Aa CAPEX jumped on 103% in 2016 while Revenue decreased slightly on 1.1%
05 Apr 2016 • About Aa (
$AA.) • By InTwits
Aa reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Aa has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.2%. At the same time it's in pair with industry average of 2.9%.
- CAPEX is quite volatile: 75 in FY2016, 37 in FY2015, 9.7 in FY2014, 6.6 in FY2013, 26.6 in FY2012
- The company has highly profitable business model: ROIC is at 32.8%
- It operates with high leverage: Net Debt/EBITDA is 7.8x while industry average is -0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Aa ($AA.) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 973.9 | 968.0 | 973.9 | 984.0 | 973.0 | -1.1% |
| Gross Profit | 588.7 | 618.6 | 630.3 | 638.0 | 626.0 | -1.9% |
| SG&A | 374.7 | 300.1 | 259.4 | 313.0 | 322.0 | 2.9% |
| EBITDA | 346.0 | 357.8 | 410.8 | 373.0 | 358.0 | -4.0% |
| Net Income | 113.1 | 235.9 | 153.4 | 69.0 | 6.0 | -91.3% |
Balance Sheet
|
|---|
| Cash | 60.1 | 31.9 | 203.2 | 302.0 | 166.0 | -45.0% |
| Short Term Debt | 10.7 | 17.8 | 12.1 | 35.0 | 40.0 | 14.3% |
| Long Term Debt | 250.6 | 13.6 | 3,359.3 | 3,207.0 | 2,914.0 | -9.1% |
Cash flow
|
|---|
| Capex | 26.6 | 6.6 | 9.7 | 37.0 | 75.0 | 102.7% |
Ratios
|
|---|
| Revenue growth | 3.1% | -0.6% | 0.6% | 1.0% | -1.1% | |
| EBITDA growth | -15.2% | 3.4% | 14.8% | -9.2% | -4.0% | |
| Gross Margin | 60.4% | 63.9% | 64.7% | 64.8% | 64.3% | -0.5% |
| EBITDA Margin | 35.5% | 37.0% | 42.2% | 37.9% | 36.8% | -1.1% |
| Net Income Margin | 11.6% | 24.4% | 15.8% | 7.0% | 0.6% | -6.4% |
| SG&A, % of revenue | 38.5% | 31.0% | 26.6% | 31.8% | 33.1% | 1.3% |
| CAPEX, % of revenue | 2.7% | 0.7% | 1.0% | 3.8% | 7.7% | 3.9% |
| ROIC | 138.0% | 134.4% | 61.1% | 34.9% | 32.8% | -2.1% |
| Net Debt/EBITDA | 0.6x | -0.0x | 7.7x | 7.9x | 7.8x | -0.1x |
Revenue and profitability
Aa's Revenue decreased slightly on 1.1% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.1 pp from 37.9% to 36.8% in FY2016.
Gross Margin decreased slightly on 0.50 pp from 64.8% to 64.3% in FY2016. SG&A as a % of Revenue increased slightly on 1.3 pp from 31.8% to 33.1% in FY2016.
Net Income marign decreased on 6.4 pp from 7.0% to 0.62% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Aa had CAPEX/Revenue of 7.7%. Aa showed CAPEX/Revenue growth of 7.0 pp from 0.68% in FY2013 to 7.7% in FY2016. It's average level of CAPEX/Revenue for the last three years was 4.2%.
Leverage (Debt)
Debt level is 7.8x Net Debt / EBITDA and 8.3x Debt / EBITDA. Net Debt / EBITDA decreased on 0.1x from 7.9x to 7.8x in FY2016. Debt decreased on 8.9% in FY2016 while cash dropped on 45.0% in FY2016.
