Easyhotel CAPEX surged on 104% and Revenue surged on 33.7%
06 Dec 2018 • About Easyhotel (
$EZH) • By InTwits
Easyhotel reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Easyhotel is a fast growth stock: FY2018 revenue growth was 33.7%, 5 year revenue CAGR was 33.6% at FY2018 ROIC 0.62%
- EBITDA Margin is quite volatile: 19.4% in FY2018, 18.0% in FY2017, 21.6% in FY2016, 21.7% in FY2015, 46.7% in FY2014
- Easyhotel has high CAPEX intensity: 5 year average CAPEX/Revenue was 218.3%. At the same time it's a lot of higher than industry average of 30.0%.
- CAPEX is quite volatile: £46m in FY2018, £23m in FY2017, £9m in FY2016, £3m in FY2015, £7m in FY2014
- The company has potentially unprofitable business model: ROIC is 0.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Easyhotel's Revenue surged on 33.7%. Having stable revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 25.2 pp from -416% to -390% in FY2018. During the last 5 years EBITDA Margin bottomed in FY2017 at 18.0%.
Gross Margin decreased on 7.8 pp from 61.3% to 53.5% in FY2018. Gross Margin followed a declining trend at -3.5 pp per annum in the last 5 years. SG&A as a % of Revenue decreased on 5.8 pp from 53.2% to 47.4% in FY2018.
Net Income margin decreased slightly on 1.9 pp from 7.6% to 5.7% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 412%. Easyhotel showed fast CAPEX/Revenue growth of 365 pp from 46.8% in FY2015 to 412% in FY2018. Average CAPEX/Revenue for the last three years was 278%. The company has spent a lot to CAPEX (2,121% of EBITDA) to fuel its growth. During the last 5 years CAPEX as a % of Revenue bottomed in FY2015 at 46.8% and was growing since that time.
Return on investment
The company operates at low ROIC (0.6%) and ROE (0.7%). ROIC showed almost no change in FY2018. ROE decreased slightly on 0.56 pp from 1.2% to 0.68% in FY2018. ROIC declined at -1.1 pp per annum in FY2014-FY2018.
Leverage (Debt)
Debt level is -11.4x Net Debt / EBITDA and 7.5x Debt / EBITDA. Debt jumped on 36.9% while cash jumped on 24.5%.
Easyhotel has no short term refinancing risk: cash is higher than short term debt (5,826.2%).
Valuation and dividends
Easyhotel's trades at EV/EBITDA 47.3x and P/E 198.5x.
Financial and operational results
FY ended 30 Sep 2018
Easyhotel ($EZH) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 3.544 | 5.541 | 6.024 | 8.416 | 11.254 | 33.7% |
| Gross Profit | 2.386 | 3.812 | 3.874 | 5.158 | 6.022 | 16.7% |
| SG&A | 1.703 | 2.881 | 2.832 | 4.478 | 5.338 | 19.2% |
| EBITDA | 1.655 | 1.200 | 1.298 | 1.512 | 2.186 | 44.6% |
| EBIT | | 0.813 | | | | |
| Interest expence | | 0.179 | | | | |
| Tax | | 0.178 | | | | |
| Net Income | 0.408 | 0.609 | 0.877 | 0.643 | 0.647 | 0.6% |
| Stock Based Compensation | | 0.030 | | | | |
Balance Sheet
|
|---|
| Cash | 24.264 | 22.636 | 13.659 | 33.255 | 41.390 | 24.5% |
| Short Term Debt | 0.000 | | 7.200 | 0.360 | 0.710 | 97.3% |
| Long Term Debt | 7.200 | 7.200 | 0.000 | 11.666 | 15.750 | 35.0% |
