Real Good Food revenue jumped on 20.5% while EBITDA Margin dropped on 11.3 pp from -2.6% to -13.9%
28 Sep 2018 • About Real Good Food (
$RGD) • By InTwits
Real Good Food reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -13.9%
- Real Good Food motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 was 0.0% while average EBITDA Margin was -1.1% for the sames years
- Real Good Food has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's in pair with industry average of 6.5%
- CAPEX is quite volatile: £11m in FY2018, £11m in FY2017, £6m in FY2016, £1m in FY2015, £7m in FY2014
- The company has unprofitable business model: ROIC is -22.8%
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 jumped on 20.5%. Revenue decline was slowing down on average by 17.0 pp per annum in FY2014-FY2018. 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. EBITDA Margin stuck to a declining trend at -4.6 pp per annum in the last 5 years.
Gross Margin decreased on 5.3 pp from 24.4% to 19.2% in FY2018. During the last 5 years Gross Margin topped in FY2016 at 26.6% and was declining since that time. SG&A as a % of Revenue decreased slightly on 0.59 pp from 25.7% to 25.1% in FY2018. SG&A as a % of Revenue followed a growing trend at 2.0 pp per annum in FY2014-FY2018.
Net Income margin dropped on 15.3 pp from -5.5% to -20.9% in FY2018.
Investments (CAPEX, working capital and M&A)
Real Good Food's CAPEX/Revenue was 8.4% in FY2018. The company's CAPEX/Revenue increased on 7.1 pp from 1.4% in FY2015 to 8.4% in FY2018. For the last three years the average CAPEX/Revenue was 8.3%.
Return on investment
The company operates at negative ROIC (-22.8%) and ROE (-37.7%). ROIC dropped on 17.4 pp from -5.4% to -22.8% in FY2018. ROE dropped on 31.1 pp from -6.6% to -37.7% in FY2018. During FY2014-FY2018 ROIC topped in FY2015 at 2.3% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.7x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2018. Debt surged on 143% while cash surged on 489%.
Real Good Food has short term refinancing risk: cash is only 11.3% of short term debt.
Financial and operational results
FY ended 31 Mar 2018
Real Good Food ($RGD) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 110.2 | 104.6 | 100.4 | 107.7 | 129.8 | 20.5% |
| Gross Profit | 22.0 | 25.6 | 26.7 | 26.3 | 24.9 | -5.4% |
| SG&A | 19.3 | 22.4 | 23.6 | 27.7 | 32.6 | 17.8% |
| EBITDA | 5.5 | 5.5 | 3.8 | -2.8 | -18.0 | |
| Net Income | -0.7 | -3.4 | 12.8 | -6.0 | -27.1 | |
Balance Sheet
|
|---|
| Cash | 8.6 | 6.7 | 2.9 | 0.5 | 2.7 | 488.6% |
| Short Term Debt | 31.7 | 17.4 | 8.0 | 12.0 | 24.2 | 101.4% |
| Long Term Debt | 8.5 | 6.7 | 0.1 | 4.7 | 16.4 | 248.6% |
Cash flow
|
|---|
| Capex | 6.9 | 1.4 | 6.4 | 10.8 | 11.0 | 1.3% |
Ratios
|
|---|
| Revenue growth | -58.5% | -5.1% | -4.0% | 7.3% | 20.5% | |
| EBITDA growth | -45.4% | -1.2% | -30.6% | -173.9% | 545.8% | |
|
|---|
| Gross Margin | 19.9% | 24.4% | 26.6% | 24.4% | 19.2% | -5.3% |
| EBITDA Margin | 5.0% | 5.2% | 3.8% | -2.6% | -13.9% | -11.3% |
| SG&A, % of revenue | 17.5% | 21.4% | 23.5% | 25.7% | 25.1% | -0.6% |
| Net Income Margin | -0.6% | -3.3% | 12.8% | -5.5% | -20.9% | -15.3% |
