Magnum Entertainment Group Holdings Ltd reports 260% EBITDA decline in 2016 and 16.7% Revenue decline
24/06/2016 • About Magnum Entertainment Group Holdings Ltd (
$2080) • By InTwits
Magnum Entertainment Group Holdings Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Magnum Entertainment Group Holdings Ltd doesn't have a profitable business model yet: FY2016 ROIC is -17.6%
- EBITDA Margin is quite volatile: -11.0% in FY2016, 5.7% in FY2015, 4.8% in FY2014, 22.5% in FY2013, 28.4% in FY2012
- Magnum Entertainment Group Holdings Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.8%. At the same time it's a lot of higher than industry average of 58.1%.
- CAPEX is quite volatile: 5.5 in FY2016, 35.9 in FY2015, 1.7 in FY2014, 6.1 in FY2013, 16.7 in FY2012
- The company has unprofitable business model: ROIC is at -17.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Magnum Entertainment Group Holdings Ltd ($2080) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 137.1 | 174.0 | 159.1 | 154.9 | 129.0 | -16.7% |
| SG&A | | | | 7.0 | 6.8 | -3.5% |
| EBITDA | 38.9 | 39.2 | 7.7 | 8.9 | -14.1 | -259.6% |
| Net Income | 29.2 | 28.0 | -0.6 | -0.1 | -26.0 | |
Balance Sheet
|
|---|
| Cash | 12.0 | 22.2 | 136.4 | 98.2 | 89.6 | -8.7% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 16.7 | 6.1 | 1.7 | 35.9 | 5.5 | -84.6% |
Ratios
|
|---|
| Revenue growth | 96.0% | 26.9% | -8.5% | -2.7% | -16.7% | |
| EBITDA growth | 97.8% | 0.8% | -80.3% | 14.9% | -259.6% | |
| EBITDA Margin | 28.4% | 22.5% | 4.8% | 5.7% | -11.0% | -16.7% |
| Net Income Margin | 21.3% | 16.1% | -0.4% | -0.1% | -20.1% | -20.1% |
| SG&A, % of revenue | | | | 4.5% | 5.3% | 0.7% |
| CAPEX, % of revenue | 12.1% | 3.5% | 1.1% | 23.2% | 4.3% | -18.9% |
| ROIC | 148.9% | 82.2% | 2.5% | 1.0% | -17.6% | -18.6% |
| ROE | 148.2% | 74.2% | -0.5% | -0.1% | -16.9% | -16.8% |
| Net Debt/EBITDA | -0.3x | -0.6x | -17.7x | -11.1x | | 11.1x |
Revenue and profitability
Magnum Entertainment Group Holdings Ltd's Revenue dropped on 16.7%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 16.7 pp from 5.7% to -11.0% in FY2016.
SG&A as a % of Revenue increased slightly on 0.72 pp from 4.5% to 5.3% in FY2016.
Net Income marign dropped on 20.1 pp from -0.067% to -20.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.3% in FY2016. Magnum Entertainment Group Holdings Ltd showed small growth in CAPEX/Revenue of 0.80 pp from 3.5% in FY2013 to 4.3% in FY2016. Average CAPEX/Revenue for the last three years was 9.5%.
Return on investment
The company operates at negative ROIC (-17.57%) and ROE (-16.87%). ROIC dropped on 18.6 pp from 1.00% to -17.6% in FY2016. ROE dropped on 16.8 pp from -0.063% to -16.9% in FY2016.
Leverage (Debt)
The company has no debt. Cash decreased on 8.7%.
