Shoe Zone Net Income jumped on 20.7% and EBITDA Margin increased slightly on 0.95 pp from 8.1% to 9.0%
09 Jan 2019 • About Shoe Zone (
$SHOE) • By InTwits
Shoe Zone reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 9.0% in FY2018 vs. 8.1% in FY2017 vs. 9.3% in FY2014
- Shoe Zone has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 30.5%
- CAPEX is quite volatile: £5m in FY2018, £5m in FY2017, £3m in FY2016, £2m in FY2015, £2m in FY2014
- The company has highly profitable business model: ROIC is 31.7%
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 1.8%. Revenue decline was slowing down on average by 2.7 pp per annum in FY2014-FY2018. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.1 pp from 13.9% to 12.8% in FY2018.
Gross Margin showed almost no change in FY2018. Gross Margin grew at 0.77 pp per annum in the last 5 years. SG&A as a % of Revenue decreased slightly on 0.98 pp from 12.9% to 11.9% in FY2018. SG&A as a % of Revenue grew at 1.6 pp per annum in FY2014-FY2018.
Net Income margin increased slightly on 0.93 pp from 5.0% to 5.9% in FY2018. The efficient tax rate was 15.4% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 Shoe Zone had CAPEX/Revenue of 3.2%. Shoe Zone showed CAPEX/Revenue growth of 2.0 pp from 1.1% in FY2015 to 3.2% in FY2018. For the last three years the average CAPEX/Revenue was 2.8%. CAPEX as a % of Revenue grew at 0.61 pp per annum in FY2014-FY2018.
Return on investment
The company operates at high and attractive ROIC (31.7%) and ROE (27.4%). ROIC increased slightly on 0.97 pp from 30.7% to 31.7% in FY2018. ROE increased slightly on 1.5 pp from 25.9% to 27.4% in FY2018. During the last 5 years ROIC bottomed in FY2015 at 30.0% and was growing since that time. During the last 5 years ROE bottomed in FY2015 at 23.8% and was growing since that time.
Leverage (Debt)
The company has no debt. Cash jumped on 33.1%.
Valuation and dividends
The company's trades at EV/EBITDA 6.4x and P/E 11.5x.
The company paid 52.5% of Net Income as dividends in FY2018.
Management team
50.7% of the company is owned by insiders.
The company has 3,489 employees. Average revenue per employee in FY2018 was £46,035.
Financial and operational results
FY ended 29 Sep 2018
Shoe Zone ($SHOE) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 172.9 | 166.8 | 159.8 | 157.8 | 160.6 | 1.8% |
| Gross Profit | 28.6 | 27.3 | 27.8 | 30.1 | 30.5 | 1.4% |
| SG&A | 11.8 | 10.9 | 17.4 | 20.3 | 19.1 | -5.9% |
| EBITDA | 16.0 | 14.0 | 13.5 | 12.8 | 14.5 | 13.7% |
| EBIT | | | | | 11.4 | |
| Interest expence | | | | | 0.2 | |
| Tax | | | | | 1.7 | |
| Net Income | 8.0 | 8.1 | 8.5 | 7.9 | 9.5 | 20.7% |
Balance Sheet
|
|---|
| Cash | 9.1 | 14.2 | 15.0 | 11.8 | 15.7 | 33.1% |
| Inventory | | | | | 27.8 | |
| Short Term Debt | 0.0 | | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 2.0 | 1.9 | 3.2 | 5.1 | 5.1 | -0.8% |
| Dividends | | | | | 5.0 | |
Ratios
|
|---|
| Revenue growth | -10.8% | -3.5% | -4.2% | -1.3% | 1.8% | |
| EBITDA growth | 31.4% | -12.7% | -3.3% | -5.8% | 13.7% | |
|
|---|
| Gross Margin | 16.5% | 16.4% | 17.4% | 19.1% | 19.0% | -0.1% |
| EBITDA Margin | 9.3% | 8.4% | 8.5% | 8.1% | 9.0% | 0.9% |
| EBIT Margin | | | | | 7.1% |
| SG&A, % of revenue | 6.8% | 6.6% | 10.9% | 12.9% | 11.9% | -1.0% |
