Linmark Group Ltd reports 71.9% EBITDA decline in 2016 and 3.9% Revenue decline
14/07/2016 • About Linmark Group Ltd (
$915) • By InTwits
Linmark Group Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Linmark Group Ltd doesn't have a profitable business model yet: FY2016 ROIC is 1.5%
- EBITDA Margin is quite volatile: 1.0% in FY2016, 3.3% in FY2015, 5.8% in FY2014, 5.6% in FY2013, 3.4% in FY2012
- Linmark Group Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has potentially 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.
Linmark Group Ltd ($915) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 100.6 | 110.0 | 103.4 | 97.9 | 94.1 | -3.9% |
| Gross Profit | 23.5 | 27.6 | 27.0 | 25.0 | 23.0 | -7.9% |
| SG&A | 22.0 | 23.5 | 23.3 | 23.3 | 22.3 | -4.3% |
| EBITDA | 3.4 | 6.2 | 6.0 | 3.2 | 0.9 | -71.9% |
| Net Income | 2.8 | 5.3 | 4.5 | 1.7 | -0.6 | -133.4% |
Balance Sheet
|
|---|
| Cash | 17.8 | 24.3 | 14.6 | 17.0 | 25.0 | 46.4% |
| 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 | 1.0 | 0.8 | 0.2 | 0.2 | 0.4 | 171.3% |
Ratios
|
|---|
| Revenue growth | 5.1% | 9.4% | -6.0% | -5.3% | -3.9% | |
| EBITDA growth | 36.0% | 81.9% | -3.4% | -45.5% | -71.9% | |
| Gross Margin | 23.4% | 25.1% | 26.1% | 25.5% | 24.5% | -1.1% |
| EBITDA Margin | 3.4% | 5.6% | 5.8% | 3.3% | 1.0% | -2.3% |
| Net Income Margin | 2.8% | 4.8% | 4.3% | 1.7% | -0.6% | -2.3% |
| SG&A, % of revenue | 21.9% | 21.4% | 22.6% | 23.8% | 23.7% | -0.1% |
| CAPEX, % of revenue | 1.0% | 0.7% | 0.2% | 0.2% | 0.4% | 0.3% |
| ROIC | 7.5% | 12.6% | 13.1% | 8.6% | 1.5% | -7.0% |
| ROE | 7.4% | 13.1% | 11.8% | 5.1% | -1.5% | -6.7% |
| Net Debt/EBITDA | -5.3x | -3.9x | -2.5x | -5.3x | -27.4x | -22.1x |
Revenue and profitability
Linmark Group Ltd's Revenue decreased on 3.9%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.3 pp from 3.3% to 0.97% in FY2016.
Gross Margin decreased slightly on 1.1 pp from 25.5% to 24.5% in FY2016. SG&A as a % of Revenue showed almost no change in FY2016.
Net Income marign decreased on 2.3 pp from 1.7% to -0.60% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 0.43%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 0.25%.
Return on investment
The company operates at low but positive ROIC (1.51%) and negative ROE (-1.52%). ROIC decreased on 7.0 pp from 8.6% to 1.5% in FY2016. ROE decreased on 6.7 pp from 5.1% to -1.5% in FY2016.
Leverage (Debt)
The company has no debt. Cash jumped on 46.4%.
