Next Media Ltd Net Income dropped on 298% and Revenue dropped on 21.3%
13/06/2016 • About Next Media Ltd (
$282) • By InTwits
Next Media Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Next Media Ltd is a company in decline: FY2016 revenue growth was -21.3%, 5 years revenue CAGR was -7.7%
- EBITDA Margin is declining: 3.5% in FY2016 vs. 12.0% in FY2015 vs. 20.2% in FY2012
- EBITDA Margin is quite volatile: 3.5% in FY2016, 12.0% in FY2015, 13.9% in FY2014, 18.8% in FY2013, 20.2% in FY2012
- Next Media Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's a lot of higher than industry average of 6.2%.
- CAPEX is quite volatile: 40.3 in FY2016, 44.4 in FY2015, 46.9 in FY2014, 42.5 in FY2013, 454 in FY2012
- The company has unprofitable business model: ROIC is at -1.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Next Media Ltd ($282) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,603 | 3,474 | 3,269 | 2,957 | 2,328 | -21.3% |
| Gross Profit | 1,318 | 1,300 | 1,349 | 1,140 | 886 | -22.3% |
| EBITDA | 729 | 655 | 455 | 353 | 82 | -76.7% |
| Net Income | -189 | -968 | 240 | 164 | -325 | -297.6% |
Balance Sheet
|
|---|
| Cash | 726 | 565 | 755 | 500 | 457 | -8.5% |
| Short Term Debt | 289 | 374 | 264 | 78 | 76 | -2.7% |
| Long Term Debt | 725 | 481 | 396 | 307 | 223 | -27.6% |
Cash flow
|
|---|
| Capex | 454 | 42 | 47 | 44 | 40 | -9.3% |
Ratios
|
|---|
| Revenue growth | 3.6% | -3.6% | -5.9% | -9.5% | -21.3% | |
| EBITDA growth | 179.5% | -10.2% | -30.4% | -22.4% | -76.7% | |
| Gross Margin | 36.6% | 37.4% | 41.3% | 38.5% | 38.1% | -0.5% |
| EBITDA Margin | 20.2% | 18.8% | 13.9% | 12.0% | 3.5% | -8.4% |
| Net Income Margin | -5.2% | -27.9% | 7.3% | 5.6% | -13.9% | -19.5% |
| CAPEX, % of revenue | 12.6% | 1.2% | 1.4% | 1.5% | 1.7% | 0.2% |
| ROIC | 8.5% | 6.7% | 8.2% | 6.8% | -1.5% | -8.3% |
| ROE | -5.4% | -34.0% | 9.9% | 6.5% | -14.3% | -20.8% |
| Net Debt/EBITDA | 0.4x | 0.4x | -0.2x | -0.3x | -1.9x | -1.6x |
Revenue and profitability
The company's Revenue dropped on 21.3%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 88.4 pp from -34.6% to 53.8% in FY2016.
Gross Margin showed almost no change in FY2016.
Net Income marign dropped on 19.5 pp from 5.6% to -13.9% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Next Media Ltd had CAPEX/Revenue of 1.7%. The company showed small growth in CAPEX/Revenue of 0.51 pp from 1.2% in FY2013 to 1.7% in FY2016. For the last three years the average CAPEX/Revenue was 1.6%.
Return on investment
The company operates at negative ROIC (-1.52%) and ROE (-14.29%). ROIC decreased on 8.3 pp from 6.8% to -1.5% in FY2016. ROE dropped on 20.8 pp from 6.5% to -14.3% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.9x and Debt / EBITDA is 3.6x. Net Debt / EBITDA dropped on 1.6x from -0.3x to -1.9x in FY2016. Debt dropped on 22.5% while cash decreased on 8.5%.
