Lenta Ltd is an attractive growth stock
19 Mar 2015 • About Lenta Ltd (
$LNTA) • By InTwits
Pay attention to Lenta Ltd as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Lenta Ltd showed growth in the last financial year. The company's revenue surged on 34.5% in FY2014. Together with revenue growth Lenta Ltd also managed to keep EBITDA growth. EBITDA grew 32.3% for the same period.
In the longer period the company showed fast revenue growth of 29.3% from 2011 to 2014 annually. EBITDA surged on 36.5% from 2011 to 2014 annually.
Lenta Ltd ($LNTA) financials for the last 5 years
| mln. RUB | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 70,628 | 89,766 | 109,910 | 144,266 | 193,988 |
|---|
| Revenue growth, % | | 27.1% | 22.4% | 31.3% | 34.5% |
|---|
| Gross margin, % | 18.1% | 18.6% | 20.6% | 21.8% | 22.6% |
|---|
| SG&A, % | 10.3% | 10.3% | 10.9% | 11.6% | 12.6% |
|---|
| EBITDA | 6,133 | 8,383 | 11,741 | 16,118 | 21,318 |
|---|
| EBITDA growth, % | | 36.7% | 40.1% | 37.3% | 32.3% |
|---|
| EBITDA margin, % | 8.68% | 9.34% | 10.7% | 11.2% | 11.0% |
|---|
| Net Income | 2,220 | 1,697 | 5,136 | 7,147 | 9,075 |
|---|
| Net Income margin, % | 3.14% | 1.89% | 4.67% | 4.95% | 4.68% |
|---|
| |
| CAPEX | 1,266 | 3,930 | 14,700 | 23,394 | 34,696 |
|---|
| CAPEX/Revenue, % | 1.79% | 4.38% | 13.4% | 16.2% | 17.9% |
|---|
| Debt | 7,726 | 24,961 | 28,877 | 46,043 | 71,251 |
|---|
| Cash | 771 | 5,136 | 3,536 | 6,212 | 12,036 |
|---|
| Net Debt/EBITDA | 1.1x | 2.4x | 2.2x | 2.5x | 2.8x |
|---|
| |
| ROIC, % | | 44.1% | 42.9% | 34.0% | 24.5% |
|---|
| ROE, % | | | | | 83.9% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 11.2% in FY2013 to 11% in FY2014. If we look for the longer period Lenta Ltd showed fast EBITDA margin growth of 1.70 pp from 9.30% in 2011 to 11% in 2014.
We call Lenta Ltd an attractive growth stock as together with the growth it delivers high ROIC at 24.5%. Three years ago it was considerably higher at 44.1%. It's average ROIC for the last three years was 33.8%.
The company showed decline of 0.300 pp from 5% to 4.70% in 2014. In the last 3 years Lenta Ltd's Net Income margin surged on 2.80 pp from 1.90% in 2011 to 4.70% in 2014.
Lenta Ltd operates at ROE of 83.9%.
Capital expenditures (CAPEX)
To fuel this fast growth Lenta Ltd had to invest in CAPEX.The company's CAPEX/Revenue was 17.9% in FY2014. Lenta Ltd showed fast CAPEX/Revenue growth of 13.5 pp from 4.38% in 2011 to 17.9% in 2014. Average CAPEX/Revenue for the last three years was 15.8%.
Leverage (Debt)
Lenta Ltd has medium debt level at 2.8x Net Debt/EBITDA to maintain high growth. In the last 3 years Lenta Ltd showed fast leverage growth of 0.41x from 2.36x in 2011 to 2.78x in 2014.
Valuation vs. comparable companies
At the end of trading day today Lenta Ltd traded at 2.8x EV/EBITDA which is 82.6% lower than 16.0x Food & Drug Retailers peer group avearge calculated on the basis of 20 companies. The company trades at 0.0x P/E which is 96.9% lower than 0.1x Food & Drug Retailers industry avearge calculated based on 5 companies.