| CAPEX, % of revenue | 6.3% | 1.4% | 6.4% | 10.0% | 8.4% | -1.6% |
|
|---|
| ROIC | 2.3% | 2.3% | 1.7% | -5.4% | -22.8% | -17.4% |
| ROE | -0.8% | -4.0% | 14.5% | -6.6% | -37.7% | -31.1% |
| Net Debt/EBITDA | 5.7x | 3.2x | 1.3x | | |
Peers in Food Producers
Below we provide Real Good Food benchmarking against other companies in Food Producers 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 |
|---|
| Ukrproduct Group ($UKR) | -38.9% | -36.8% | 0.2% | 51.2% | |
| Narborough Plantations ($NBP) | | 3.5% | 0.5% | 38.2% | |
| R.E.A.Hldgs ($RE.B) | 13.9% | -28.1% | -12.4% | 26.5% | |
| Tate & Lyle ($BD15) | | -15.0% | 0.6% | 16.9% | -1.6% |
| Mhp Sa ($MHPC) | | -14.2% | -4.0% | 13.4% | |
| |
|---|
| Median (19 companies) | 0.0% | 1.3% | 0.6% | 7.0% | -1.6% |
|---|
| Real Good Food ($RGD) | | -5.1% | -4.0% | 7.3% | 20.5% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Narborough Plantations ($NBP) | 59.7% | 54.6% | 56.1% | 63.0% | |
| Walcom Group Ltd ($WALG) | 62.2% | 60.5% | 58.8% | 54.6% | |
| Kakuzi ($KAKU) | 33.0% | 49.2% | 46.4% | 44.7% | |
| Unilever ($ULVR) | 41.4% | 42.2% | 42.7% | 43.1% | |
| Produce Investments ($PIL) | 33.5% | 36.4% | 37.9% | 35.7% | |
| |
|---|
| Median (17 companies) | 32.7% | 24.9% | 24.3% | 26.0% | 14.6% |
|---|
| Real Good Food ($RGD) | 19.9% | 24.4% | 26.6% | 24.4% | 19.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Narborough Plantations ($NBP) | 39.6% | 37.4% | 40.8% | 48.6% | |
| Mhp Sa ($MHPC) | 37.0% | 38.8% | 37.0% | 35.3% | |
| Kakuzi ($KAKU) | 11.8% | 29.4% | 31.8% | 32.7% | |
| R.E.A.Hldgs ($RE.B) | 33.2% | 31.1% | 22.9% | 20.7% | |
| Unilever ($ULVR) | 19.4% | 16.8% | 18.0% | 19.8% | |
| |
|---|
| Median (19 companies) | 11.8% | 13.8% | 11.2% | 13.7% | 10.7% |
|---|
| Real Good Food ($RGD) | 5.0% | 5.2% | 3.8% | -2.6% | -13.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| R.E.A.Hldgs ($RE.B) | 11.8% | 17.4% | 39.3% | 32.8% | |
| Ros Agro ($AGRO) | 7.3% | 15.3% | 19.7% | 21.9% | |
| Cherkizovo Group OJSC ($CHE) | 9.7% | 12.2% | 10.4% | 10.9% | |
| Kakuzi ($KAKU) | 22.0% | 24.9% | 13.7% | 10.3% | |
| Mhp Sa ($MHPC) | 8.2% | 12.3% | 8.1% | 7.9% | |
| |
|---|
| Median (19 companies) | 4.1% | 5.0% | 3.5% | 4.6% | 2.7% |
|---|
| Real Good Food ($RGD) | 6.3% | 1.4% | 6.4% | 10.0% | 8.4% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Unilever ($ULVR) | 29.9% | 26.0% | 24.3% | 24.6% | |
| Mhp Sa ($MHPC) | 17.6% | 17.6% | 16.1% | 17.6% | |
| Kakuzi ($KAKU) | 4.3% | 17.4% | 15.8% | 15.6% | |
| Tate & Lyle ($BD15) | 13.2% | 1.8% | 7.2% | 12.1% | 14.4% |
| Kerry Group ($KYGA) | 16.6% | 15.8% | 12.8% | 11.9% | |
| |
|---|
| Median (20 companies) | 12.4% | 9.7% | 8.1% | 9.1% | 10.6% |
|---|
| Real Good Food ($RGD) | 2.3% | 2.3% | 1.7% | -5.4% | -22.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Avangardco Investments Public Ltd ($AVGR) | 1.7x | | 241.4x | 29.9x | |
| R.E.A.Hldgs ($RE.B) | 3.9x | 7.2x | 10.6x | 10.8x | |
| Ukrproduct Group ($UKR) | 3.4x | | 17.7x | 6.2x | |
| Zambeef Products ($ZAM) | 4.8x | 3.0x | 2.1x | 4.0x | |
| Ros Agro ($AGRO) | 0.6x | 1.8x | 1.9x | 3.7x | |
| |
|---|
| Median (18 companies) | 1.4x | 1.6x | 1.8x | 1.9x | 0.9x |
|---|