Cash flow
|
|---|
| Capex | 7.436 | 2.593 | 9.228 | 22.709 | 46.380 | 104.2% |
Ratios
|
|---|
| Revenue growth | 34.1% | 56.4% | 8.7% | 39.7% | 33.7% | |
| EBITDA growth | 1.3% | -27.5% | 8.2% | 16.5% | 44.6% | |
|
|---|
| Gross Margin | 67.3% | 68.8% | 64.3% | 61.3% | 53.5% | -7.8% |
| EBITDA Margin | 46.7% | 21.7% | 21.6% | 18.0% | 19.4% | 1.5% |
| EBIT Margin | | 14.7% | | | |
| SG&A, % of revenue | 48.0% | 52.0% | 47.0% | 53.2% | 47.4% | -5.8% |
| SBC, % of revenue | | 0.5% | | | |
| Net Income Margin | 11.5% | 11.0% | 14.6% | 7.6% | 5.7% | -1.9% |
| CAPEX, % of revenue | 209.8% | 46.8% | 153.2% | 269.8% | 412.1% | 142.3% |
|
|---|
| ROIC | 5.7% | 2.0% | 2.1% | 1.1% | 0.6% | -0.5% |
| ROE | 2.3% | 1.9% | 2.7% | 1.2% | 0.7% | -0.6% |
| Net Debt/EBITDA | -10.3x | -12.9x | -5.0x | -14.0x | -11.4x | 2.6x |
| Interest coverage ratio (ICR) | | 4.5x | | | |
| Interest expence / Average debt | | 2.5% | | | | |
People
|
|---|
| Insider ownership | | 0.7% | | | | |
| Employees | | 30 | | | | |
| Revenue/Employee, th. £ | | 185 | | | | |
Peers in Travel & Leisure
Below you can find Easyhotel 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) | | -21.1% | 1.8% | 74.3% | 12.1% |
| Webis Holdings ($WEB) | | 29.7% | 45.3% | 65.8% | 24.0% |
| Eclectic Bar Grp ($BAR) | | -1.9% | 1.4% | 38.6% | 1.2% |
| Everyman Media Group ($EMAN) | 22.4% | 44.1% | 45.5% | 37.4% | |
| |
|---|
| Median (26 companies) | 9.1% | 7.0% | 8.3% | 7.3% | 7.6% |
|---|
| Easyhotel ($EZH) | | 56.4% | 8.7% | 39.7% | 33.7% |
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% | 82.9% |
| Paddy Power ($PAP) | 81.0% | 74.7% | 76.9% | 76.8% | |
| Action Hotels ($AHCG) | 73.3% | 74.0% | 70.7% | 69.8% | |
| Nektan ($NKTN) | 57.6% | 42.6% | 67.9% | 64.1% | |
| |
|---|
| Median (17 companies) | 39.7% | 40.1% | 39.3% | 36.2% | 24.8% |
|---|
| Easyhotel ($EZH) | 67.3% | 68.8% | 64.3% | 61.3% | 53.5% |
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 ($PAP) | 29.8% | 20.4% | 17.0% | 26.7% | |
| |
|---|
| Median (26 companies) | 12.3% | 12.5% | 15.9% | 16.7% | 15.7% |
|---|
| Easyhotel ($EZH) | 46.7% | 21.7% | 21.6% | 18.0% | 19.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| 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% | |
| Ryanair Hldgs ($RYA) | 10.0% | 13.9% | 18.6% | 21.8% | 20.6% |
| |
|---|
| Median (26 companies) | 5.1% | 5.7% | 8.1% | 5.7% | 8.7% |
|---|
| Easyhotel ($EZH) | 209.8% | 46.8% | 153.2% | 269.8% | 412.1% |
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 ($TOUR) | 19.6% | 19.4% | 8.6% | 15.7% | |
| |
|---|
| Median (27 companies) | 4.8% | 6.3% | 6.3% | 7.1% | 8.1% |
|---|
| Easyhotel ($EZH) | 5.7% | 2.0% | 2.1% | 1.1% | 0.6% |
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 ($BA80) | 2.7x | 2.8x | 3.2x | 3.1x | 3.0x |
| |
|---|
| Median (23 companies) | 1.3x | 1.5x | 2.3x | 2.0x | 2.2x |
|---|
| Easyhotel ($EZH) | -10.3x | -12.9x | -5.0x | -14.0x | -11.4x |