Appendix 1: Peers in Entertainment
Below we provide Magnum Entertainment Group Holdings Ltd benchmarking against other companies in Entertainment 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 |
|---|
| Neo Telemedia Ltd ($8167) | 268.8% | -60.2% | -13.4% | 5,442.4% | |
| National Arts Entertainment and Culture Group Ltd ($8228) | -57.9% | 181.2% | -20.1% | 162.4% | |
| Alibaba Pictures Group Ltd ($1060) | 169.4% | -45.8% | -63.8% | 108.3% | |
| SMI Holdings Group Ltd ($198) | 16.4% | 65.4% | 16.4% | 77.2% | |
| Universe International Holdings Ltd ($1046) | -42.2% | 4.3% | 159.4% | 46.3% | |
| |
|---|
| Median (26 companies) | 2.9% | 11.0% | 1.2% | -5.8% | -1.0% |
|---|
| Magnum Entertainment Group Holdings Ltd ($2080) | | 26.9% | -8.5% | -2.7% | -16.7% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Amax International Holdings Ltd ($959) | | 92.1% | 98.6% | 96.6% | |
| China Vanguard Group Ltd ($8156) | 63.8% | 88.2% | 93.8% | 95.2% | |
| Universe International Holdings Ltd ($1046) | 22.1% | 36.7% | 11.4% | 84.8% | |
| Cheung Wo International Holdings Ltd ($9) | -17.5% | 71.4% | 77.7% | 77.8% | |
| REXLot Holdings Ltd ($555) | 70.2% | 73.1% | 73.4% | 67.4% | |
| |
|---|
| Median (23 companies) | 44.8% | 52.7% | 44.0% | 44.3% | 57.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Neptune Group Ltd ($70) | 98.6% | 98.6% | 86.6% | 99.0% | |
| Universe International Holdings Ltd ($1046) | 36.6% | 44.6% | 74.6% | 73.6% | |
| Haichang Holdings Ltd ($2255) | 55.0% | 44.5% | 46.3% | 56.6% | |
| REXLot Holdings Ltd ($555) | 53.7% | 55.1% | 6.1% | 40.5% | |
| SMI Holdings Group Ltd ($198) | 19.2% | 35.4% | 34.5% | 31.2% | |
| |
|---|
| Median (26 companies) | 19.7% | 17.2% | 18.3% | -3.5% | 5.0% |
|---|
| Magnum Entertainment Group Holdings Ltd ($2080) | 28.4% | 22.5% | 4.8% | 5.7% | -11.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Star Cultural Media Group Ltd ($8172) | 8.9% | 0.0% | 0.0% | 848.3% | |
| National Arts Entertainment and Culture Group Ltd ($8228) | 1,237.1% | 771.1% | 799.0% | 508.9% | |
| Cheung Wo International Holdings Ltd ($9) | 90.3% | 465.2% | 383.2% | 202.4% | |
| Haichang Holdings Ltd ($2255) | 21.4% | 18.5% | 10.3% | 64.2% | |
| Amax International Holdings Ltd ($959) | 10.4% | 2.7% | 17.2% | 59.8% | |
| |
|---|
| Median (26 companies) | 8.7% | 9.0% | 5.0% | 8.3% | 4.2% |
|---|
| Magnum Entertainment Group Holdings Ltd ($2080) | 12.1% | 3.5% | 1.1% | 23.2% | 4.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Universe International Holdings Ltd ($1046) | -6.2% | -0.8% | -3.7% | 43.8% | |
| Neptune Group Ltd ($70) | 22.8% | 23.8% | 21.1% | 18.1% | |
| SMI Holdings Group Ltd ($198) | 1.3% | 8.4% | 9.9% | 10.5% | |
| Dynam Japan Holdings Co Ltd ($6889) | 23.8% | 25.4% | 21.8% | 10.5% | 12.6% |
| Haichang Holdings Ltd ($2255) | 7.1% | 8.1% | 8.6% | 8.9% | |
| |
|---|
| Median (27 companies) | -1.1% | 1.3% | -0.9% | -3.3% | -0.5% |
|---|
| Magnum Entertainment Group Holdings Ltd ($2080) | 148.9% | 82.2% | 2.5% | 1.0% | -17.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Orange Sky Golden Harvest Entertainment Holdings Ltd ($1132) | 1.1x | 4.2x | 2.7x | 25.8x | |
| Nan Hai Corp Ltd ($680) | 80.8x | 3.5x | 20.8x | 12.6x | |
| Haichang Holdings Ltd ($2255) | 7.0x | 4.7x | 1.7x | 1.7x | |
| SMI Holdings Group Ltd ($198) | 2.0x | 1.6x | 2.1x | 1.6x | |
| REXLot Holdings Ltd ($555) | -0.0x | -0.2x | 7.2x | 1.6x | |
| |
|---|
| Median (12 companies) | -0.1x | -0.5x | -0.0x | -0.3x | -0.2x |
|---|
| Magnum Entertainment Group Holdings Ltd ($2080) | -0.3x | -0.6x | -17.7x | -11.1x | |
