French Connection Group revenue increased slightly on 0.52% and EBITDA Margin increased on 2.0 pp from -2.2% to -0.19%
13 Mar 2018 • About French Connection Group (
$FCCN) • By InTwits
French Connection Group reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -0.2%
- French Connection Group spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 0.0%. Average EBITDA Margin for the same period was -1.1%
- French Connection Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has unprofitable business model: ROIC is -3.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased slightly on 0.52%. During the last 5 years Revenue growth bottomed in FY2016 at -8.0% and was accelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 10.4 pp from 2.2% to 12.6% in FY2018.
Gross Margin decreased slightly on 0.56 pp from 45.8% to 45.2% in FY2018. Gross Margin followed a declining trend at -0.58 pp per annum in FY2014-FY2018. SG&A as a % of Revenue decreased on 2.5 pp from 51.8% to 49.2% in FY2018.
Net Income margin increased slightly on 2.0 pp from -3.7% to -1.7% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 1.2%. French Connection Group's CAPEX/Revenue increased slightly on 0.55 pp from 0.62% in FY2015 to 1.2% in FY2018. For the last three years the average CAPEX/Revenue was 0.70%.
Return on investment
The company operates at negative ROIC (-3.6%) and ROE (-5.5%). ROIC increased on 5.8 pp from -9.4% to -3.6% in FY2018. ROE increased on 5.4 pp from -10.9% to -5.5% in FY2018.
Leverage (Debt)
The company has no debt. Cash dropped on 29.6%.
Financial and operational results
FY ended 31 Jan 2018
French Connection Group ($FCCN) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 189.4 | 178.5 | 164.2 | 153.2 | 154.0 | 0.5% |
| Gross Profit | 90.2 | 83.4 | 76.0 | 70.1 | 69.6 | -0.7% |
| SG&A | 101.4 | 90.8 | 87.6 | 79.3 | 75.8 | -4.4% |
| EBITDA | -3.2 | 0.7 | -2.7 | -3.4 | -0.3 | |
| Net Income | -6.0 | -1.5 | -3.3 | -5.6 | -2.6 | |
Balance Sheet
|
|---|
| Cash | 28.2 | 23.2 | 14.0 | 13.5 | 9.5 | -29.6% |
| 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 | 0.8 | 1.1 | 0.8 | 0.7 | 1.8 | 157.1% |
Ratios
|
|---|
| Revenue growth | -4.0% | -5.8% | -8.0% | -6.7% | 0.5% | |
| EBITDA growth | -60.0% | -121.9% | -485.7% | 25.9% | -91.2% | |
|
|---|
| Gross Margin | 47.6% | 46.7% | 46.3% | 45.8% | 45.2% | -0.6% |
| EBITDA Margin | -1.7% | 0.4% | -1.6% | -2.2% | -0.2% | 2.0% |
| SG&A, % of revenue | 53.5% | 50.9% | 53.3% | 51.8% | 49.2% | -2.5% |
| Net Income Margin | -3.2% | -0.8% | -2.0% | -3.7% | -1.7% | 2.0% |
| CAPEX, % of revenue | 0.4% | 0.6% | 0.5% | 0.5% | 1.2% | 0.7% |
|
|---|
| ROIC | -9.1% | -1.7% | -8.4% | -9.4% | -3.6% | 5.8% |
| ROE | -10.1% | -2.7% | -6.0% | -10.9% | -5.5% | 5.4% |
| Net Debt/EBITDA | | -33.1x | | | |
Peers in General Retailers
