Easyhotel Net Income dropped on 685% and EBITDA Margin decreased on 5.9 pp from 19.4% to 13.5%
24 Jan 2020 • About Easyhotel (
$EZH) • By InTwits
Easyhotel reported FY2019 financial results today. Here are the key drivers of the company's long term financial model:
- Easyhotel is a fast growth stock: FY2019 revenue growth was 56.0%, 5 year revenue CAGR was 37.7% at FY2019 ROIC -2.5%
- Easyhotel has high CAPEX intensity: 5 year average CAPEX/Revenue was 204.9%. At the same time it's a lot of higher than industry average of 19.9%.
- CAPEX is quite volatile: £25m in FY2019, £46m in FY2018, £23m in FY2017, £9m in FY2016, £3m in FY2015
- The company has unprofitable business model: ROIC is -2.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.5x while industry average is 2.3x
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 jumped on 56.0%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.9 pp from 24.5% to 27.4% in FY2019. EBITDA Margin declined at -1.8 pp per annum in the last 5 years.
Gross Margin decreased on 5.4 pp from 53.5% to 48.1% in FY2019. Gross Margin stuck to a declining trend at -5.2 pp per annum in FY2015-FY2019. SG&A as a % of Revenue jumped on 20.1 pp from 47.4% to 67.5% in FY2019.
Net Income margin dropped on 27.3 pp from 5.7% to -21.5% in FY2019. During FY2015-FY2019 Net Income margin topped in FY2016 at 14.6% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2019 the company had CAPEX/Revenue of 143%. Easyhotel showed big decline in CAPEX/Revenue of 10.7 pp from 153% in FY2016 to 143% in FY2019. Average CAPEX/Revenue for the last three years was 275%. To fuel its fast growth Easyhotel made large investments to CAPEX (1,052% of EBITDA). During the last 5 years CAPEX as a % of Revenue topped in FY2018 at 412%.
Return on investment
The company operates at negative ROIC (-2.5%) and ROE (-3.2%). ROIC decreased on 3.2 pp from 0.62% to -2.5% in FY2019. ROE decreased on 3.9 pp from 0.68% to -3.2% in FY2019. ROIC declined at -1.1 pp per annum in FY2015-FY2019. During the last 5 years ROE topped in FY2016 at 2.7% and was declining since that time.
Leverage (Debt)
Debt level is 2.5x Net Debt / EBITDA and 7.4x Debt / EBITDA. Net Debt / EBITDA surged on 13.9x from -11.4x to 2.5x in FY2019. Debt increased on 6.8% while cash dropped on 71.7%.
Easyhotel has no short term refinancing risk: cash is higher than short term debt (1,396.6%).
Financial and operational results
FY ended 30 Nov -0001
Easyhotel ($EZH) key annual financial indicators| mln. £ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 5.541 | 6.024 | 8.416 | 11.254 | 17.556 | 56.0% |
| Gross Profit | 3.812 | 3.874 | 5.158 | 6.022 | 8.439 | 40.1% |
| SG&A | 2.881 | 2.832 | 4.478 | 5.338 | 11.855 | 122.1% |
| EBITDA | 1.200 | 1.298 | 1.512 | 2.186 | 2.378 | 8.8% |
| EBIT | 0.813 | | | | | |
| Interest expence | 0.179 | | | | | |
| Tax | 0.178 | | | | | |
| Net Income | 0.609 | 0.877 | 0.643 | 0.647 | -3.780 | -684.7% |
| Stock Based Compensation | 0.030 | | | | | |
Balance Sheet
|
|---|
| Cash | 22.636 | 13.659 | 33.255 | 41.390 | 11.715 | -71.7% |
| Short Term Debt | | 7.200 | 0.360 | 0.710 | 0.839 | 18.1% |
| Long Term Debt | 7.200 | 0.000 | 11.666 | 15.750 | 16.734 | 6.3% |
Cash flow
|
|---|
| Capex | 2.593 | 9.228 | 22.709 | 46.380 | 25.018 | -46.1% |
Ratios
|
|---|
| Revenue growth | 56.4% | 8.7% | 39.7% | 33.7% | 56.0% | |
| EBITDA growth | -27.5% | 8.2% | 16.5% | 44.6% | 8.8% | |
|
|---|
| Gross Margin | 68.8% | 64.3% | 61.3% | 53.5% | 48.1% | -5.4% |
