Embry Holdings Ltd reports 42.7% CAPEX decline while 6.4% Revenue growth
23/03/2016 • About Embry Holdings Ltd (
$1388) • By InTwits
Embry Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Embry Holdings Ltd is a growth stock: 2015 revenue growth was 6.4%, 5 year revenue CAGR was 13.4% at 2015 ROIC 15.5%
- EBITDA Margin is relatively stable: 14.5% in 2015 vs. 12.7% in 2014 vs. 13.6% in 2011
- Embry Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.8%. At the same time it's a lot of higher than industry average of 5.6%.
- CAPEX is quite volatile: 174 in 2015, 303 in 2014, 199 in 2013, 30.3 in 2012, 156 in 2011
- The company has highly profitable business model: ROIC is at 15.5%
- It operates with high leverage: Net Debt/EBITDA is 0.2x while industry average is -0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Embry Holdings Ltd ($1388) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,695 | 1,995 | 2,235 | 2,383 | 2,536 | 6.4% |
| Gross Profit | 1,394 | 1,620 | 1,797 | 1,960 | 2,070 | 5.6% |
| SG&A | 1,212 | 1,404 | 1,589 | 1,720 | 1,802 | 4.8% |
| EBITDA | 230 | 277 | 280 | 302 | 368 | 21.7% |
| Net Income | 160 | 184 | 198 | 188 | 202 | 7.2% |
Balance Sheet
|
|---|
| Cash | 180 | 383 | 346 | 180 | 233 | 29.4% |
| Short Term Debt | 48 | 57 | 57 | 91 | 125 | 37.8% |
| Long Term Debt | 164 | 122 | 65 | 94 | 183 | 94.3% |
Cash flow
|
|---|
| Capex | 156 | 30 | 199 | 303 | 174 | -42.7% |
Ratios
|
|---|
| Revenue growth | 25.6% | 17.7% | 12.0% | 6.6% | 6.4% | |
| EBITDA growth | 40.7% | 20.6% | 1.1% | 7.7% | 21.7% | |
| Gross Margin | 82.3% | 81.2% | 80.4% | 82.3% | 81.6% | -0.6% |
| EBITDA Margin | 13.6% | 13.9% | 12.5% | 12.7% | 14.5% | 1.8% |
| Net Income Margin | 9.5% | 9.2% | 8.9% | 7.9% | 7.9% | 0.1% |
| SG&A, % of revenue | 71.5% | 70.3% | 71.1% | 72.2% | 71.1% | -1.1% |
| CAPEX, % of revenue | 9.2% | 1.5% | 8.9% | 12.7% | 6.8% | -5.9% |
| ROIC | 14.3% | 15.1% | 14.4% | 14.1% | 15.5% | 1.3% |
| ROE | 13.5% | 13.5% | 12.9% | 11.2% | 11.4% | 0.2% |
| Net Debt/EBITDA | 0.1x | -0.7x | -0.8x | 0.0x | 0.2x | 0.2x |
Revenue and profitability
The company's Revenue increased on 6.4% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.67 pp from -2.4% to -1.7% in 2015.
Gross Margin decreased slightly on 0.64 pp from 82.3% to 81.6% in 2015. SG&A as a % of Revenue decreased slightly on 1.1 pp from 72.2% to 71.1% in 2015.
Net Income marign showed almost no change in 2015.
Capital expenditures (CAPEX) and working capital investments
Embry Holdings Ltd's CAPEX/Revenue was 6.8% in 2015. CAPEX/Revenue increased on 5.3 pp from 1.5% in 2012 to 6.8% in 2015. It's average level of CAPEX/Revenue for the last three years was 9.5%.
Return on investment
The company operates at good ROIC (15.46%) while ROE is low (11.40%). ROIC increased slightly on 1.3 pp from 14.1% to 15.5% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is 0.2x Net Debt / EBITDA and 0.8x Debt / EBITDA. Net Debt / EBITDA surged on 0.2x from 0.016x to 0.2x in 2015. Debt jumped on 66.6% in 2015 while cash jumped on 29.4% in 2015.
Appendix 1: Peers in Retail
Below you can find Embry Holdings 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) | | 3.3% | -14.9% | 54.3% | -70.8% |
| 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) | | 23.1% | 15.9% | 36.0% | -21.0% |
| |
|---|
| Median (112 companies) | 29.5% | 10.4% | 6.0% | 3.1% | -0.9% |
|---|
| Embry Holdings Ltd ($1388) | | 17.7% | 12.0% | 6.6% | 6.4% |
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% | 99.1% |
| Nanjing Sinolife United Co Ltd ($3332) | 80.6% | 86.5% | 89.3% | 90.9% | |
| Ports Design Ltd ($589) | 82.1% | 81.9% | 81.2% | 80.8% | |
| |
|---|
| Median (101 companies) | 38.8% | 36.7% | 36.4% | 35.3% | 41.8% |
|---|
| Embry Holdings Ltd ($1388) | 82.3% | 81.2% | 80.4% | 82.3% | 81.6% |
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% | 39.6% |
| China Dongxiang Group Co Ltd ($3818) | 5.6% | 6.0% | 5.6% | 58.3% | 41.4% |
| 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% | 43.4% |
| Golden Eagle Retail Group Ltd ($3308) | 52.1% | 48.5% | 47.3% | 42.8% | |
| |
|---|
| Median (111 companies) | 13.0% | 9.6% | 7.2% | 8.8% | 7.4% |
|---|
| Embry Holdings Ltd ($1388) | 13.6% | 13.9% | 12.5% | 12.7% | 14.5% |
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% | 17.6% |
| Future Bright Holdings Ltd ($703) | 6.2% | 2.6% | 3.7% | 36.8% | 24.9% |
| Sage International Group Ltd ($8082) | 20.4% | 236.6% | 28.2% | 35.4% | 9.3% |
| Maoye International Holdings Ltd ($848) | 30.9% | 32.8% | 24.1% | 31.5% | 17.7% |
| Tsui Wah Holdings Ltd ($1314) | 5.2% | 8.3% | 9.3% | 30.5% | 10.6% |
| |
|---|
| Median (112 companies) | 3.8% | 4.0% | 3.6% | 3.4% | 2.7% |
|---|
| Embry Holdings Ltd ($1388) | 9.2% | 1.5% | 8.9% | 12.7% | 6.8% |
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% | 51.4% |
| 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% | 20.8% |
| Nanjing Sinolife United Co Ltd ($3332) | 57.4% | 67.3% | 68.1% | 32.2% | |
| |
|---|
| Median (112 companies) | 17.2% | 12.2% | 8.2% | 8.4% | 5.8% |
|---|
| Embry Holdings Ltd ($1388) | 14.3% | 15.1% | 14.4% | 14.1% | 15.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sparkle Roll Group Ltd ($970) | -0.8x | 0.6x | 4.0x | 9.3x | 23.5x |
| China Yongda Automobiles Services Holdings Ltd ($3669) | 3.3x | 3.4x | 4.7x | 5.5x | 3.4x |
| 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 | 2.6x |
| Century Ginwa Retail Holdings Ltd ($162) | 6.5x | 2.0x | 2.5x | 4.8x | 7.3x |
| |
|---|
| Median (87 companies) | -0.8x | -0.5x | -0.8x | -0.2x | -0.5x |
|---|
| Embry Holdings Ltd ($1388) | 0.1x | -0.7x | -0.8x | 0.0x | 0.2x |
