Rank Group Debt surged on 516% and EBITDA surged on 17.6%
10 Sep 2020 • About Rank Group (
$RNK) • By InTwits
Rank Group reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Rank Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.3%. At the same time it's a lot of higher than industry average of 19.1%.
- CAPEX is quite volatile: £1m in FY2020, £2m in FY2019, £8m in FY2018, £8m in FY2017, £1m in FY2016
- The company has potentially unprofitable business model: ROIC is 3.6%
- It operates with high leverage: Net Debt/EBITDA is 3.0x while industry average is 2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Rank Group's Revenue decreased on 8.2%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.4 pp from 12.1% to 15.5% in FY2020. During FY2016-FY2020 EBITDA Margin bottomed in FY2019 at 12.1%.
Gross Margin decreased on 2.9 pp from 45.6% to 42.7% in FY2020.
Net Income margin decreased on 2.7 pp from 4.2% to 1.5% in FY2020. Net Income margin stuck to a declining trend at -2.3 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2020 Rank Group had CAPEX/Revenue of 5.1%. The company's CAPEX/Revenue increased slightly on 0.94 pp from 4.2% in FY2017 to 5.1% in FY2020. It's average CAPEX/Revenue for the last three years was 4.0%. During FY2016-FY2020 CAPEX as a % of Revenue bottomed in FY2019 at 3.3%.
Return on investment
The company operates at low ROIC (3.6%) and ROE (2.6%). ROIC decreased on 4.4 pp from 8.1% to 3.6% in FY2020. ROE decreased on 4.8 pp from 7.3% to 2.6% in FY2020. ROIC declined at -4.1 pp per annum in the last 5 years. ROE stuck to a declining trend at -5.1 pp per annum in FY2016-FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.0x and Debt / EBITDA is 3.7x. Net Debt / EBITDA jumped on 3.0x from -0.021x to 3.0x in FY2020. Debt jumped on 516% while cash jumped on 19.1%.
Rank Group has no short term refinancing risk: cash is higher than short term debt (101.4%).
Valuation and dividends
Rank Group's trades at EV/EBITDA 6.9x and P/E 39.8x.
Management team
Rank Group's CEO John O'Reilly has spent 2 years with the company. Rank Group's CFO is William Floydd "Bill". William Floydd "Bill" has 2 years tenure at the company.
Financial and operational results
FY ended 30 Jun 2020
Rank Group ($RNK) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 708.5 | 707.2 | 691.0 | 695.1 | 638.1 | -8.2% |
| Gross Profit | 316.8 | 315.8 | 314.4 | 316.9 | 272.6 | -14.0% |
| EBITDA | 137.5 | 129.8 | 93.1 | 84.2 | 99.0 | 17.6% |
| Net Income | 74.7 | 62.9 | 35.9 | 29.1 | 9.8 | -66.3% |
Balance Sheet
|
|---|
| Cash | 61.0 | 79.0 | 50.4 | 61.8 | 73.6 | 19.1% |
| Short Term Debt | 14.4 | 34.6 | 54.2 | 54.7 | 72.6 | 32.7% |
| Long Term Debt | 87.8 | 57.0 | 5.5 | 5.3 | 297.0 | 5,503.8% |
Cash flow
|
|---|
| Capex | 38.2 | 29.6 | 25.4 | 22.9 | 32.7 | 42.8% |
Ratios
|
|---|
| Revenue growth | 1.1% | -0.2% | -2.3% | 0.6% | -8.2% | |
| EBITDA growth | 7.1% | -5.6% | -28.3% | -9.6% | 17.6% | |
|
|---|
| Gross Margin | 44.7% | 44.7% | 45.5% | 45.6% | 42.7% | -2.9% |
| EBITDA Margin | 19.4% | 18.4% | 13.5% | 12.1% | 15.5% | 3.4% |
| Net Income Margin | 10.5% | 8.9% | 5.2% | 4.2% | 1.5% | -2.7% |
