Hornby reports 324% EBITDA decline and 4.1% Revenue decline
22 Jun 2016 • About Hornby (
$HRN) • By InTwits
Hornby reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hornby is a company in decline: FY2016 revenue growth was -4.1%, 5 years revenue CAGR was -2.5%
- EBITDA Margin is quite volatile: -17.3% in FY2016, 7.4% in FY2015, 1.8% in FY2014, 1.8% in FY2013, 14.5% in FY2012
- Hornby has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's a lot of higher than industry average of 3.7%.
- CAPEX is quite volatile: 0.032 in FY2016, 0.044 in FY2015, 0.026 in FY2014, 0.082 in FY2013, 6.8 in FY2012
- The company has unprofitable business model: ROIC is at -36.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hornby ($HRN) key annual financial indicators
| mln. £ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 64.447 | 57.395 | 51.557 | 58.135 | 55.757 | -4.1% |
| Gross Profit | 31.157 | 24.478 | 23.327 | 27.174 | 21.765 | -19.9% |
| SG&A | 21.055 | 20.542 | 19.689 | 21.424 | 30.565 | 42.7% |
| EBITDA | 9.321 | 1.047 | 0.952 | 4.312 | -9.653 | -323.9% |
| Net Income | 3.164 | -2.501 | -4.445 | -0.120 | -13.714 | 11,328.3% |
Balance Sheet
|
|---|
| Cash | 1.952 | 3.554 | 0.619 | 0.451 | 0.677 | 50.1% |
| Short Term Debt | 3.474 | 3.907 | 7.630 | 7.747 | 7.883 | 1.8% |
| Long Term Debt | 4.888 | 1.815 | 0.242 | 0.163 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 3.787 | 3.457 | 4.059 | 4.073 | 3.221 | -20.9% |
Ratios
|
|---|
| Revenue growth | 1.7% | -10.9% | -10.2% | 12.8% | -4.1% | |
| EBITDA growth | -1.3% | -88.8% | -9.1% | 352.9% | -323.9% | |
| Gross Margin | 48.3% | 42.6% | 45.2% | 46.7% | 39.0% | -7.7% |
| EBITDA Margin | 14.5% | 1.8% | 1.8% | 7.4% | -17.3% | -24.7% |
| Net Income Margin | 4.9% | -4.4% | -8.6% | -0.2% | -24.6% | -24.4% |
| SG&A, % of revenue | 32.7% | 35.8% | 38.2% | 36.9% | 54.8% | 18.0% |
| CAPEX, % of revenue | 5.9% | 6.0% | 7.9% | 7.0% | 5.8% | -1.2% |
| ROIC | 10.4% | -6.8% | -7.7% | 0.5% | -36.6% | -37.1% |
| ROE | 8.3% | -6.6% | -13.1% | -0.4% | -42.9% | -42.5% |
| Net Debt/EBITDA | 0.7x | 2.1x | 7.6x | 1.7x | | -1.7x |
Revenue and profitability
Hornby's Revenue decreased on 4.1% in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 15.8 pp from -19.3% to -3.5% in FY2016.
Gross Margin decreased on 7.7 pp from 46.7% to 39.0% in FY2016. SG&A as a % of Revenue jumped on 18.0 pp from 36.9% to 54.8% in FY2016.
Net Income marign dropped on 24.4 pp from -0.21% to -24.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Hornby had CAPEX/Revenue of 5.8%. The company showed almost no change in CAPEX/Revenue from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 6.9%.
Return on investment
The company operates at negative ROIC (-36.64%) and ROE (-42.93%). ROIC dropped on 37.1 pp from 0.49% to -36.6% in FY2016. ROE dropped on 42.5 pp from -0.38% to -42.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.6x and Debt / EBITDA is . Net Debt / EBITDA dropped on 1.7x from 1.7x to in FY2016. Debt showed almost no change in FY2016 while cash jumped on 50.1% in FY2016.
