Trinity Ltd reports 1,344% EBITDA decline in 2016 and 20.3 pp EBITDA Margin decline from 1.4% to -18.9%
16/03/2017 • About Trinity Ltd (
$891) • By InTwits
Trinity Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Trinity Ltd is a company in decline: FY2016 revenue growth was -7.2%, 5 years revenue CAGR was -7.4%
- EBITDA Margin is declining: -18.9% in FY2016 vs. 1.4% in FY2015 vs. 26.7% in FY2012
- EBITDA Margin is quite volatile: -18.9% in FY2016, 1.4% in FY2015, 14.0% in FY2014, 18.2% in FY2013, 26.7% in FY2012
- The company has unprofitable business model: ROIC is at -10.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Trinity Ltd ($891) key annual financial indicators
| mln. HKD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,801 | 2,696 | 2,624 | 1,914 | 1,777 | -7.2% |
| Gross Profit | 2,186 | 2,036 | 1,943 | 1,385 | 1,213 | -12.4% |
| SG&A | 1,547 | 1,626 | 1,675 | 1,540 | 1,636 | 6.2% |
| EBITDA | 748 | 491 | 368 | 27 | -336 | -1,343.6% |
| Net Income | 540 | 308 | 161 | -89 | -441 | |
Balance Sheet
|
|---|
| Cash | 999 | 1,337 | 523 | 235 | 581 | 146.8% |
| Short Term Debt | 870 | 1,428 | 748 | 566 | 739 | 30.4% |
| Long Term Debt | 0 | 0 | 0 | 160 | 566 | 253.5% |
Cash flow
|
|---|
| Capex | 112 | 96 | 133 | 60 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 7.4% | -3.7% | -2.7% | -27.0% | -7.2% | |
| EBITDA growth | 0.7% | -34.4% | -25.1% | -92.6% | -1,343.6% | |
| Gross Margin | 78.1% | 75.5% | 74.1% | 72.4% | 68.3% | -4.1% |
| EBITDA Margin | 26.7% | 18.2% | 14.0% | 1.4% | -18.9% | -20.3% |
| Net Income Margin | 19.3% | 11.4% | 6.1% | -4.6% | -24.8% | -20.2% |
| SG&A, % of revenue | 55.3% | 60.3% | 63.8% | 80.5% | 92.1% | 11.6% |
| CAPEX, % of revenue | 4.0% | 3.6% | 5.1% | 3.1% | | -3.1% |
| ROIC | 13.4% | 6.5% | 4.3% | -2.4% | -10.5% | -8.1% |
| ROE | 16.1% | 8.9% | 4.7% | -2.7% | -15.0% | -12.3% |
| Net Debt/EBITDA | -0.2x | 0.2x | 0.6x | 18.2x | | -18.2x |
Revenue and profitability
Trinity Ltd's Revenue decreased on 7.2%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 20.3 pp from 1.4% to -18.9% in FY2016.
Gross Margin decreased on 4.1 pp from 72.4% to 68.3% in FY2016. SG&A as a % of Revenue surged on 11.6 pp from 80.5% to 92.1% in FY2016.
Net Income marign dropped on 20.2 pp from -4.6% to -24.8% in FY2016.
Return on investment
The company operates at negative ROIC (-10.47%) and ROE (-14.99%). ROIC decreased on 8.1 pp from -2.4% to -10.5% in FY2016. ROE dropped on 12.3 pp from -2.7% to -15.0% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.0x and Debt / EBITDA is . Net Debt / EBITDA dropped on 18.2x from 18.2x to in FY2016. Debt surged on 79.6% while cash jumped on 147%.