Below we provide French Connection Group 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Just Eat ($JE.) | | 57.7% | 51.7% | 45.4% | |
| AO World ($AO.) | 40.0% | 23.8% | 25.7% | 17.0% | |
| Mysale Group ($MYSL) | 23.4% | 5.1% | 7.0% | 6.4% | |
| Aa ($AA.) | 0.6% | 1.0% | -5.0% | -0.2% | |
| Shoe Zone ($SHOE) | -10.8% | -3.5% | -4.2% | -1.3% | |
| |
|---|
| Median (9 companies) | 3.4% | 5.1% | 3.5% | -1.3% | 0.5% |
|---|
| French Connection Group ($FCCN) | | -5.8% | -8.0% | -6.7% | 0.5% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Just Eat ($JE.) | 89.7% | 90.2% | 90.6% | 82.4% | |
| Aa ($AA.) | 64.7% | 64.8% | 64.0% | 63.5% | |
| Lotte Shopping Co Ltd ($LOTS) | 31.2% | 30.6% | 32.6% | 42.0% | |
| Signet Jewelers Ltd ($SIG) | 37.5% | 36.2% | 37.3% | 36.8% | |
| Stanley Gibbons Group ($SGI) | | 51.5% | 40.3% | 31.6% | |
| |
|---|
| Median (9 companies) | 31.2% | 31.5% | 32.0% | 31.6% | 11.3% |
|---|
| French Connection Group ($FCCN) | 47.6% | 46.7% | 46.3% | 45.8% | 45.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 42.2% | 37.9% | 37.4% | 37.6% | |
| Signet Jewelers Ltd ($SIG) | 16.2% | 12.7% | 13.4% | 14.9% | |
| Shoe Zone ($SHOE) | 9.3% | 8.4% | 8.5% | 8.1% | |
| Lotte Shopping Co Ltd ($LOTS) | 7.4% | 6.3% | 7.2% | 7.8% | |
| Mysale Group ($MYSL) | 2.3% | -4.7% | 1.8% | 2.0% | |
| |
|---|
| Median (9 companies) | 7.4% | 8.5% | 2.0% | 2.0% | 1.6% |
|---|
| French Connection Group ($FCCN) | -1.7% | 0.4% | -1.6% | -2.2% | -0.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 1.0% | 3.8% | 8.0% | 7.6% | |
| Lotte Shopping Co Ltd ($LOTS) | 6.6% | 3.8% | 5.0% | 4.9% | |
| Signet Jewelers Ltd ($SIG) | 3.6% | 3.8% | 3.5% | 4.3% | |
| Shoe Zone ($SHOE) | 1.2% | 1.1% | 2.0% | 3.3% | |
| Just Eat ($JE.) | 3.4% | 2.3% | 2.5% | 2.7% | |
| |
|---|
| Median (9 companies) | 1.3% | 2.1% | 1.8% | 2.7% | 2.6% |
|---|
| French Connection Group ($FCCN) | 0.4% | 0.6% | 0.5% | 0.5% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 61.1% | 34.9% | 32.0% | 30.8% | |
| Shoe Zone ($SHOE) | 34.2% | 30.0% | 30.6% | 30.7% | |
| Signet Jewelers Ltd ($SIG) | 20.4% | 15.5% | 15.2% | 16.0% | |
| Caffyns ($78GL) | 11.1% | 37.3% | 10.4% | 7.1% | 5.5% |
| Lotte Shopping Co Ltd ($LOTS) | 3.8% | 2.6% | 2.3% | 1.9% | |
| |
|---|
| Median (10 companies) | 10.5% | 12.3% | 2.3% | 1.9% | 5.5% |
|---|
| French Connection Group ($FCCN) | -9.1% | -1.7% | -8.4% | -9.4% | -3.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 7.7x | 7.9x | 8.0x | 7.6x | |
| Lotte Shopping Co Ltd ($LOTS) | 5.2x | 6.7x | 7.1x | 3.5x | |
| Caffyns ($78GL) | 3.0x | 0.7x | 2.2x | 2.2x | 4.0x |
| Signet Jewelers Ltd ($SIG) | -0.3x | 1.7x | 1.4x | 1.4x | |
| Shoe Zone ($SHOE) | -0.6x | -1.0x | -1.1x | -0.9x | |
| |
|---|
| Median (6 companies) | -0.6x | -0.2x | 1.4x | 1.8x | 4.0x |
|---|