Appendix 1: Peers in Commercial Services
Below you can find Linmark Group Ltd benchmarking vs. other companies in Commercial Services 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kai Yuan Holdings Ltd ($1215) | 99.1% | 14.9% | -88.3% | 271.8% | |
| China Seven Star Holdings Ltd ($245) | 6.7% | -81.8% | -39.3% | 195.3% | |
| China Smartpay Group Holdings Ltd ($8325) | | 274.7% | 75.6% | 124.5% | 79.5% |
| Celebrate International Holdings Ltd ($8212) | -90.1% | 1,437.6% | -6.3% | 117.0% | |
| Haier Healthwise Holdings Ltd ($348) | | -50.1% | -7.5% | 101.1% | -9.4% |
| |
|---|
| Median (65 companies) | 6.7% | 8.6% | 9.9% | 4.7% | 10.9% |
|---|
| Linmark Group Ltd ($915) | | 9.4% | -6.0% | -5.3% | -3.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| HC International Inc ($2280) | 87.5% | 91.9% | 92.5% | 89.6% | |
| Winto Group Holdings Ltd ($8238) | 90.2% | 93.4% | 92.0% | 88.4% | |
| Dingyi Group Investment Ltd ($508) | 75.8% | | 64.5% | 86.0% | 89.6% |
| Fu Shou Yuan International Group Ltd ($1448) | 80.5% | 80.4% | 80.0% | 77.6% | |
| Nirvana Asia Ltd ($1438) | 68.3% | 69.6% | 70.5% | 75.7% | |
| |
|---|
| Median (60 companies) | 32.2% | 31.1% | 31.8% | 31.9% | 34.7% |
|---|
| Linmark Group Ltd ($915) | 23.4% | 25.1% | 26.1% | 25.5% | 24.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Zuoli Kechuang Micro-Finance Co Ltd ($6866) | 61.6% | 84.9% | 75.9% | 80.9% | |
| Shenzhen International Holdings Ltd ($152) | 60.2% | 65.8% | 97.1% | 73.6% | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 78.3% | 74.5% | 74.0% | 71.6% | |
| CAR Inc ($699) | 43.6% | 30.1% | 43.1% | 67.4% | |
| Jiangsu Expressway Co Ltd ($177) | 57.0% | 60.7% | 59.3% | 61.5% | |
| |
|---|
| Median (65 companies) | 17.6% | 16.0% | 12.9% | 10.1% | 2.0% |
|---|
| Linmark Group Ltd ($915) | 3.4% | 5.6% | 5.8% | 3.3% | 1.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Blue Sky Power Holdings Ltd ($6828) | 21.3% | 9.0% | 13.9% | 47.4% | |
| COSCO Pacific Ltd ($1199) | 96.6% | 66.6% | 43.3% | 45.8% | |
| Shenzhen International Holdings Ltd ($152) | 23.0% | 22.1% | 20.9% | 35.0% | |
| Celebrate International Holdings Ltd ($8212) | 211.7% | 12.0% | 6.2% | 34.2% | |
| China Maple Leaf Educational Systems Ltd ($1317) | 25.7% | 50.9% | 21.1% | 32.8% | |
| |
|---|
| Median (65 companies) | 3.1% | 4.0% | 3.2% | 3.9% | 1.7% |
|---|
| Linmark Group Ltd ($915) | 1.0% | 0.7% | 0.2% | 0.2% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wonderful Sky Financial Group Holdings Ltd ($1260) | 51.5% | 26.6% | 30.0% | 29.5% | 19.8% |
| 1010 Printing Group Ltd ($1127) | 13.5% | 20.8% | 17.8% | 19.9% | |
| China Packaging Holdings Development Ltd ($1439) | 52.0% | 46.6% | 34.1% | 19.8% | |
| iOne Holdings Ltd ($982) | 12.5% | 11.1% | 9.4% | 19.2% | |
| CAR Inc ($699) | 5.2% | 2.7% | 12.2% | 19.0% | |
| |
|---|
| Median (65 companies) | 6.3% | 5.8% | 5.8% | 3.2% | 2.0% |
|---|
| Linmark Group Ltd ($915) | 7.5% | 12.6% | 13.1% | 8.6% | 1.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Celebrate International Holdings Ltd ($8212) | | | | 22.2x | |
| Kai Yuan Holdings Ltd ($1215) | -143.8x | -0.7x | | 18.8x | |
| Eagle Legend Asia Ltd ($936) | 4.0x | 4.0x | 3.3x | 6.2x | |
| Sichuan Expressway Co Ltd ($107) | 2.7x | 3.8x | 4.3x | 5.5x | |
| Yuexiu Transport Infrastructure Ltd ($1052) | 4.5x | 3.1x | 2.7x | 5.3x | |
| |
|---|
| Median (42 companies) | 0.0x | -0.7x | -0.5x | -0.5x | -1.8x |
|---|
| Linmark Group Ltd ($915) | -5.3x | -3.9x | -2.5x | -5.3x | -27.4x |