| Net Income Margin | 4.7% | 4.9% | 5.3% | 5.0% | 5.9% | 0.9% |
| CAPEX, % of revenue | 1.2% | 1.1% | 2.0% | 3.3% | 3.2% | -0.1% |
|
|---|
| ROIC | 34.2% | 30.0% | 30.6% | 30.7% | 31.7% | 1.0% |
| ROE | 24.8% | 23.8% | 25.6% | 25.9% | 27.4% | 1.5% |
| Net Debt/EBITDA | -0.6x | -1.0x | -1.1x | -0.9x | -1.1x | -0.2x |
People
|
|---|
| Insider ownership | | | | | 50.7% | |
| Employees | | | | | 3,489 | |
| Revenue/Employee, th. £ | | | | | 46 | |
Peers in General Retailers
Below we provide Shoe Zone 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% | |
| 7Digital Group ($7DIG) | 171.6% | 1.5% | 14.8% | 41.2% | |
| AO World ($AO.) | | 23.8% | 25.7% | 17.0% | 13.6% |
| Mysale Group ($MYSL) | | 5.1% | 7.0% | 6.4% | 8.9% |
| Aa ($AA.) | | 1.0% | -5.0% | -0.2% | 2.9% |
| |
|---|
| Median (11 companies) | -0.4% | 4.4% | 6.1% | -0.8% | 1.5% |
|---|
| Shoe Zone ($SHOE) | | -3.5% | -4.2% | -1.3% | 1.8% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Just Eat ($JE.) | 89.7% | 90.2% | 90.6% | 82.4% | |
| 7Digital Group ($7DIG) | 59.0% | 68.1% | 71.0% | 71.6% | |
| Aa ($AA.) | 64.7% | 64.8% | 64.0% | 63.5% | 62.5% |
| United Carpets Group ($UCG) | 61.7% | 64.3% | 63.8% | 61.2% | 61.5% |
| French Connection Group ($FCCN) | 47.6% | 46.7% | 46.3% | 45.8% | 45.2% |
| |
|---|
| Median (11 companies) | 34.6% | 36.2% | 37.3% | 42.0% | 37.5% |
|---|
| Shoe Zone ($SHOE) | 16.5% | 16.4% | 17.4% | 19.1% | 19.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 42.2% | 37.9% | 37.4% | 37.6% | 39.4% |
| Signet Jewelers Ltd ($SIG) | 16.2% | 12.7% | 13.4% | 14.9% | 12.5% |
| United Carpets Group ($UCG) | 4.8% | 6.6% | 7.9% | 8.2% | 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% | 1.8% |
| |
|---|
| Median (11 companies) | 4.1% | 6.6% | 1.8% | 1.9% | 1.7% |
|---|
| Shoe Zone ($SHOE) | 9.3% | 8.4% | 8.5% | 8.1% | 9.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| 7Digital Group ($7DIG) | 3.4% | 8.2% | 3.8% | 27.2% | |
| Aa ($AA.) | 1.0% | 3.8% | 8.0% | 7.6% | 6.6% |
| 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% | 3.8% |
| Just Eat ($JE.) | 3.4% | 2.3% | 2.5% | 2.7% | |
| |
|---|
| Median (11 companies) | 1.5% | 2.3% | 1.6% | 2.2% | 1.9% |
|---|
| Shoe Zone ($SHOE) | 1.2% | 1.1% | 2.0% | 3.3% | 3.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 61.1% | 34.9% | 32.0% | 30.8% | 32.3% |
| United Carpets Group ($UCG) | | 36.7% | 37.1% | 33.7% | 29.9% |
| Signet Jewelers Ltd ($SIG) | 20.4% | 15.5% | 15.2% | 16.0% | 13.0% |
| Caffyns ($78GL) | 11.1% | 37.3% | 10.4% | 7.1% | 5.5% |
| Mysale Group ($MYSL) | 10.0% | -19.0% | 0.3% | -0.0% | -1.9% |
| |
|---|
| Median (10 companies) | 6.9% | 9.1% | 1.3% | -0.0% | 1.8% |
|---|
| Shoe Zone ($SHOE) | 34.2% | 30.0% | 30.6% | 30.7% | 31.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aa ($AA.) | 7.7x | 7.9x | 8.0x | 7.6x | 7.0x |
| Caffyns ($78GL) | 3.0x | 0.7x | 2.2x | 2.2x | 4.0x |
| Mysale Group ($MYSL) | -14.4x | | -6.0x | -1.7x | 1.2x |
| Signet Jewelers Ltd ($SIG) | -0.3x | 1.7x | 1.4x | 1.4x | 0.6x |
| United Carpets Group ($UCG) | -1.7x | -1.9x | -0.9x | -1.5x | -1.5x |
| |
|---|
| Median (5 companies) | -0.6x | -0.4x | 1.4x | 1.8x | 1.2x |
|---|
| Shoe Zone ($SHOE) | -0.6x | -1.0x | -1.1x | -0.9x | -1.1x |
