROE | 1.7% | 7.4% | 13.1% | 11.8% | 5.1% | -6.7% |
| Net Debt/EBITDA | -7.0x | -5.3x | -3.9x | -2.5x | -5.3x | -2.8x |
Revenue and profitability
The company's Revenue decreased on 5.3% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 2.4 pp from 5.8% to 3.3% in FY2015.
Gross Margin decreased slightly on 0.55 pp from 26.1% to 25.5% in FY2015. SG&A as a % of Revenue increased slightly on 1.2 pp from 22.6% to 23.8% in FY2015.
Net Income marign decreased on 2.6 pp from 4.3% to 1.7% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.15% in FY2015. Linmark Group Ltd's CAPEX/Revenue decreased slightly on 0.86 pp from 1.0% in FY2012 to 0.15% in FY2015. Average CAPEX/Revenue for the last three years was 0.35%.
Return on investment
The company operates at low ROIC (8.55%) and ROE (5.13%). ROIC decreased on 4.5 pp from 13.1% to 8.6% in FY2015. ROE decreased on 6.7 pp from 11.8% to 5.1% in FY2015.
Leverage (Debt)
The company has no debt. Cash jumped on 16.7% in FY2015.
Appendix 1: Peers in Commercial Services
Below you can find Linmark Group Ltd benchmarking vs. other companies in Commercial Services 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 |
|---|
| Global Energy Resources International Group Ltd ($8192) | 429.3% | -61.9% | -27.8% | 2,912.9% | |
| Dingyi Group Investment Ltd ($508) | | 8.8% | -95.9% | 1,361.2% | -32.6% |
| China Smartpay Group Holdings Ltd ($8325) | | 60.0% | 274.7% | 75.6% | 124.5% |
| Goldpac Group Ltd ($3315) | 24.4% | 52.3% | 64.4% | 36.8% | |
| Wonderful Sky Financial Group Holdings Ltd ($1260) | | 21.3% | 4.5% | 33.5% | 14.2% |
| |
|---|
| Median (55 companies) | 19.5% | 7.1% | 4.2% | 9.8% | 10.2% |
|---|
| Linmark Group Ltd ($915) | | 5.1% | 9.4% | -6.0% | -5.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HC International Inc ($2280) | 84.7% | 87.5% | 91.9% | 92.5% | |
| Fu Shou Yuan International Group Ltd ($1448) | 81.6% | 80.5% | 80.4% | 80.0% | |
| China Communication Telecom Services Co Ltd ($8206) | -56.6% | 61.6% | 58.6% | 69.1% | 70.2% |
| Dingyi Group Investment Ltd ($508) | 76.5% | 75.8% | | 64.5% | 86.0% |
| Yuexiu Transport Infrastructure Ltd ($1052) | 67.1% | 66.2% | 66.8% | 62.8% | |
| |
|---|
| Median (52 companies) | 33.8% | 31.9% | 30.5% | 30.9% | 41.4% |
|---|
| Linmark Group Ltd ($915) | 24.0% | 23.4% | 25.1% | 26.1% | 25.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shenzhen International Holdings Ltd ($152) | 69.3% | 60.2% | 65.8% | 97.1% | |
| Shenzhen Expressway Co Ltd ($548) | 80.4% | 74.3% | 79.4% | 76.6% | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 74.3% | 78.3% | 74.5% | 74.0% | |
| Anhui Expressway Co Ltd ($995) | 62.7% | 56.9% | 54.1% | 60.4% | |
| Dragon Crown Group Holdings Ltd ($935) | 57.8% | 67.3% | 62.9% | 60.2% | |
| |
|---|
| Median (55 companies) | 16.0% | 15.9% | 13.3% | 7.9% | -0.0% |
|---|
| Linmark Group Ltd ($915) | 2.6% | 3.4% | 5.6% | 5.8% | 3.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kai Yuan Holdings Ltd ($1215) | 16.8% | 3.9% | 7.0% | 59.8% | |
| COSCO Pacific Ltd ($1199) | 111.3% | 96.6% | 66.6% | 43.3% | |
| Finet Group Ltd ($8317) | 3.9% | 10.3% | 9.1% | 26.0% | 8.4% |
| HC International Inc ($2280) | 15.1% | 8.5% | 28.7% | 24.7% | |
| Dragon Crown Group Holdings Ltd ($935) | 2.5% | 37.2% | 52.0% | 23.0% | |
| |
|---|
| Median (54 companies) | 3.9% | 3.5% | 4.5% | 4.4% | 2.3% |
|---|
| Linmark Group Ltd ($915) | 0.2% | 1.0% | 0.7% | 0.2% | 0.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Packaging Holdings Development Ltd ($1439) | 50.0% | 52.0% | 46.6% | 34.1% | |
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 136.8% | 51.5% | 26.6% | 30.0% | 29.5% |
| 1010 Printing Group Ltd ($1127) | 14.4% | 13.5% | 20.8% | 17.8% | |
| Poly Culture Group Corp Ltd ($3636) | 48.0% | 29.1% | 33.0% | 16.3% | |
| eprint Group Ltd ($1884) | | 33.0% | 34.8% | 15.4% | 18.5% |
| |
|---|
| Median (55 companies) | 5.2% | 5.3% | 3.3% | 3.0% | -1.1% |
|---|
| Linmark Group Ltd ($915) | 5.0% | 7.5% | 12.6% | 13.1% | 8.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dalian Port PDA Co Ltd ($2880) | 5.7x | 5.7x | 4.8x | 4.7x | |
| Sichuan Expressway Co Ltd ($107) | 1.8x | 2.7x | 3.8x | 4.3x | |
| Anxian Yuan China Holdings Ltd ($922) | | | 4.6x | 3.8x | 0.8x |
| Eagle Legend Asia Ltd ($936) | 4.3x | 4.0x | 4.0x | 3.3x | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 2.9x | 4.5x | 3.1x | 2.7x | |
| |
|---|
| Median (34 companies) | 0.0x | 0.2x | -0.4x | -0.5x | -2.0x |
|---|
| Linmark Group Ltd ($915) | -7.0x | -5.3x | -3.9x | -2.5x | -5.3x |
