Tom Group Ltd Net Debt / EBITDA surged on 8.6x from 8.1x to 16.7x in 2015 and Debt increased on 4.0%
10/03/2016 • About Tom Group Ltd (
$2383) • By InTwits
Tom Group Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tom Group Ltd is a company in decline: 2015 revenue growth was -16.1%, 5 years revenue CAGR was -12.5%
- EBITDA Margin is quite volatile: 9.9% in 2015, 15.8% in 2014, -11.6% in 2013, -3.3% in 2012, -10.8% in 2011
- Tom Group Ltd spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 is 0.0%. Average EBITDA Margin for the same period was -2.0%0
- Tom Group Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.8%. At the same time it's a lot of higher than industry average of 7.5%.
- CAPEX is quite volatile: 546 in 2015, 526 in 2014, 306 in 2013, 174 in 2012, 101 in 2011
- The company has unprofitable business model: ROIC is at -0.6%
- It operates with high leverage: Net Debt/EBITDA is 16.7x while industry average is -1.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tom Group Ltd ($2383) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,326 | 2,206 | 1,928 | 1,511 | 1,268 | -16.1% |
| Gross Profit | 582 | 625 | 585 | 504 | 449 | -10.8% |
| SG&A | 458 | 458 | 444 | 380 | 319 | -16.1% |
| EBITDA | -250 | -73 | -223 | 239 | 126 | -47.5% |
| Net Income | -498 | -337 | -550 | -85 | -214 | 152.7% |
Balance Sheet
|
|---|
| Cash | 962 | 797 | 695 | 536 | 467 | -12.8% |
| Short Term Debt | 191 | 216 | 245 | 154 | 150 | -2.6% |
| Long Term Debt | 1,941 | 2,000 | 2,076 | 2,317 | 2,420 | 4.5% |
Cash flow
|
|---|
| Capex | 232 | 262 | 161 | 142 | 120 | -15.4% |
Ratios
|
|---|
| Revenue growth | -5.6% | -5.2% | -12.6% | -21.6% | -16.1% | |
| EBITDA growth | -350.1% | -71.0% | 207.4% | -207.3% | -47.5% | |
| Gross Margin | 25.0% | 28.4% | 30.3% | 33.4% | 35.5% | 2.1% |
| EBITDA Margin | -10.8% | -3.3% | -11.6% | 15.8% | 9.9% | -5.9% |
| Net Income Margin | -21.4% | -15.3% | -28.5% | -5.6% | -16.9% | -11.3% |
| SG&A, % of revenue | 19.7% | 20.8% | 23.1% | 25.1% | 25.1% | 0.0% |
| CAPEX, % of revenue | 10.0% | 11.9% | 8.4% | 9.4% | 9.5% | 0.1% |
| ROIC | -12.3% | -8.3% | -12.9% | 2.6% | -0.6% | -3.2% |
| ROE | -37.7% | -35.0% | -98.6% | -31.3% | | 31.3% |
| Net Debt/EBITDA | | | | 8.1x | 16.7x | 8.6x |
Revenue and profitability
Tom Group Ltd's Revenue dropped on 16.1% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.9 pp from 15.8% to 9.9% in 2015.
Gross Margin increased on 2.1 pp from 33.4% to 35.5% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign dropped on 11.3 pp from -5.6% to -16.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 9.5% in 2015. The company showed decline in CAPEX/Revenue of 2.4 pp from 11.9% in 2012 to 9.5% in 2015. It's average level of CAPEX/Revenue for the last three years was 9.1%.The company invested a big chunk of EBITDA (95.4%) to CAPEX which didn't stop revenue from falling.
Leverage (Debt)
Company's Net Debt / EBITDA is 16.7x and Debt / EBITDA is 20.4x. Net Debt / EBITDA surged on 8.6x from 8.1x to 16.7x in 2015. Debt increased on 4.0% in 2015 while cash dropped on 12.8% in 2015.
Appendix 1: Peers in Media
Below we provide Tom Group 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) | | -24.2% | -7.7% | 16.4% | -20.3% |
| 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) | | 5.6% | 2.7% | 3.1% | 5.3% |
| |
|---|
| Median (19 companies) | 11.4% | 4.5% | -1.8% | -3.9% | -9.4% |
|---|
| Tom Group Ltd ($2383) | | -5.2% | -12.6% | -21.6% | -16.1% |
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% | 94.4% |
| 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% | 36.2% | 38.6% |
|---|
| Tom Group Ltd ($2383) | 25.0% | 28.4% | 30.3% | 33.4% | 35.5% |
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% | 12.9% | 11.6% | 9.8% | 12.0% |
|---|
| Tom Group Ltd ($2383) | -10.8% | -3.3% | -11.6% | 15.8% | 9.9% |
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% | 7.0% |
| 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% | 13.0% |
| V1 Group Ltd ($82) | 1.4% | 1.9% | 3.2% | 10.1% | |
| |
|---|
| Median (19 companies) | 4.0% | 2.7% | 5.2% | 2.3% | 2.3% |
|---|
| Tom Group Ltd ($2383) | 10.0% | 11.9% | 8.4% | 9.4% | 9.5% |
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% | 5.6% | 5.1% | 2.6% | 5.2% |
|---|
| Tom Group Ltd ($2383) | -12.3% | -8.3% | -12.9% | 2.6% | -0.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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 | 2.0x |
| Modern Media Holdings ($72) | -0.9x | -0.8x | -0.9x | 0.1x | |
| Next Media Ltd ($282) | 0.0x | 0.4x | 0.4x | -0.2x | -0.3x |
| Hong Kong Economic Times Holdings Ltd ($423) | -0.8x | -1.3x | -4.6x | -0.7x | -0.1x |
| |
|---|
| Median (13 companies) | -1.3x | -1.7x | -1.3x | -1.5x | 0.0x |
|---|
| Tom Group Ltd ($2383) | | | | 8.1x | 16.7x |
