Crocodile Garments reports 518% CAPEX growth while 19.2% Revenue decline
28/10/2015 • About Crocodile Garments (
$122) • By InTwits
Crocodile Garments reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Crocodile Garments is a company in decline: FY2015 revenue growth was -19.2%, 5 years revenue CAGR was -2.4%
- The company operates at negative EBITDA Margin: -5.8%
- Crocodile Garments spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 is 0.0%. Average EBITDA Margin for the same period was -2.6%0
- Crocodile Garments has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.0%. At the same time it's a lot of higher than industry average of 3.7%.
- CAPEX is quite volatile: 54.6 in FY2015, 8.8 in FY2014, 110 in FY2013, 102 in FY2012, 64.1 in FY2011
- The company has unprofitable business model: ROIC is at -1.9%
- It operates with high leverage: Net Debt/EBITDA is 15.4x 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.
Crocodile Garments ($122) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 514.5 | 505.6 | 499.5 | 501.8 | 405.3 | -19.2% |
| Gross Profit | 337.3 | 327.2 | 303.0 | 302.9 | 251.9 | -16.8% |
| SG&A | | 370.0 | 408.4 | 385.3 | 327.2 | -15.1% |
| EBITDA | 39.8 | -0.2 | -62.6 | -15.4 | -23.6 | 53.1% |
| Net Income | 85.2 | 84.7 | 236.9 | 106.0 | 51.1 | -51.8% |
Balance Sheet
|
|---|
| Cash | 80.0 | 49.7 | 57.6 | 57.2 | 72.1 | 26.1% |
| Short Term Debt | 15.9 | 35.9 | 144.1 | 186.1 | 517.1 | 177.8% |
| Long Term Debt | 24.4 | 233.5 | 316.1 | 301.6 | 26.0 | -91.4% |
Cash flow
|
|---|
| Capex | 64.1 | 101.6 | 110.3 | 8.8 | 54.6 | 518.0% |
Ratios
|
|---|
| Revenue growth | 12.4% | -1.7% | -1.2% | 0.5% | -19.2% | |
| EBITDA growth | 112.5% | -100.6% | 25,565.2% | -75.4% | 53.1% | |
| Gross Margin | 65.5% | 64.7% | 60.7% | 60.4% | 62.1% | 1.8% |
| EBITDA Margin | 7.7% | -0.0% | -12.5% | -3.1% | -5.8% | -2.8% |
| Net Income Margin | 16.6% | 16.7% | 47.4% | 21.1% | 12.6% | -8.5% |
| SG&A, % of revenue | | 73.2% | 81.8% | 76.8% | 80.7% | 3.9% |
| CAPEX, % of revenue | 12.5% | 20.1% | 22.1% | 1.8% | 13.5% | 11.7% |
| ROIC | 2.5% | -1.3% | -4.9% | -1.7% | -1.9% | -0.2% |
| ROE | 9.0% | 7.9% | 18.6% | 7.3% | 3.3% | -4.0% |
| Net Debt/EBITDA | -1.0x | | | | | 0.0x |
Revenue and profitability
The company's Revenue dropped on 19.2% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.5 pp from 2.4% to 5.0% in 2015.
Gross Margin increased slightly on 1.8 pp from 60.4% to 62.1% in FY2015. SG&A as a % of Revenue increased on 3.9 pp from 76.8% to 80.7% in FY2015.
Net Income marign decreased on 8.5 pp from 21.1% to 12.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Crocodile Garments's CAPEX/Revenue was 13.5% in FY2015. Crocodile Garments's CAPEX/Revenue decreased on 6.6 pp from 20.1% in FY2012 to 13.5% in FY2015. Average CAPEX/Revenue for the last three years was 12.4%.
Return on investment
The company operates at negative ROIC (-1.94%) and low but positive ROE (3.34%). ROIC showed almost no change in FY2015. ROE decreased on 4.0 pp from 7.3% to 3.3% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 15.4x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2015. Debt surged on 11.4% in FY2015 while cash surged on 26.1% in FY2015.