| CAPEX, % of revenue | 5.4% | 4.2% | 3.7% | 3.3% | 5.1% | 1.8% |
|
|---|
| ROIC | 19.7% | 17.3% | 10.2% | 8.1% | 3.6% | -4.4% |
| ROE | 23.1% | 16.9% | 9.1% | 7.3% | 2.6% | -4.8% |
| Net Debt/EBITDA | 0.3x | 0.1x | 0.1x | -0.0x | 3.0x | 3.0x |
Peers in Travel & Leisure
Below you can find Rank Group 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Easyhotel ($EZH) | 8.7% | 39.7% | 33.7% | 56.0% | - |
| Nektan ($NKTN) | 995.3% | 129.1% | 50.1% | 13.5% | - |
| Carnival ($CCL) | 4.3% | 6.8% | 7.8% | 10.3% | - |
| Intercontinental Hotels Group ($IHG) | 117.0% | 4.2% | 6.4% | 6.7% | - |
| Go-Ahead Group ($GOG) | 4.5% | 3.6% | -0.6% | 6.1% | - |
| |
|---|
| Median (9 companies) | 8.3% | 7.3% | 7.6% | 6.1% | - |
|---|
| Rank Group ($RNK) | - | -0.2% | -2.3% | 0.6% | -8.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Intercontinental Hotels Group ($IHG) | 86.0% | 86.0% | 83.7% | 82.9% | - |
| Nektan ($NKTN) | 67.9% | 64.1% | 62.2% | 56.9% | - |
| Easyhotel ($EZH) | 64.3% | 61.3% | 53.5% | 48.1% | - |
| Carnival ($CCL) | 42.7% | 40.0% | 41.3% | 38.0% | - |
| Eclectic Bar Grp ($BAR) | 80.7% | 82.3% | 82.9% | 35.6% | - |
| |
|---|
| Median (6 companies) | 42.7% | 38.1% | 47.4% | 43.0% | - |
|---|
| Rank Group ($RNK) | 44.7% | 44.7% | 45.5% | 45.6% | 42.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Heavitree Brewery ($HVT) | 25.0% | 27.8% | 24.5% | 27.4% | - |
| Carnival ($CCL) | 29.3% | 26.6% | 28.3% | 26.1% | - |
| Eclectic Bar Grp ($BAR) | 6.1% | 11.1% | 13.0% | 21.0% | - |
| Intercontinental Hotels Group ($IHG) | 20.2% | 19.7% | 14.9% | 16.1% | - |
| Easyhotel ($EZH) | 21.6% | 18.0% | 19.4% | 13.5% | - |
| |
|---|
| Median (8 companies) | 15.9% | 16.7% | 15.1% | 14.8% | - |
|---|
| Rank Group ($RNK) | 19.4% | 18.4% | 13.5% | 12.1% | 15.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Easyhotel ($EZH) | 153.2% | 269.8% | 412.1% | 142.5% | - |
| Carnival ($CCL) | 18.7% | 16.8% | 19.9% | 26.1% | - |
| Heavitree Brewery ($HVT) | 17.8% | 15.3% | 10.2% | 6.7% | - |
| Eclectic Bar Grp ($BAR) | 5.5% | 5.4% | 10.5% | 5.5% | - |
| Tui Ag ($TUI) | 4.4% | 6.0% | 5.4% | 5.5% | - |
| |
|---|
| Median (7 companies) | 8.1% | 5.7% | 6.1% | 5.5% | - |
|---|
| Rank Group ($RNK) | 5.4% | 4.2% | 3.7% | 3.3% | 5.1% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Go-Ahead Group ($GOG) | 33.1% | 25.4% | 22.9% | 12.8% | - |
| Heavitree Brewery ($HVT) | 8.5% | 10.3% | 8.7% | 9.6% | - |
| Carnival ($CCL) | 9.5% | 8.6% | 9.8% | 9.1% | - |
| Eclectic Bar Grp ($BAR) | 1.2% | 8.3% | 8.1% | 6.4% | - |
| Tui Ag ($TUI) | 15.5% | 14.4% | 12.1% | 6.2% | - |
| |
|---|
| Median (9 companies) | 6.3% | 7.1% | 8.7% | 7.8% | - |
|---|
| Rank Group ($RNK) | 19.7% | 17.3% | 10.2% | 8.1% | 3.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Heavitree Brewery ($HVT) | 4.1x | 3.7x | 3.7x | 2.9x | - |
| Easyhotel ($EZH) | -5.0x | -14.0x | -11.4x | 2.5x | - |
| Carnival ($CCL) | 1.8x | 1.9x | 1.7x | 2.0x | - |
| Tui Ag ($TUI) | -0.0x | -0.5x | 0.0x | 1.1x | - |
| Eclectic Bar Grp ($BAR) | 6.8x | 2.1x | 3.4x | 0.7x | - |
| |
|---|
| Median (7 companies) | 1.9x | 1.9x | 1.7x | 1.1x | - |
|---|
| Rank Group ($RNK) | 0.3x | 0.1x | 0.1x | -0.0x | 3.0x |
