Royale Furniture Holdings Ltd CAPEX dropped on 54.3% in 2015 and Revenue dropped on 28.1%
31/03/2016 • About Royale Furniture Holdings Ltd (
$1198) • By InTwits
Royale Furniture Holdings Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Royale Furniture Holdings Ltd is a company in decline: 2015 revenue growth was -28.1%, 5 years revenue CAGR was -11.4%
- The company operates at negative EBITDA Margin: -5.6%
- The company has unprofitable business model: ROIC is at -5.8%
- It operates with high leverage: Net Debt/EBITDA is 5.2x while industry average is -1.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Royale Furniture Holdings Ltd ($1198) key annual financial indicators
| mln. HKD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,547 | 1,064 | 994 | 918 | 660 | -28.1% |
| Gross Profit | 487 | 310 | 96 | 165 | 110 | -33.4% |
| SG&A | | 278 | 359 | 325 | 229 | -29.6% |
| EBITDA | 318 | 113 | -216 | -67 | -37 | -45.5% |
| Net Income | 228 | 22 | -456 | -152 | -97 | -35.7% |
Balance Sheet
|
|---|
| Cash | 304 | 408 | 175 | 128 | 90 | -30.0% |
| Short Term Debt | 149 | 338 | 202 | 283 | 251 | -11.5% |
| Long Term Debt | 265 | 244 | 234 | 251 | 238 | -5.2% |
Cash flow
|
|---|
| Capex | 555 | | 140 | 152 | 69 | -54.3% |
Ratios
|
|---|
| Revenue growth | 27.9% | -31.3% | -6.6% | -7.6% | -28.1% | |
| EBITDA growth | 28.9% | -64.5% | -291.2% | -68.9% | -45.5% | |
| Gross Margin | 31.5% | 29.2% | 9.7% | 18.0% | 16.7% | -1.3% |
| EBITDA Margin | 20.6% | 10.6% | -21.7% | -7.3% | -5.6% | 1.8% |
| Net Income Margin | 14.8% | 2.0% | -45.9% | -16.5% | -14.8% | 1.7% |
| SG&A, % of revenue | | 26.1% | 36.1% | 35.4% | 34.6% | -0.7% |
| CAPEX, % of revenue | 35.8% | | 14.1% | 16.5% | 10.5% | -6.0% |
| ROIC | 15.2% | 2.0% | -13.6% | -7.7% | -5.8% | 1.9% |
| ROE | 18.0% | 1.4% | -30.4% | -12.1% | -8.6% | 3.5% |
| Net Debt/EBITDA | 0.3x | 1.5x | | | | 0.0x |
Revenue and profitability
Royale Furniture Holdings Ltd's Revenue dropped on 28.1% in 2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.8 pp from -7.3% to -5.6% in 2015.
Gross Margin decreased slightly on 1.3 pp from 18.0% to 16.7% in 2015. SG&A as a % of Revenue decreased slightly on 0.73 pp from 35.4% to 34.6% in 2015.
Net Income marign increased slightly on 1.7 pp from -16.5% to -14.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 10.5% in 2015. Royale Furniture Holdings Ltd's CAPEX/Revenue surged10.5 pp from in 2012 to 10.5% in 2015. It's average CAPEX/Revenue for the last three years was 13.7%.
Return on investment
The company operates at negative ROIC (-5.85%) and ROE (-8.60%). ROIC increased slightly on 1.9 pp from -7.7% to -5.8% in 2015. ROE increased on 3.5 pp from -12.1% to -8.6% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.2x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2015. Debt decreased on 8.5% in 2015 while cash dropped on 30.0% in 2015.