Appendix 1: Peers in Apparel
Below you can find Crocodile Garments benchmarking vs. other companies in Apparel 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 |
|---|
| Ares Asia Ltd ($645) | | | | 144.2% | 14.7% |
| Texhong Textile Group Ltd ($2678) | 25.6% | 6.8% | 12.1% | 27.2% | |
| Win Hanverky Holdings Ltd ($3322) | 11.5% | -7.5% | -0.3% | 21.1% | |
| Symphony Holdings Ltd/Hong Kong ($1223) | 27.3% | -94.0% | 46.8% | 20.4% | |
| L & A International Holdings Ltd/ Hong Kong ($8387) | 33.1% | 27.9% | 7.9% | 20.4% | |
| |
|---|
| Median (46 companies) | 25.6% | 5.3% | 1.0% | 5.3% | -0.5% |
|---|
| Crocodile Garments ($122) | | -1.7% | -1.2% | 0.5% | -19.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prada SpA ($1913) | 67.8% | 71.5% | 72.1% | 73.8% | 71.8% |
| China Outfitters Holdings Ltd ($1146) | 76.1% | 74.9% | 74.3% | 70.0% | |
| C.banner International Holdings Ltd ($1028) | 63.5% | 63.3% | 62.0% | 63.4% | |
| S Culture International Holdings Ltd ($1255) | 62.8% | 64.7% | 63.7% | 62.9% | |
| Symphony Holdings Ltd/Hong Kong ($1223) | 15.4% | 38.5% | 42.3% | 59.6% | |
| |
|---|
| Median (45 companies) | 23.7% | 24.3% | 22.9% | 22.1% | 17.0% |
|---|
| Crocodile Garments ($122) | 65.5% | 64.7% | 60.7% | 60.4% | 62.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| HOSA International Ltd ($2200) | 46.3% | 44.4% | 42.2% | 37.6% | |
| Prada SpA ($1913) | 25.9% | 29.6% | 31.7% | 31.7% | 26.8% |
| China Lilang Ltd ($1234) | 26.7% | 26.3% | 26.9% | 29.4% | |
| Cabbeen Fashion Ltd ($2030) | 16.0% | 25.0% | 29.7% | 28.4% | |
| Fuguiniao Co Ltd ($1819) | 22.2% | 24.5% | 26.1% | 26.7% | |
| |
|---|
| Median (46 companies) | 10.7% | 11.0% | 9.3% | 6.1% | 2.0% |
|---|
| Crocodile Garments ($122) | 7.7% | -0.0% | -12.5% | -3.1% | -5.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prada SpA ($1913) | 9.2% | 9.7% | 10.6% | 15.3% | 10.2% |
| Symphony Holdings Ltd/Hong Kong ($1223) | 14.9% | 136.9% | 70.3% | 13.5% | |
| Mascotte Holdings Ltd ($136) | 0.4% | 74.2% | 45.0% | 12.2% | 0.6% |
| Addchance Holdings Ltd ($3344) | 12.2% | 8.6% | 9.3% | 10.9% | |
| Active Group Holdings Ltd ($1096) | 1.3% | 17.4% | 3.5% | 10.7% | |
| |
|---|
| Median (46 companies) | 1.9% | 2.2% | 3.0% | 2.3% | 1.4% |
|---|
| Crocodile Garments ($122) | 12.5% | 20.1% | 22.1% | 1.8% | 13.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prada SpA ($1913) | 24.6% | 32.1% | 37.4% | 34.0% | 21.9% |
| Sitoy Group Holdings Ltd ($1023) | 62.1% | 39.3% | 28.7% | 31.8% | 22.0% |
| HOSA International Ltd ($2200) | 44.2% | 34.6% | 32.0% | 28.2% | |
| Miko International Holdings Ltd ($1247) | 75.1% | 60.9% | 48.8% | 27.3% | |
| Cabbeen Fashion Ltd ($2030) | 25.7% | 32.3% | 32.9% | 26.5% | |
| |
|---|
| Median (46 companies) | 12.7% | 9.0% | 6.7% | 3.4% | 0.4% |
|---|
| Crocodile Garments ($122) | 2.5% | -1.3% | -4.9% | -1.7% | -1.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| High Fashion International Ltd ($608) | 4.9x | 16.7x | 27.7x | 11.2x | |
| Citychamp Watch & Jewellery Group Ltd ($256) | -0.9x | 0.6x | 0.4x | 2.6x | |
| S Culture International Holdings Ltd ($1255) | 0.8x | 1.4x | 0.7x | 2.4x | |
| UKF Holdings Ltd ($1468) | 0.9x | 1.2x | -3.2x | 2.4x | 0.4x |
| Texhong Textile Group Ltd ($2678) | 3.9x | 1.4x | 1.3x | 2.3x | |
| |
|---|
| Median (33 companies) | -0.9x | -0.3x | -0.7x | -0.3x | -1.9x |
|---|
