Peel Hotels reports 11.8% EBITDA decline in 2018 and 1.00 pp EBITDA Margin decline from 12.4% to 11.4%
27 Jul 2018 • About Peel Hotels (
$PHO) • By InTwits
Peel Hotels reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Peel Hotels has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.9%. At the same time it's in pair with industry average of 4.2%
- CAPEX is quite volatile: £2m in FY2018, £2m in FY2017, £1m in FY2016, £1m in FY2015, £1m in FY2014
- The company has unprofitable business model: ROIC is -0.9%
- It operates with high leverage: Net Debt/EBITDA is 4.3x while industry average is -2.3x
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 decreased on 4.1%. During the last 5 years Revenue growth topped in FY2015 at 6.1% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.00 pp from 12.4% to 11.4% in FY2018. During FY2014-FY2018 EBITDA Margin topped in FY2016 at 15.1% and was declining since that time.
Gross Margin decreased slightly on 1.9 pp from 17.5% to 15.6% in FY2018. During the last 5 years Gross Margin topped in FY2015 at 19.4% and was declining since that time. SG&A as a % of Revenue showed almost no change in FY2018.
Net Income margin decreased on 7.8 pp from 2.6% to -5.2% in FY2018. During the last 5 years Net Income margin topped in FY2016 at 4.7% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 4.4%. The company showed small growth in CAPEX/Revenue of 0.72 pp from 3.7% in FY2015 to 4.4% in FY2018. For the last three years the average CAPEX/Revenue was 4.2%. CAPEX as a % of Revenue grew at 0.26 pp per annum in the last 5 years.
Return on investment
The company operates at negative ROIC (-0.9%) and ROE (-3.6%). ROIC decreased on 4.5 pp from 3.6% to -0.91% in FY2018. ROE decreased on 5.4 pp from 1.8% to -3.6% in FY2018. During FY2014-FY2018 ROIC topped in FY2016 at 4.4% and was declining since that time. During the last 5 years ROE topped in FY2016 at 3.4% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.3x and Debt / EBITDA is 5.0x. Net Debt / EBITDA surged on 4.0x from 0.4x to 4.3x in FY2018. Debt surged on 797% while cash surged on 340%. During FY2014-FY2018 Net Debt/EBITDA bottomed in FY2017 at 0.4x.
The company has no short term refinancing risk: short term debt is zero.
Financial and operational results
FY ended 28 Jan 2018
Peel Hotels ($PHO) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 15.510 | 16.454 | 17.011 | 16.790 | 16.097 | -4.1% |
| Gross Profit | 2.538 | 3.196 | 3.244 | 2.938 | 2.509 | -14.6% |
| SG&A | 0.558 | 0.723 | 0.674 | 0.688 | 0.675 | -1.8% |
| EBITDA | 1.980 | 2.473 | 2.571 | 2.080 | 1.834 | -11.8% |
| Net Income | 0.389 | 0.734 | 0.798 | 0.435 | -0.844 | -294.2% |
Balance Sheet
|
|---|
| Cash | 0.195 | 0.147 | 0.283 | 0.293 | 1.287 | 339.9% |
| Short Term Debt | 1.061 | 0.901 | 0.927 | 0.000 | 0.000 | |
| Long Term Debt | 10.844 | 10.134 | 9.491 | 1.030 | 9.241 | 797.2% |
Cash flow
|
|---|
| Capex | 0.519 | 0.603 | 0.691 | 0.711 | 0.706 | -0.7% |
Ratios
|
|---|
| Revenue growth | 1.8% | 6.1% | 3.4% | -1.3% | -4.1% | |
| EBITDA growth | 16.6% | 24.9% | 3.9% | -19.1% | -11.8% | |
|
|---|
| Gross Margin | 16.4% | 19.4% | 19.1% | 17.5% | 15.6% | -1.9% |
| EBITDA Margin | 12.8% | 15.0% | 15.1% | 12.4% | 11.4% | -1.0% |
| SG&A, % of revenue | 3.6% | 4.4% | 4.0% | 4.1% | 4.2% | 0.1% |
| Net Income Margin | 2.5% | 4.5% | 4.7% | 2.6% | -5.2% | -7.8% |
