Local Shopping REIT CAPEX dropped on 63.4% and Revenue dropped on 43.9%
10 Dec 2018 • About Local Shopping REIT (
$LSR) • By InTwits
Local Shopping REIT reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Local Shopping REIT is a company in decline: FY2018 revenue growth was -43.9%, 5 years revenue CAGR was -25.4%
- Local Shopping REIT motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 was 0.0% while average EBITDA Margin was -0.1% for the sames years
- The company has unprofitable business model: ROIC is -14.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.9x while industry average is 3.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 43.9%.
Gross Margin dropped on 39.8 pp from 67.3% to 27.5% in FY2018. During FY2014-FY2018 Gross Margin topped in FY2015 at 74.4% and was declining since that time. SG&A as a % of Revenue jumped on 16.2 pp from 28.9% to 45.0% in FY2018. SG&A as a % of Revenue stuck to a growing trend at 6.6 pp per annum in FY2014-FY2018.
Net Income margin dropped on 197 pp from -14.2% to -212% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 5.6% in FY2018. Local Shopping REIT showed CAPEX/Revenue growth of 5.6 pp from in FY2015 to 5.6% in FY2018. For the last three years the average CAPEX/Revenue was 5.7%.
Return on investment
The company operates at negative ROIC (-14.0%) and ROE (-22.9%). ROIC dropped on 16.1 pp from 2.1% to -14.0% in FY2018. ROE dropped on 20.4 pp from -2.4% to -22.9% in FY2018. ROIC followed a declining trend in FY2014-FY2018.
Leverage (Debt)
The company paid down all the debt in FY2018. Cash dropped on 68.5%.
Financial and operational results
FY ended 30 Sep 2018
Local Shopping REIT ($LSR) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 13.851 | 7.664 | 6.989 | 6.023 | 3.381 | -43.9% |
| Gross Profit | 9.986 | 5.704 | 5.127 | 4.055 | 0.930 | -77.1% |
| SG&A | 2.152 | 1.699 | 1.710 | 1.738 | 1.522 | -12.4% |
| EBITDA | 6.506 | | | | -6.545 | |
| Interest expence | | 3.986 | | | | |
| Net Income | 1.206 | 0.020 | 0.631 | -0.858 | -7.154 | |
Balance Sheet
|
|---|
| Cash | 15.662 | 12.740 | 11.000 | 10.455 | 3.292 | -68.5% |
| Short Term Debt | 1.164 | 1.001 | 0.907 | 1.209 | 0.000 | -100.0% |
| Long Term Debt | 64.314 | 55.347 | 50.202 | 29.893 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 2.395 | | 0.210 | 0.514 | 0.188 | -63.4% |
Ratios
|
|---|
| Revenue growth | -5.4% | -44.7% | -8.8% | -13.8% | -43.9% | |
| EBITDA growth | -16.7% | | | | | |
|
|---|
| Gross Margin | 72.1% | 74.4% | 73.4% | 67.3% | 27.5% | -39.8% |
| EBITDA Margin | 47.0% | | | | -193.6% |
| SG&A, % of revenue | 15.5% | 22.2% | 24.5% | 28.9% | 45.0% | 16.2% |
| Net Income Margin | 8.7% | 0.3% | 9.0% | -14.2% | -211.6% | -197.3% |
| CAPEX, % of revenue | 17.3% | | 3.0% | 8.5% | 5.6% | -3.0% |
|
|---|
| ROIC | 4.8% | 2.5% | 2.4% | 2.1% | -14.0% | -16.1% |