Peers in Food & Drug Retailers
Below we provide Lenta Ltd benchmarking against other companies in Food & Drug Retailers 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Magnit PJSC ($MGNT) | | 42.2% | 33.5% | 29.4% | 32.3% |
| Crawshaw Group ($CRAW) | | 0.6% | -0.9% | -0.6% | 11.9% |
| Dairy Farm International Hldgs ($DFIB) | | 14.6% | 7.3% | 5.7% | 6.3% |
| Jardine Matheson Hldgs ($J36) | | 26.3% | 4.3% | -0.3% | 1.2% |
| Total Produce ($TOT) | | -2.5% | 6.4% | 8.5% | 1.1% |
| |
|---|
| Median (6 companies) | | 20.5% | 6.9% | 2.7% | 3.7% |
|---|
| Lenta Ltd ($LNTA) | | 27.1% | 22.4% | 31.3% | 34.5% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Snacktime ($SNAK) | 59.0% | 55.0% | 56.6% | 51.8% | 55.1% |
| Crawshaw Group ($CRAW) | 43.0% | 43.6% | 43.3% | 43.7% | 43.8% |
| Dairy Farm International Hldgs ($DFIB) | 29.8% | 29.4% | 28.9% | 29.8% | 29.9% |
| Magnit PJSC ($MGNT) | 22.4% | 24.3% | 26.5% | 28.5% | 28.9% |
| Jardine Matheson Hldgs ($J36) | 24.8% | 22.6% | 22.4% | 22.3% | 23.4% |
| |
|---|
| Median (6 companies) | 27.3% | 26.8% | 27.7% | 29.2% | 29.4% |
|---|
| Lenta Ltd ($LNTA) | 18.1% | 18.6% | 20.6% | 21.8% | 22.6% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Jardine Matheson Hldgs ($J36) | 26.0% | 24.4% | 13.1% | 11.6% | 11.8% |
| Magnit PJSC ($MGNT) | 7.9% | 7.8% | 10.3% | 11.0% | 11.3% |
| Dairy Farm International Hldgs ($DFIB) | 7.9% | 7.6% | 6.6% | 6.9% | 6.6% |
| Crawshaw Group ($CRAW) | 3.8% | 5.4% | 3.7% | 3.4% | 6.5% |
| Snacktime ($SNAK) | -13.3% | 11.9% | 6.1% | 3.1% | 5.8% |
| |
|---|
| Median (6 companies) | 5.8% | 7.7% | 6.3% | 5.1% | 6.5% |
|---|
| Lenta Ltd ($LNTA) | 8.7% | 9.3% | 10.7% | 11.2% | 11.0% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Magnit PJSC ($MGNT) | 15.2% | 14.5% | 10.5% | 8.6% | 7.3% |
| Jardine Matheson Hldgs ($J36) | 3.0% | 3.6% | 4.9% | 4.4% | 3.5% |
| Snacktime ($SNAK) | 3.9% | 2.6% | 5.3% | 4.3% | 3.4% |
| Dairy Farm International Hldgs ($DFIB) | 2.6% | 2.3% | 3.0% | 2.9% | 2.7% |
| Crawshaw Group ($CRAW) | 3.4% | 3.6% | 1.1% | 1.0% | 1.2% |
| |
|---|
| Median (6 companies) | 3.2% | 3.1% | 3.9% | 3.6% | 3.0% |
|---|
| Lenta Ltd ($LNTA) | 1.8% | 4.4% | 13.4% | 16.2% | 17.9% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Magnit PJSC ($MGNT) | 19.9% | 17.9% | 23.1% | 26.0% | 33.2% |
| Dairy Farm International Hldgs ($DFIB) | 37.7% | 39.6% | 32.8% | 34.6% | 31.1% |
| Total Produce ($TOT) | 9.3% | 8.8% | 9.0% | 11.9% | 10.3% |
| Crawshaw Group ($CRAW) | 2.8% | 5.5% | 1.2% | 2.1% | 8.6% |
| Jardine Matheson Hldgs ($J36) | 18.8% | 18.2% | 7.9% | 6.4% | 6.6% |
| |
|---|
| Median (6 companies) | 14.0% | 13.4% | 8.5% | 9.2% | 9.4% |
|---|
| Lenta Ltd ($LNTA) | | 44.1% | 42.9% | 34.0% | 24.5% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Snacktime ($SNAK) | | 0.8x | 2.0x | 6.0x | 4.4x |
| Jardine Matheson Hldgs ($J36) | 0.6x | 0.6x | 1.4x | 1.3x | 1.3x |
| Magnit PJSC ($MGNT) | 1.4x | 1.3x | 1.1x | 1.1x | 0.9x |
| Total Produce ($TOT) | 0.9x | 1.4x | 1.0x | 0.2x | 0.3x |
| Dairy Farm International Hldgs ($DFIB) | -0.3x | -0.7x | -0.8x | -0.9x | -0.7x |
| |
|---|
| Median (6 companies) | 0.9x | 0.7x | 1.0x | 0.6x | 0.6x |
|---|
| Lenta Ltd ($LNTA) | 1.1x | 2.4x | 2.2x | 2.5x | 2.8x |
