Television Broadcasts Ltd reports 72.1% EBITDA decline and 9.3% Revenue decline
23/03/2016 • About Television Broadcasts Ltd (
$511) • By InTwits
Television Broadcasts Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 11.5% in 2015 vs. 37.3% in 2014 vs. 45.2% in 2011
- EBITDA Margin is quite volatile: 11.5% in 2015, 37.3% in 2014, 42.3% in 2013, 43.2% in 2012, 45.2% in 2011
- Television Broadcasts Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.2%. At the same time it's in pair with industry average of 8.5%.
- CAPEX is quite volatile: 305 in 2015, 394 in 2014, 616 in 2013, 688 in 2012, 143 in 2011
- The company has potentially unprofitable business model: ROIC is at 2.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Television Broadcasts Ltd ($511) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 5,209 | 5,448 | 5,686 | 4,912 | 4,455 | -9.3% |
| Gross Profit | 3,402 | 3,424 | 3,465 | 2,896 | 2,446 | -15.6% |
| SG&A | 1,161 | 1,255 | 1,361 | 1,319 | 1,430 | 8.4% |
| EBITDA | 2,356 | 2,351 | 2,404 | 1,831 | 511 | -72.1% |
| Net Income | 1,556 | 1,732 | 1,738 | 1,410 | 1,331 | -5.6% |
Balance Sheet
|
|---|
| Cash | 3,296 | 3,169 | 2,609 | 3,196 | 2,126 | -33.5% |
| Short Term Debt | 24 | 25 | 252 | 98 | 0 | -100.0% |
| Long Term Debt | 197 | 180 | 0 | 294 | 235 | -20.0% |
Cash flow
|
|---|
| Capex | 143 | 688 | 616 | 394 | 305 | -22.5% |
Ratios
|
|---|
| Revenue growth | 11.4% | 4.6% | 4.4% | -13.6% | -9.3% | |
| EBITDA growth | 11.7% | -0.2% | 2.3% | -23.8% | -72.1% | |
| Gross Margin | 65.3% | 62.9% | 60.9% | 59.0% | 54.9% | -4.1% |
| EBITDA Margin | 45.2% | 43.2% | 42.3% | 37.3% | 11.5% | -25.8% |
| Net Income Margin | 29.9% | 31.8% | 30.6% | 28.7% | 29.9% | 1.2% |
| SG&A, % of revenue | 22.3% | 23.0% | 23.9% | 26.9% | 32.1% | 5.3% |
| CAPEX, % of revenue | 2.8% | 12.6% | 10.8% | 8.0% | 6.9% | -1.2% |
| ROIC | 26.5% | 23.8% | 22.4% | 15.1% | 2.2% | -12.9% |
| ROE | 23.0% | 23.4% | 21.6% | 16.7% | 16.4% | -0.3% |
| Net Debt/EBITDA | -1.3x | -1.3x | -1.0x | -1.5x | -3.7x | -2.2x |
Revenue and profitability
The company's Revenue decreased on 9.3% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 25.8 pp from 37.3% to 11.5% in 2015.
Gross Margin decreased on 4.1 pp from 59.0% to 54.9% in 2015. SG&A as a % of Revenue increased on 5.3 pp from 26.9% to 32.1% in 2015.
Net Income marign increased slightly on 1.2 pp from 28.7% to 29.9% in 2015.
Capital expenditures (CAPEX) and working capital investments
Television Broadcasts Ltd's CAPEX/Revenue was 6.9% in 2015. The company's CAPEX/Revenue decreased on 5.8 pp from 12.6% in 2012 to 6.9% in 2015. For the last three years the average CAPEX/Revenue was 8.6%.The company invested a big chunk of EBITDA (59.8%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at good ROE (16.43%) while ROIC is low (2.18%). ROIC dropped on 12.9 pp from 15.1% to 2.2% in 2015. ROE showed almost no change in 2015.
Leverage (Debt)
Debt level is -3.7x Net Debt / EBITDA and 0.5x Debt / EBITDA. Net Debt / EBITDA dropped on 2.2x from -1.5x to -3.7x in 2015. Debt dropped on 40.0% in 2015 while cash dropped on 33.5% in 2015.
Management team
The company's CEO Lee Po On "Mark" has spent 3 years at the company. Mak Yau Kee "Adrian" is a Television Broadcasts Ltd's CFO. Mak Yau Kee "Adrian" has spent 14 years at the company.