| EBITDA Margin | 21.7% | 21.6% | 18.0% | 19.4% | 13.5% | -5.9% |
| EBIT Margin | 14.7% | | | | |
| SG&A, % of revenue | 52.0% | 47.0% | 53.2% | 47.4% | 67.5% | 20.1% |
| SBC, % of revenue | 0.5% | | | | |
| Net Income Margin | 11.0% | 14.6% | 7.6% | 5.7% | -21.5% | -27.3% |
| CAPEX, % of revenue | 46.8% | 153.2% | 269.8% | 412.1% | 142.5% | -269.6% |
|
|---|
| ROIC | 2.0% | 2.1% | 1.1% | 0.6% | -2.5% | -3.2% |
| ROE | 1.9% | 2.7% | 1.2% | 0.7% | -3.2% | -3.9% |
| Net Debt/EBITDA | -12.9x | -5.0x | -14.0x | -11.4x | 2.5x | 13.9x |
| 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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Nektan ($NKTN) | -71.7% | 995.3% | 129.1% | 50.1% | |
| Webis Holdings ($WEB) | 29.7% | 45.3% | 65.8% | 24.0% | |
| Hanatour Service Inc ($TOUR) | 19.2% | 29.6% | 14.6% | 21.4% | |
| Meikles Ltd ($MIK) | 7.6% | 9.7% | 0.9% | 16.9% | |
| Marston'S ($MARS) | 7.8% | 6.7% | 7.9% | 12.9% | |
| |
|---|
| Median (17 companies) | 7.3% | 8.3% | 7.3% | 7.6% | 2.5% |
|---|
| Easyhotel ($EZH) | | 8.7% | 39.7% | 33.7% | 56.0% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Intercontinental Hotels Group ($IHG) | 64.5% | 86.0% | 86.0% | 83.7% | |
| Eclectic Bar Grp ($BAR) | 79.4% | 80.7% | 82.3% | 82.9% | |
| Air Partner ($AIP) | 11.5% | 12.9% | 14.7% | 74.4% | |
| Nektan ($NKTN) | 42.6% | 67.9% | 64.1% | 62.2% | |
| Carnival ($CCL) | 39.9% | 42.7% | 40.0% | 41.3% | |
| |
|---|
| Median (9 companies) | 40.1% | 39.3% | 36.2% | 41.3% | 8.8% |
|---|
| Easyhotel ($EZH) | 68.8% | 64.3% | 61.3% | 53.5% | 48.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Ryanair Hldgs ($RYA) | 25.1% | 28.9% | 30.6% | 31.2% | |
| Celtic ($CCP) | -1.3% | 14.6% | 18.5% | 28.4% | |
| Carnival ($CCL) | 26.7% | 29.3% | 26.6% | 28.3% | |
| Heavitree Brewery ($HVT) | 23.7% | 25.0% | 27.8% | 24.5% | |
| Young & Co'S Brewery ($YNGN) | 22.9% | 22.6% | 23.5% | 23.4% | |
| |
|---|
| Median (16 companies) | 12.5% | 15.9% | 16.7% | 15.1% | 5.0% |
|---|
| Easyhotel ($EZH) | 21.7% | 21.6% | 18.0% | 19.4% | 13.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Ryanair Hldgs ($RYA) | 13.9% | 18.6% | 21.8% | 20.6% | |
| Carnival ($CCL) | 14.6% | 18.7% | 16.8% | 19.9% | |
| Marston'S ($MARS) | 16.2% | 15.3% | 19.4% | 14.3% | |
| Ana Hldgs Inc ($ANA) | 14.1% | 14.1% | 12.7% | 13.5% | |
| Young & Co'S Brewery ($YNGN) | 14.3% | 16.9% | 12.8% | 10.9% | |
| |
|---|
| Median (16 companies) | 5.7% | 8.1% | 5.7% | 6.1% | 5.5% |
|---|
| Easyhotel ($EZH) | 46.8% | 153.2% | 269.8% | 412.1% | 142.5% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Intercontinental Hotels Group ($IHG) | 96.6% | 51.2% | 92.2% | 45.0% | |
| Air Partner ($AIP) | 20.0% | 20.4% | 24.6% | 34.6% | |
| Celtic ($CCP) | -14.7% | 1.5% | 11.6% | 23.7% | |
| Ryanair Hldgs ($RYA) | 13.3% | 17.2% | 17.7% | 18.4% | |
| Meikles Ltd ($MIK) | -3.5% | 1.0% | 6.1% | 12.2% | |
| |
|---|
| Median (20 companies) | 6.3% | 6.3% | 7.1% | 8.7% | 6.2% |
|---|
| Easyhotel ($EZH) | 2.0% | 2.1% | 1.1% | 0.6% | -2.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Marston'S ($MARS) | 8.2x | 6.2x | 6.9x | 8.7x | |
| Peel Hotels ($PHO) | 4.4x | 3.9x | 0.4x | 4.3x | |
| Heavitree Brewery ($HVT) | 4.6x | 4.1x | 3.7x | 3.7x | |
| Eclectic Bar Grp ($BAR) | 1.5x | 6.8x | 2.1x | 3.4x | |
| Intercontinental Hotels Group ($IHG) | 0.3x | 1.9x | 2.3x | 3.1x | |
| |
|---|
| Median (15 companies) | 1.5x | 2.3x | 2.0x | 2.2x | 1.1x |
|---|
| Easyhotel ($EZH) | -12.9x | -5.0x | -14.0x | -11.4x | 2.5x |