Appendix 1: Peers in Media
Below we provide Next Media 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CMMB Vision Holdings Ltd ($471) | | 168.1% | 27.8% | 850.0% | |
| 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% | |
| |
|---|
| Median (18 companies) | 4.5% | -1.8% | -3.9% | -8.8% | -3.5% |
|---|
| Next Media Ltd ($282) | | -3.6% | -5.9% | -9.5% | -21.3% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| I-CABLE Communications Ltd ($1097) | 94.8% | 94.7% | 94.1% | 94.4% | |
| Focus Media Network Ltd ($8112) | 68.0% | 67.2% | 50.8% | 57.6% | |
| Television Broadcasts Ltd ($511) | 62.9% | 60.9% | 59.0% | 54.9% | |
| One Media Group Ltd ($426) | 57.3% | 56.7% | 54.5% | 52.7% | |
| Modern Media Holdings ($72) | 57.5% | 55.8% | 55.6% | 50.8% | |
| |
|---|
| Median (15 companies) | 39.0% | 40.5% | 36.1% | 35.7% | 40.4% |
|---|
| Next Media Ltd ($282) | 36.6% | 37.4% | 41.3% | 38.5% | 38.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| SCMP Group Ltd ($583) | 23.5% | 20.5% | 218.1% | 193.5% | |
| Media Chinese International Ltd ($685) | 20.0% | 18.3% | 18.1% | 16.5% | 14.3% |
| One Media Group Ltd ($426) | 18.7% | 23.0% | 22.8% | 15.2% | |
| Phoenix Satellite Television Holdings Ltd ($2008) | 30.1% | 31.1% | 24.6% | 14.1% | |
| Oriental Press Group ($18) | 9.5% | 12.8% | 14.6% | 13.9% | |
| |
|---|
| Median (18 companies) | 9.9% | 11.5% | 9.8% | 8.9% | -97.6% |
|---|
| Next Media Ltd ($282) | 20.2% | 18.8% | 13.9% | 12.0% | 3.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| SCMP Group Ltd ($583) | 7.0% | 5.3% | 52.2% | 85.2% | |
| Evergrande Health Industry Group Ltd ($708) | 14.6% | 2.4% | 2.9% | 13.5% | |
| I-CABLE Communications Ltd ($1097) | 10.1% | 7.6% | 11.3% | 13.0% | |
| Hong Kong Economic Times Holdings Ltd ($423) | 8.4% | 8.5% | 1.3% | 10.0% | |
| Tom Group Ltd ($2383) | 11.9% | 8.4% | 9.4% | 9.5% | |
| |
|---|
| Median (18 companies) | 2.7% | 5.3% | 2.9% | 6.5% | 1.3% |
|---|
| Next Media Ltd ($282) | 12.6% | 1.2% | 1.4% | 1.5% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Media Chinese International Ltd ($685) | 18.6% | 17.8% | 18.4% | 15.6% | 11.1% |
| One Media Group Ltd ($426) | 25.6% | 21.8% | 16.0% | 8.9% | |
| Modern Media Holdings ($72) | 20.6% | 10.4% | 9.3% | 5.5% | |
| Hong Kong Economic Times Holdings Ltd ($423) | 11.5% | -1.5% | 3.2% | 5.2% | |
| Oriental Press Group ($18) | 2.5% | 4.0% | 4.5% | 4.0% | |
| |
|---|
| Median (18 companies) | 3.7% | 4.3% | 2.6% | 0.3% | -6.3% |
|---|
| Next Media Ltd ($282) | 8.5% | 6.7% | 8.2% | 6.8% | -1.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tom Group Ltd ($2383) | | | 8.1x | 16.7x | |
| I-CABLE Communications Ltd ($1097) | -4.0x | -0.8x | 0.2x | 2.0x | |
| One Media Group Ltd ($426) | -2.3x | -0.6x | -1.1x | 1.5x | |
| Modern Media Holdings ($72) | -0.8x | -0.9x | 0.1x | 1.0x | |
| Media Chinese International Ltd ($685) | -1.4x | 0.8x | 0.6x | 0.2x | -0.5x |
| |
|---|
| Median (11 companies) | -1.9x | -1.5x | -1.5x | -0.1x | -0.5x |
|---|
| Next Media Ltd ($282) | 0.4x | 0.4x | -0.2x | -0.3x | -1.9x |