Appendix 1: Peers in Media
Below you can find Television Broadcasts Ltd benchmarking vs. other companies in Media 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 |
|---|
| SCMP Group Ltd ($583) | | 7.8% | 12.5% | -95.9% | 12.5% |
| Hong Kong Economic Times Holdings Ltd ($423) | | 5.6% | 2.7% | 3.1% | 5.3% |
| Modern Media Holdings ($72) | | 11.8% | -3.7% | -4.3% | -1.3% |
| Focus Media Network Ltd ($8112) | | -10.6% | 34.6% | 5.6% | -5.2% |
| Sing Tao News Corp Ltd ($1105) | | -7.5% | -7.9% | -2.4% | -6.2% |
| |
|---|
| Median (15 companies) | 3.8% | 4.0% | -1.9% | -3.9% | -8.7% |
|---|
| Television Broadcasts Ltd ($511) | | 4.6% | 4.4% | -13.6% | -9.3% |
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% |
| Modern Media Holdings ($72) | 57.1% | 57.5% | 55.8% | 55.6% | 50.8% |
| 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% | 57.6% |
| Next Media Ltd ($282) | 33.1% | 36.6% | 37.4% | 41.3% | 38.5% |
| |
|---|
| Median (16 companies) | 43.6% | 37.5% | 38.5% | 36.1% | 37.9% |
|---|
| Television Broadcasts Ltd ($511) | 65.3% | 62.9% | 60.9% | 59.0% | 54.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 26.9% | 23.5% | 20.5% | 218.1% | 193.5% |
| Media Chinese International Ltd ($685) | 20.0% | 20.0% | 18.3% | 18.1% | 16.5% |
| One Media Group Ltd ($426) | 14.4% | 18.7% | 23.0% | 22.8% | 15.2% |
| Phoenix Satellite Television Holdings Ltd ($2008) | 29.8% | 30.1% | 31.1% | 24.6% | 14.1% |
| Oriental Press Group ($18) | 20.6% | 9.5% | 12.8% | 14.6% | 13.9% |
| |
|---|
| Median (15 companies) | 13.3% | 9.9% | 11.5% | 9.8% | 9.9% |
|---|
| Television Broadcasts Ltd ($511) | 45.2% | 43.2% | 42.3% | 37.3% | 11.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| SCMP Group Ltd ($583) | 3.6% | 7.0% | 5.3% | 52.2% | 85.2% |
| Evergrande Health Industry Group Ltd ($708) | 58.0% | 14.6% | 2.4% | 2.9% | 13.5% |
| I-CABLE Communications Ltd ($1097) | 10.6% | 10.1% | 7.6% | 11.3% | 13.0% |
| Hong Kong Economic Times Holdings Ltd ($423) | 9.0% | 8.4% | 8.5% | 1.3% | 10.0% |
| Tom Group Ltd ($2383) | 10.0% | 11.9% | 8.4% | 9.4% | 9.5% |
| |
|---|
| Median (15 companies) | 4.6% | 2.7% | 5.2% | 2.3% | 3.9% |
|---|
| Television Broadcasts Ltd ($511) | 2.8% | 12.6% | 10.8% | 8.0% | 6.9% |
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% |
| Next Media Ltd ($282) | 1.7% | 8.5% | 6.7% | 8.2% | 6.8% |
| Modern Media Holdings ($72) | 23.8% | 20.6% | 10.4% | 9.3% | 5.5% |
| Hong Kong Economic Times Holdings Ltd ($423) | 23.3% | 11.5% | -1.5% | 3.2% | 5.2% |
| |
|---|
| Median (15 companies) | 7.9% | 3.7% | 4.3% | 2.6% | 3.2% |
|---|
| Television Broadcasts Ltd ($511) | 26.5% | 23.8% | 22.4% | 15.1% | 2.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tom Group Ltd ($2383) | | | | 8.1x | 16.7x |
| I-CABLE Communications Ltd ($1097) | -2.0x | -4.0x | -0.8x | 0.2x | 2.0x |
| One Media Group Ltd ($426) | -3.8x | -2.3x | -0.6x | -1.1x | 1.5x |
| Modern Media Holdings ($72) | -0.9x | -0.8x | -0.9x | 0.1x | 1.0x |
| Media Chinese International Ltd ($685) | -1.1x | -1.4x | 0.8x | 0.6x | 0.2x |
| |
|---|
| Median (11 companies) | -1.6x | -1.9x | -1.5x | -1.1x | -0.1x |
|---|
| Television Broadcasts Ltd ($511) | -1.3x | -1.3x | -1.0x | -1.5x | -3.7x |