Appendix 1: Peers in Leisure Goods
Below you can find Hornby benchmarking vs. other companies in Leisure Goods 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vmoto Ltd ($VMT) | 15.9% | 205.5% | 70.6% | 10.9% | |
| Tandem Group ($TND) | -16.3% | -2.1% | 10.5% | 9.8% | |
| Konami Corp ($KNM) | | -15.0% | -3.7% | 0.3% | 14.6% |
| Lg Electronics Inc ($39IB) | 1.6% | 5.5% | 1.5% | -4.3% | |
| |
|---|
| Median (4 companies) | 1.6% | 1.7% | 6.0% | 5.0% | 14.6% |
|---|
| Hornby ($HRN) | | -10.9% | -10.2% | 12.8% | -4.1% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Konami Corp ($KNM) | 34.4% | 32.4% | 31.3% | 32.8% | 35.0% |
| Tandem Group ($TND) | 29.7% | 29.2% | 30.5% | 29.4% | |
| Lg Electronics Inc ($39IB) | 23.3% | 23.1% | 23.3% | 22.8% | |
| Vmoto Ltd ($VMT) | 18.0% | 15.0% | 14.7% | 16.7% | |
| |
|---|
| Median (4 companies) | 26.5% | 26.2% | 26.9% | 26.1% | 35.0% |
|---|
| Hornby ($HRN) | 48.3% | 42.6% | 45.2% | 46.7% | 39.0% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vmoto Ltd ($VMT) | 31.8% | 3.2% | 2.0% | 18.3% | |
| Konami Corp ($KNM) | 19.1% | 14.3% | 13.3% | 16.5% | 21.5% |
| Lg Electronics Inc ($39IB) | 5.4% | 5.5% | 6.4% | 5.5% | |
| Tandem Group ($TND) | 3.6% | 3.8% | 5.3% | 4.7% | |
| |
|---|
| Median (4 companies) | 12.3% | 4.7% | 5.9% | 11.0% | 21.5% |
|---|
| Hornby ($HRN) | 14.5% | 1.8% | 1.8% | 7.4% | -17.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Konami Corp ($KNM) | 3.5% | 4.4% | 21.7% | 11.8% | 7.6% |
| Lg Electronics Inc ($39IB) | 3.2% | 3.6% | 3.7% | 3.1% | |
| Vmoto Ltd ($VMT) | 14.2% | 1.6% | 2.6% | 1.8% | |
| Tandem Group ($TND) | 0.5% | 10.2% | 1.2% | 0.4% | |
| |
|---|
| Median (4 companies) | 3.3% | 4.0% | 3.1% | 2.4% | 7.6% |
|---|
| Hornby ($HRN) | 5.9% | 6.0% | 7.9% | 7.0% | 5.8% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vmoto Ltd ($VMT) | -16.1% | 1.8% | 1.4% | 24.2% | |
| Tandem Group ($TND) | 20.4% | 37.6% | 37.6% | 16.6% | |
| Konami Corp ($KNM) | 16.2% | 8.4% | 3.2% | 6.6% | 10.4% |
| Lg Electronics Inc ($39IB) | 6.1% | 6.3% | 8.9% | 5.8% | |
| |
|---|
| Median (4 companies) | 11.2% | 7.4% | 6.0% | 11.6% | 10.4% |
|---|
| Hornby ($HRN) | 10.4% | -6.8% | -7.7% | 0.5% | -36.6% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tandem Group ($TND) | -1.4x | -1.4x | -1.1x | 3.5x | |
| Lg Electronics Inc ($39IB) | 2.2x | 2.0x | 1.8x | 2.0x | |
| Vmoto Ltd ($VMT) | 0.9x | 1.4x | 1.0x | -0.5x | |
| Konami Corp ($KNM) | -0.7x | -0.9x | -0.2x | -0.6x | -1.4x |
| |
|---|
| Median (4 companies) | 0.1x | 0.2x | 0.4x | 0.7x | -1.4x |
|---|
| Hornby ($HRN) | 0.7x | 2.1x | 7.6x | 1.7x | |