| CAPEX, % of revenue | 3.3% | 3.7% | 4.1% | 4.2% | 4.4% | 0.2% |
|
|---|
| ROIC | 2.6% | 4.1% | 4.4% | 3.6% | -0.9% | -4.5% |
| ROE | 1.8% | 3.2% | 3.4% | 1.8% | -3.6% | -5.4% |
| Net Debt/EBITDA | 5.9x | 4.4x | 3.9x | 0.4x | 4.3x | 4.0x |
Peers in Travel & Leisure
Below you can find Peel Hotels benchmarking vs. other companies in Travel & Leisure 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 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Nektan ($NKTN) | 75.8% | -71.7% | 995.3% | 129.1% | |
| Celtic ($CCP) | -14.6% | -21.1% | 1.8% | 74.3% | |
| Webis Holdings ($WEB) | -55.0% | 29.7% | 45.3% | 65.8% | |
| Easyhotel ($EZH) | 34.1% | 56.4% | 8.7% | 39.7% | |
| Eclectic Bar Grp ($BAR) | 10.5% | -1.9% | 1.4% | 38.6% | |
| |
|---|
| Median (26 companies) | 5.9% | 7.6% | 8.7% | 7.9% | 5.7% |
|---|
| Peel Hotels ($PHO) | | 6.1% | 3.4% | -1.3% | -4.1% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Intercontinental Hotels Group ($IHG) | 60.1% | 64.5% | 86.0% | 86.0% | |
| Eclectic Bar Grp ($BAR) | 79.0% | 79.4% | 80.7% | 82.3% | |
| Paddy Power ($PAP) | 81.0% | 74.7% | 76.9% | 76.8% | |
| Action Hotels ($AHCG) | 73.3% | 74.0% | 70.7% | 69.8% | |
| Nektan ($NKTN) | 57.6% | 42.6% | 67.9% | 64.1% | |
| |
|---|
| Median (17 companies) | 56.6% | 41.5% | 50.7% | 40.0% | 24.8% |
|---|
| Peel Hotels ($PHO) | 16.4% | 19.4% | 19.1% | 17.5% | 15.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Irish Continental Group ($ICGC) | 27.3% | 23.6% | 25.7% | 32.8% | |
| Ryanair Hldgs ($RYA) | 20.1% | 25.1% | 28.9% | 30.6% | 31.2% |
| Dalata Hotel Group ($DAL) | 7.7% | 20.8% | 24.5% | 29.5% | |
| Heavitree Brewery ($HVT) | 22.7% | 23.7% | 25.0% | 27.8% | |
| Paddy Power ($PAP) | 29.8% | 20.4% | 17.0% | 26.7% | |
| |
|---|
| Median (26 companies) | 12.3% | 12.5% | 17.0% | 17.6% | 16.3% |
|---|
| Peel Hotels ($PHO) | 12.8% | 15.0% | 15.1% | 12.4% | 11.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Easyhotel ($EZH) | 209.8% | 46.8% | 153.2% | 269.8% | |
| Action Hotels ($AHCG) | 90.0% | 172.4% | 120.1% | 139.5% | |
| Dalata Hotel Group ($DAL) | 26.7% | 12.7% | 37.4% | 39.0% | |
| Everyman Media Group ($EMAN) | 25.9% | 56.4% | 64.2% | 38.4% | |
| Richoux Group ($RIC) | 14.3% | 10.0% | 17.0% | 34.3% | |
| |
|---|
| Median (26 companies) | 5.4% | 7.2% | 14.1% | 7.4% | 12.2% |
|---|
| Peel Hotels ($PHO) | 3.3% | 3.7% | 4.1% | 4.2% | 4.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Intercontinental Hotels Group ($IHG) | 56.3% | 96.6% | 51.2% | 92.2% | |
| Irish Continental Group ($ICGC) | 40.0% | 33.9% | 30.1% | 35.4% | |
| Air Partner ($AIP) | 21.2% | 20.0% | 20.4% | 24.6% | 34.6% |
| Ryanair Hldgs ($RYA) | 9.5% | 13.3% | 17.2% | 17.7% | 18.4% |
| Hanatour Service Inc ($TOUR) | 19.6% | 19.4% | 8.6% | 15.7% | |
| |
|---|
| Median (27 companies) | 5.3% | 6.3% | 6.3% | 7.1% | 8.1% |
|---|
| Peel Hotels ($PHO) | 2.6% | 4.1% | 4.4% | 3.6% | -0.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Action Hotels ($AHCG) | 9.6x | 12.3x | 14.4x | 23.9x | |
| Marston'S ($MARS) | 14.0x | 8.2x | 6.2x | 6.9x | 8.7x |
| Rotala ($ROL) | 2.8x | 3.6x | 3.6x | 3.9x | |
| Heavitree Brewery ($HVT) | 2.9x | 4.6x | 4.1x | 3.7x | |
| Fuller Smith & Turner ($BA80) | 2.7x | 2.8x | 3.2x | 3.1x | 3.0x |
| |
|---|
| Median (23 companies) | 1.1x | 0.8x | 1.9x | 2.0x | 2.2x |
|---|
| Peel Hotels ($PHO) | 5.9x | 4.4x | 3.9x | 0.4x | 4.3x |