Appendix 1: Peers in General Retailers
Below we provide Aa benchmarking against other companies in General 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Just Eat ($JE.) | | | | 57.7% | 51.7% |
| Signet Jewelers Ltd ($SIG) | | 6.2% | 5.7% | 36.3% | 14.2% |
| AO World ($AO.) | 27.6% | 31.3% | 40.0% | 23.8% | |
| Caffyns ($78GL) | | -3.1% | 17.1% | 8.9% | 10.5% |
| Entu (Uk) Ltd ($ENTU) | 36.5% | 4.1% | -3.4% | 7.3% | |
| |
|---|
| Median (9 companies) | 20.1% | 12.6% | 11.4% | 7.3% | 12.4% |
|---|
| Aa ($AA.) | | -0.6% | 0.6% | 1.0% | -1.1% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Just Eat ($JE.) | | | 89.7% | 90.2% | 90.6% |
| 7Digital Group ($7DIG) | 16.5% | 13.9% | 59.0% | 68.1% | |
| Stanley Gibbons Group ($SGI) | 43.7% | 43.2% | | 51.5% | |
| French Connection Group ($FCCN) | 48.1% | 47.9% | 47.6% | 46.7% | 46.3% |
| Signet Jewelers Ltd ($SIG) | 38.3% | 38.6% | 37.5% | 36.2% | 37.3% |
| |
|---|
| Median (10 companies) | 32.4% | 30.7% | 31.6% | 34.3% | 41.8% |
|---|
| Aa ($AA.) | 60.4% | 63.9% | 64.7% | 64.8% | 64.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 7Digital Group ($7DIG) | -8.4% | -10.9% | -34.2% | 24.1% | |
| Just Eat ($JE.) | | | 16.3% | 21.0% | 25.8% |
| Signet Jewelers Ltd ($SIG) | 16.0% | 16.6% | 16.2% | 12.7% | 13.4% |
| Entu (Uk) Ltd ($ENTU) | 7.4% | 6.7% | 10.3% | 8.6% | |
| Stanley Gibbons Group ($SGI) | 17.3% | 13.9% | | 8.6% | |
| |
|---|
| Median (10 companies) | 7.4% | 3.7% | 2.3% | 7.5% | 7.8% |
|---|
| Aa ($AA.) | 35.5% | 37.0% | 42.2% | 37.9% | 36.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 7Digital Group ($7DIG) | 2.2% | 0.3% | 3.4% | 8.2% | |
| Signet Jewelers Ltd ($SIG) | 2.6% | 3.4% | 3.6% | 3.8% | 3.5% |
| Lotte Shopping Co Ltd ($LOTS) | 7.1% | 6.5% | 6.6% | 3.8% | |
| Stanley Gibbons Group ($SGI) | 1.0% | 1.1% | | 2.4% | |
| Just Eat ($JE.) | | | 3.4% | 2.3% | 2.5% |
| |
|---|
| Median (10 companies) | 1.2% | 1.0% | 3.4% | 1.9% | 2.1% |
|---|
| Aa ($AA.) | 2.7% | 0.7% | 1.0% | 3.8% | 7.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Entu (Uk) Ltd ($ENTU) | 144.6% | 68.6% | 134.8% | 461.3% | |
| Caffyns ($78GL) | 60.8% | 15.4% | 11.1% | 37.3% | 10.4% |
| 7Digital Group ($7DIG) | -7.7% | -11.3% | -51.2% | 22.2% | |
| Signet Jewelers Ltd ($SIG) | 21.6% | 21.5% | 20.4% | 15.5% | 15.2% |
| Just Eat ($JE.) | | | 16.4% | 9.1% | 9.8% |
| |
|---|
| Median (10 companies) | 13.3% | 12.1% | 6.9% | 6.8% | 10.1% |
|---|
| Aa ($AA.) | 138.0% | 134.4% | 61.1% | 34.9% | 32.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lotte Shopping Co Ltd ($LOTS) | 5.1x | 4.9x | 5.2x | 6.7x | |
| Stanley Gibbons Group ($SGI) | -1.1x | -3.0x | | 2.3x | |
| Signet Jewelers Ltd ($SIG) | -0.8x | -0.5x | -0.3x | 1.7x | 1.4x |
| Caffyns ($78GL) | 0.5x | 2.0x | 3.0x | 0.7x | 2.2x |
| Entu (Uk) Ltd ($ENTU) | -0.8x | 0.3x | -0.6x | -0.2x | |
| |
|---|
| Median (9 companies) | -0.8x | -0.5x | -0.5x | -0.2x | 1.4x |
|---|
| Aa ($AA.) | 0.6x | -0.0x | 7.7x | 7.9x | 7.8x |