| ROE | 3.5% | 0.1% | 1.8% | -2.4% | -22.9% | -20.4% |
| Net Debt/EBITDA | 7.7x | | | | |
| Interest expence / Average debt | | 6.5% | | | | |
People
|
|---|
| Insider ownership | | 29.3% | | | | |
Peers in Real Estate Investment Trusts
Below you can find Local Shopping REIT benchmarking vs. other companies in Real Estate Investment Trusts 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 |
|---|
| Great Portland Estates ($GPOR) | | -17.6% | 83.5% | -5.4% | 217.1% |
| Town Centre Securities ($50BF) | | 3.2% | 11.1% | 5.1% | 10.0% |
| Shaftesbury ($SHB) | | 8.2% | 7.6% | 5.0% | 9.5% |
| Green REIT ($GRN) | | 276.8% | 45.7% | 8.3% | 9.0% |
| Hibernia REIT ($HBRN) | | | 32.2% | 37.2% | 9.0% |
| |
|---|
| Median (7 companies) | 14.1% | 4.2% | 11.1% | 5.1% | 9.0% |
|---|
| Local Shopping REIT ($LSR) | | -44.7% | -8.8% | -13.8% | -43.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Mucklow(A.& J.)Group ($MKLW) | 210.6% | 277.1% | 121.8% | 130.8% | 274.1% |
| Hibernia REIT ($HBRN) | | | 428.5% | 277.6% | 231.8% |
| Shaftesbury ($SHB) | 498.6% | 503.7% | 168.3% | 273.6% | 166.7% |
| British Land Co ($BA45) | 218.5% | 215.1% | 165.3% | 36.3% | 87.6% |
| Town Centre Securities ($50BF) | 150.0% | 119.7% | 70.6% | 49.3% | 73.5% |
| |
|---|
| Median (6 companies) | 210.6% | 242.1% | 153.2% | 130.8% | 127.2% |
|---|
| Local Shopping REIT ($LSR) | 47.0% | | | | -193.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Hibernia REIT ($HBRN) | | 1,795.1% | 634.9% | 304.9% | 191.3% |
| Shaftesbury ($SHB) | 117.5% | 51.6% | 83.7% | 61.2% | 148.3% |
| British Land Co ($BA45) | 186.5% | 59.2% | 84.6% | 53.0% | 55.6% |
| Great Portland Estates ($GPOR) | 0.0% | 0.0% | 284.0% | 153.7% | 33.3% |
| Mucklow(A.& J.)Group ($MKLW) | 0.0% | 0.0% | 17.2% | 46.2% | 25.5% |
| |
|---|
| Median (7 companies) | 88.5% | 59.2% | 84.6% | 82.3% | 33.3% |
|---|
| Local Shopping REIT ($LSR) | 17.3% | | 3.0% | 8.5% | 5.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Mucklow(A.& J.)Group ($MKLW) | 15.9% | 18.5% | 8.2% | 8.7% | 16.9% |
| Green REIT ($GRN) | | 14.6% | 12.3% | 9.8% | 10.5% |
| Hibernia REIT ($HBRN) | | 2.1% | 16.3% | 11.6% | 9.0% |
| Town Centre Securities ($50BF) | 11.2% | 8.3% | 5.0% | 3.4% | 5.7% |
| Shaftesbury ($SHB) | 20.7% | 18.4% | 5.8% | 9.0% | 5.4% |
| |
|---|
| Median (7 companies) | 12.6% | 12.0% | 7.5% | 9.0% | 5.7% |
|---|
| Local Shopping REIT ($LSR) | 4.8% | 2.5% | 2.4% | 2.1% | -14.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Town Centre Securities ($50BF) | 4.6x | 6.2x | 9.8x | 13.6x | 8.4x |
| British Land Co ($BA45) | 3.6x | 3.2x | 3.7x | 14.8x | 5.4x |
| Shaftesbury ($SHB) | 1.2x | 1.3x | 4.7x | 3.0x | 4.1x |
| Hibernia REIT ($HBRN) | | | 0.4x | 1.2x | 1.7x |
| Mucklow(A.& J.)Group ($MKLW) | 1.5x | 1.2x | 2.4x | 2.4x | 1.0x |
| |
|---|
| Median (6 companies) | 3.1x | 3.0x | 3.9x | 2.7x | 2.9x |
|---|
