Heavitree Brewery Net Income surged on 45.1% while EBITDA Margin decreased on 3.2 pp from 27.8% to 24.5%
13 Feb 2019 • About Heavitree Brewery (
$HVT) • By InTwits
Heavitree Brewery reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Heavitree Brewery has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.3%. At the same time it's in pair with industry average of 2.4%
- CAPEX is quite volatile: £1m in FY2018, £1m in FY2017, £1m in FY2016, £3m in FY2015, £1m in FY2014
- The company has business model with low profitability: ROIC is 8.7%
- It operates with high leverage: Net Debt/EBITDA is 3.7x while industry average is 1.7x
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 on 4.3%. Revenue decline was slowing down on average by 1.3 pp per annum in FY2014-FY2018. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 3.2 pp from 27.8% to 24.5% in FY2018. During the last 5 years EBITDA Margin topped in FY2017 at 27.8%.
Net Income margin increased on 7.1 pp from 18.2% to 25.3% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 10.2% in FY2018. CAPEX/Revenue dropped on 33.9 pp from 44.1% in FY2015 to 10.2% in FY2018. Average CAPEX/Revenue for the last three years was 14.4%. During the last 5 years CAPEX as a % of Revenue topped in FY2015 at 44.1% and was declining since that time.
Return on investment
The company operates at good ROE (17.5%) while ROIC is low (8.7%). ROIC decreased slightly on 1.5 pp from 10.3% to 8.7% in FY2018. ROE increased on 3.8 pp from 13.7% to 17.5% in FY2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.7x and Debt / EBITDA is 3.7x. Net Debt / EBITDA decreased on 0.1x from 3.7x to 3.7x in FY2018. Debt dropped on 10.1% while cash dropped on 21.4%. During FY2014-FY2018 Net Debt/EBITDA topped in FY2015 at 4.6x and was declining since that time.
Heavitree Brewery has short term refinancing risk: cash is only 5.5% of short term debt.
Valuation and dividends
Heavitree Brewery's trades at EV/EBITDA 7.4x and P/E 3.6x.
Financial and operational results
FY ended 31 Oct 2018
Heavitree Brewery ($HVT) key annual financial indicators| mln. £ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 7.198 | 7.082 | 7.155 | 7.299 | 7.614 | 4.3% |
| Gross Profit | 4.071 | 4.096 | 4.200 | | | |
| EBITDA | 1.631 | 1.677 | 1.791 | 2.026 | 1.867 | -7.8% |
| EBIT | | 1.412 | | | | |
| Interest expence | | 0.170 | | | | |
| Tax | | 0.258 | | | | |
| Net Income | 1.381 | 0.915 | 1.365 | 1.328 | 1.927 | 45.1% |
Balance Sheet
|
|---|
| Cash | 0.112 | 0.051 | 0.057 | 0.056 | 0.044 | -21.4% |
| Inventory | | 0.010 | | | | |
| Short Term Debt | 4.834 | 1.753 | 1.327 | 1.592 | 0.801 | -49.7% |
| Long Term Debt | 0.011 | 6.011 | 6.057 | 6.045 | 6.067 | 0.4% |
Cash flow
|
|---|
| Capex | 0.649 | 3.124 | 1.275 | 1.117 | 0.777 | -30.4% |
| Dividends | | 0.000 | | | | |
Ratios
|
|---|
| Revenue growth | -0.5% | -1.6% | 1.0% | 2.0% | 4.3% | |
| EBITDA growth | 2.9% | 2.8% | 6.8% | 13.1% | -7.8% | |
|
|---|
| Gross Margin | 56.6% | 57.8% | 58.7% | | | |
| EBITDA Margin | 22.7% | 23.7% | 25.0% | 27.8% | 24.5% | -3.2% |
| EBIT Margin | | 19.9% | | | |
| Net Income Margin | 19.2% | 12.9% | 19.1% | 18.2% | 25.3% | 7.1% |
| CAPEX, % of revenue | 9.0% | 44.1% | 17.8% | 15.3% | 10.2% | -5.1% |
|
|---|
| ROIC | 9.8% | 9.2% | 8.5% | 10.3% | 8.7% | -1.5% |
| ROE | 15.7% | 10.1% | 15.1% | 13.7% | 17.5% | 3.8% |
| Net Debt/EBITDA | 2.9x | 4.6x | 4.1x | 3.7x | 3.7x | -0.1x |
| Interest coverage ratio (ICR) | | 8.3x | | | |
| Interest expence / Average debt | | 2.7% | | | | |
People
|
|---|
| Insider ownership | | 18.2% | | | | |
| Employees | | 13 | | | | |
| Revenue/Employee, th. £ | | 545 | | | | |
Peers in Travel & Leisure
Below we provide Heavitree Brewery benchmarking against other companies in Travel & Leisure 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 |
|---|
| Nektan ($NKTN) | | -71.7% | 995.3% | 129.1% | 50.1% |
| Celtic ($CCP) | | -21.1% | 1.8% | 74.3% | 12.1% |
| Webis Holdings ($WEB) | | 29.7% | 45.3% | 65.8% | 24.0% |
| Easyhotel ($EZH) | | 56.4% | 8.7% | 39.7% | 33.7% |
| Eclectic Bar Grp ($BAR) | | -1.9% | 1.4% | 38.6% | 1.2% |
| |
|---|
| Median (26 companies) | 9.4% | 7.6% | 8.7% | 7.9% | 9.8% |
|---|
| Heavitree Brewery ($HVT) | | -1.6% | 1.0% | 2.0% | 4.3% |
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 ($NKTN) | 57.6% | 42.6% | 67.9% | 64.1% | 62.2% |
| |
|---|
| Median (18 companies) | 39.7% | 40.1% | 39.3% | 38.1% | 41.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Irish Continental Group ($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% | |
| Paddy Power ($PAP) | 29.8% | 20.4% | 17.0% | 26.7% | |
| Carnival ($CCL) | 21.5% | 26.7% | 29.3% | 26.6% | 28.3% |
| |
|---|
| Median (26 companies) | 12.3% | 12.5% | 15.9% | 16.7% | 15.2% |
|---|
| Heavitree Brewery ($HVT) | 22.7% | 23.7% | 25.0% | 27.8% | 24.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Easyhotel ($EZH) | 209.8% | 46.8% | 153.2% | 269.8% | 412.1% |
| 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) | 5.1% | 5.7% | 8.1% | 5.7% | 6.8% |
|---|
| Heavitree Brewery ($HVT) | 9.0% | 44.1% | 17.8% | 15.3% | 10.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Intercontinental Hotels Group ($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% | 7.6% |
| |
|---|
| Median (27 companies) | 4.8% | 5.9% | 5.3% | 6.5% | 8.1% |
|---|
| Heavitree Brewery ($HVT) | 9.8% | 9.2% | 8.5% | 10.3% | 8.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Action Hotels ($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 | |
| Fuller Smith & Turner ($BA80) | 2.7x | 2.8x | 3.2x | 3.1x | 3.0x |
| Mandarin Oriental International ($MDOB) | 2.5x | 0.8x | 2.3x | 2.6x | |
| |
|---|
| Median (23 companies) | 1.1x | 0.8x | 1.9x | 1.9x | 1.4x |
|---|
| Heavitree Brewery ($HVT) | 2.9x | 4.6x | 4.1x | 3.7x | 3.7x |