Appendix 1: Peers in Retail
Below we provide Trinity Ltd benchmarking against other companies in Retail 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 |
|---|
| China Nuclear Industry 23 International Corp Ltd ($611) | | 85.6% | -42.1% | 419.8% | 21.8% |
| Noble House China Holdings Ltd ($8246) | | -20.2% | -24.8% | 117.2% | 129.1% |
| Vongroup Ltd ($318) | | 23.7% | -80.2% | 90.3% | -7.2% |
| Nanjing Sinolife United Co Ltd ($3332) | 45.6% | 29.5% | 29.6% | 57.3% | |
| Shanghai La Chapelle Fashion Co Ltd ($6116) | | 72.8% | 23.0% | 48.3% | 12.5% |
| |
|---|
| Median (117 companies) | 9.7% | 6.5% | 3.1% | -1.0% | -5.8% |
|---|
| Trinity Ltd ($891) | | -3.7% | -2.7% | -27.0% | -7.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vongroup Ltd ($318) | | | 95.1% | 99.1% | 99.0% |
| Modern Beauty Salon Holdings Ltd ($919) | 97.4% | 95.9% | 96.8% | 96.7% | 96.8% |
| Moiselle International Holdings Ltd ($130) | 81.2% | 83.8% | 80.6% | 83.2% | 77.6% |
| Embry Holdings Ltd ($1388) | 81.2% | 80.4% | 82.3% | 81.6% | |
| Nanjing Sinolife United Co Ltd ($3332) | 86.5% | 89.3% | 90.9% | 80.6% | |
| |
|---|
| Median (103 companies) | 36.2% | 35.8% | 35.0% | 33.3% | 45.1% |
|---|
| Trinity Ltd ($891) | 78.1% | 75.5% | 74.1% | 72.4% | 68.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| China Energy Development Holdings Ltd ($228) | -58.1% | -72.3% | -84.0% | 1,070.6% | |
| Golden Eagle Retail Group Ltd ($3308) | 48.5% | 47.3% | 42.8% | 55.4% | |
| Nanjing Sinolife United Co Ltd ($3332) | 51.6% | 56.9% | 54.4% | 44.8% | |
| Lifestyle International Holdings Ltd ($1212) | 47.5% | 47.0% | 44.7% | 43.4% | 46.3% |
| China Dongxiang Group Co Ltd ($3818) | 6.0% | 5.6% | 58.3% | 41.4% | |
| |
|---|
| Median (117 companies) | 10.3% | 7.3% | 8.9% | 7.4% | 6.8% |
|---|
| Trinity Ltd ($891) | 26.7% | 18.2% | 14.0% | 1.4% | -18.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Culture Landmark Investment Ltd ($674) | 11.6% | 19.4% | 15.7% | 47.2% | 3.9% |
| Springland International Holdings Ltd ($1700) | 31.9% | 17.4% | 26.5% | 36.9% | |
| Merry Garden Holdings Ltd ($1237) | 18.6% | 28.6% | 15.1% | 34.2% | |
| China Energy Development Holdings Ltd ($228) | 1.6% | 0.2% | 0.0% | 27.4% | |
| Golden Eagle Retail Group Ltd ($3308) | 28.5% | 9.4% | 26.7% | 25.4% | |
| |
|---|
| Median (117 companies) | 4.1% | 3.6% | 3.7% | 3.5% | 2.1% |
|---|
| Trinity Ltd ($891) | 4.0% | 3.6% | 5.1% | 3.1% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Modern Beauty Salon Holdings Ltd ($919) | 50.7% | -4.6% | 81.3% | 71.8% | 13.3% |
| JC Group Holdings Ltd ($8326) | | 215.6% | 92.8% | 66.3% | 81.7% |
| Starbucks Corp ($4337) | 36.4% | -6.0% | 52.8% | 51.4% | 46.2% |
| Sa Sa International Holdings Ltd ($178) | 53.5% | 52.7% | 49.0% | 39.8% | 19.0% |
| Noble House China Holdings Ltd ($8246) | 17.7% | -67.7% | -113.8% | 35.6% | 68.8% |
| |
|---|
| Median (117 companies) | 12.2% | 8.9% | 8.7% | 5.8% | 5.7% |
|---|
| Trinity Ltd ($891) | 13.4% | 6.5% | 4.3% | -2.4% | -10.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sparkle Roll Group Ltd ($970) | 0.6x | 4.0x | 9.3x | 23.5x | 8.5x |
| Parkson Retail Group Ltd ($3368) | 0.8x | 2.3x | 3.6x | 9.8x | 11.1x |
| Maoye International Holdings Ltd ($848) | 2.9x | 3.3x | 3.4x | 9.0x | |
| Century Ginwa Retail Holdings Ltd ($162) | 2.0x | 2.5x | 4.8x | 7.3x | |
| China Rundong Auto Group Ltd ($1365) | 13.0x | 7.3x | 6.3x | 6.6x | |
| |
|---|
| Median (91 companies) | -0.5x | -0.6x | -0.2x | -0.5x | -0.6x |
|---|
| Trinity Ltd ($891) | -0.2x | 0.2x | 0.6x | 18.2x | |