Appendix 1: Peers in Home Furnishings
Below we provide Royale Furniture Holdings Ltd benchmarking against other companies in Home Furnishings 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 |
|---|
| BEP International Holdings Ltd ($2326) | | 44.7% | -41.5% | 46.2% | 187.9% |
| See Corp Ltd ($491) | | 13.7% | -31.9% | 134.1% | 126.9% |
| Sunrise China Technology Group Ltd ($8226) | | -93.0% | 21.9% | -20.4% | 77.5% |
| Yuxing InfoTech Investment Holdings Ltd ($8005) | | 29.6% | -21.2% | -16.5% | 21.3% |
| Aupu Group Holding Co Ltd ($477) | | 5.7% | 9.0% | 26.4% | 18.5% |
| |
|---|
| Median (25 companies) | -15.9% | 2.3% | 7.8% | 3.0% | 0.1% |
|---|
| Royale Furniture Holdings Ltd ($1198) | | -31.3% | -6.6% | -7.6% | -28.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| South East Group Ltd ($726) | 36.2% | 25.5% | 51.6% | 38.8% | 82.4% |
| Aupu Group Holding Co Ltd ($477) | 47.1% | 48.6% | 45.0% | 47.8% | 48.7% |
| Samson Holding Ltd ($531) | 24.9% | 25.6% | 25.4% | 27.3% | 27.3% |
| Gold Peak Industries Holding Ltd ($40) | 26.8% | 25.8% | 23.6% | 24.9% | 25.6% |
| Hing Lee HK Holdings Ltd ($396) | 23.1% | 16.3% | 18.7% | 22.7% | 22.9% |
| |
|---|
| Median (25 companies) | 16.4% | 17.3% | 18.2% | 15.9% | 15.5% |
|---|
| Royale Furniture Holdings Ltd ($1198) | 31.5% | 29.2% | 9.7% | 18.0% | 16.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aupu Group Holding Co Ltd ($477) | 18.1% | 15.3% | 17.6% | 30.1% | 27.0% |
| Skyworth Digital Holdings Ltd ($751) | 7.0% | 6.0% | 6.1% | 5.7% | 11.3% |
| Welling Holding Ltd ($382) | 8.6% | 11.9% | 12.8% | 10.8% | 8.6% |
| Hing Lee HK Holdings Ltd ($396) | 9.3% | -3.0% | 4.3% | 9.4% | 8.2% |
| Raymond Industrial Ltd ($229) | 4.5% | 7.6% | 7.7% | 7.8% | 6.3% |
| |
|---|
| Median (25 companies) | 5.9% | 4.9% | 4.7% | 4.6% | 4.0% |
|---|
| Royale Furniture Holdings Ltd ($1198) | 20.6% | 10.6% | -21.7% | -7.3% | -5.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| JF Household Furnishings Ltd ($776) | 4.7% | 0.7% | 4.5% | 2.8% | 54.5% |
| Sunrise China Technology Group Ltd ($8226) | 7.9% | 126.4% | 69.3% | 7.4% | 14.1% |
| South East Group Ltd ($726) | 0.0% | 0.0% | 0.0% | 0.0% | 7.9% |
| Aupu Group Holding Co Ltd ($477) | 1.9% | 1.5% | 6.3% | 5.3% | 5.7% |
| Kasen International Holdings Ltd ($496) | 2.6% | 5.0% | 2.6% | 4.7% | 3.9% |
| |
|---|
| Median (25 companies) | 1.8% | 1.5% | 1.9% | 2.7% | 2.2% |
|---|
| Royale Furniture Holdings Ltd ($1198) | 35.8% | | 14.1% | 16.5% | 10.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aupu Group Holding Co Ltd ($477) | 18.0% | 14.8% | 17.0% | 32.2% | 32.2% |
| Mastercraft International Holdings Ltd ($8146) | 76.2% | 54.4% | 38.6% | 36.4% | 23.2% |
| Skyworth Digital Holdings Ltd ($751) | 11.7% | 11.6% | 13.4% | 10.9% | 23.0% |
| BEP International Holdings Ltd ($2326) | 218.9% | 90.3% | 4.7% | -4.5% | 17.6% |
| Tonly Electronics Holdings Ltd ($1249) | 7.0% | 4.2% | 7.1% | 15.9% | 11.7% |
| |
|---|
| Median (25 companies) | 5.0% | 4.2% | 4.7% | 4.0% | 4.1% |
|---|
| Royale Furniture Holdings Ltd ($1198) | 15.2% | 2.0% | -13.6% | -7.7% | -5.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kasen International Holdings Ltd ($496) | 9.6x | 2.2x | 3.7x | 44.9x | 20.1x |
| Hisense Kelon Electrical Holdings Co Ltd ($921) | 3.3x | 1.2x | 0.9x | 1.0x | 6.4x |
| Gold Peak Industries Holding Ltd ($40) | 5.6x | 10.2x | 3.4x | 3.6x | 2.8x |
| TCL Multimedia Technology Holdings Ltd ($1070) | -0.0x | -0.3x | -2.3x | 0.7x | 0.5x |
| Skyworth Digital Holdings Ltd ($751) | 1.1x | 1.2x | 1.5x | 1.2x | -0.2x |
| |
|---|
| Median (17 companies) | 0.0x | -0.3x | -0.9x | -1.3x | -0.9x |
|---|
