Cvs Group reports 38.1% EBITDA growth in 2020 and 3.6 pp EBITDA Margin growth from 11.6% to 15.2%
24 Sep 2020 • About Cvs Group (
$CVSG) • By InTwits
Cvs Group reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- Cvs Group is a growth stock: FY2020 revenue growth was 5.2%, 5 year revenue CAGR was 20.7% at FY2020 ROIC 5.1%
- Cvs Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's a lot of higher than industry average of 2.4%.
- CAPEX is quite volatile: £0m in FY2020, £1m in FY2019, £1m in FY2018, £1m in FY2017, £1m in FY2016
- The company has potentially unprofitable business model: ROIC is 5.1%
- It operates with high leverage: Net Debt/EBITDA is 2.5x while industry average is 1.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Cvs Group's Revenue increased on 5.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 7.7% to 9.3% in FY2020.
Gross Margin decreased slightly on 1.8 pp from 41.5% to 39.8% in FY2020. Gross Margin stuck to a declining trend at -2.2 pp per annum in the last 5 years. SG&A as a % of Revenue decreased on 2.3 pp from 37.7% to 35.4% in FY2020. SG&A as a % of Revenue followed a declining trend at -1.7 pp per annum in the last 5 years.
Net Income margin decreased slightly on 0.68 pp from 2.0% to 1.3% in FY2020. During the last 5 years Net Income margin topped in FY2017 at 4.2% and was declining since that time.
Investments (CAPEX, working capital and M&A)
Cvs Group's CAPEX/Revenue was 2.6% in FY2020. CAPEX/Revenue decreased on 2.3 pp from 4.9% in FY2017 to 2.6% in FY2020. It's average level of CAPEX/Revenue for the last three years was 2.9%. CAPEX as a % of Revenue stuck to a declining trend at -0.71 pp per annum in the last 5 years.
Return on investment
The company operates at low ROIC (5.1%) and ROE (3.5%). ROIC showed almost no change in FY2020. ROE decreased slightly on 1.7 pp from 5.1% to 3.5% in FY2020. ROIC stuck to a declining trend at -1.2 pp per annum in FY2016-FY2020. ROE declined at -3.8 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 2.5x Net Debt / EBITDA and 2.8x Debt / EBITDA. Net Debt / EBITDA surged on 0.3x from 2.2x to 2.5x in FY2020. Debt jumped on 59.1% while cash jumped on 72%. During the last 5 years Net Debt/EBITDA bottomed in FY2018 at 1.6x and was growing since that time.
Cvs Group has no short term refinancing risk: cash is higher than short term debt (241.6%).
Valuation and dividends
The company's trades at EV/EBITDA 15.4x and P/E 147.4x.
Financial and operational results
FY ended 30 Jun 2020
Cvs Group ($CVSG) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 218.1 | 271.8 | 327.3 | 406.5 | 427.8 | 5.2% |
| Gross Profit | 105.9 | 124.5 | 151.6 | 168.9 | 170.1 | 0.7% |
| SG&A | 94.1 | 107.3 | 133.9 | 153.3 | 151.6 | -1.1% |
| EBITDA | 30.7 | 39.1 | 44.1 | 47.0 | 64.9 | 38.1% |
| Net Income | 7.0 | 11.5 | 10.7 | 8.2 | 5.7 | -30.5% |
Balance Sheet
|
|---|
| Cash | 6.7 | 6.8 | 15.0 | 12.5 | 21.5 | 72.0% |
| Short Term Debt | 0.3 | 3.3 | 0.5 | 0.3 | 8.9 | 2,866.7% |
| Long Term Debt | 99.5 | 103.5 | 83.5 | 114.2 | 173.3 | 51.8% |
Cash flow
|
|---|
| Capex | 11.3 | 13.3 | 10.2 | 11.9 | 11.1 | -6.7% |
Ratios
|
|---|
| Revenue growth | 30.4% | 24.6% | 20.4% | 24.2% | 5.2% | |
| EBITDA growth | 33.5% | 27.4% | 12.8% | 6.6% | 38.1% | |
|
|---|
| Gross Margin | 48.6% | 45.8% | 46.3% | 41.5% | 39.8% | -1.8% |
| EBITDA Margin | 14.1% | 14.4% | 13.5% | 11.6% | 15.2% | 3.6% |
| SG&A, % of revenue | 43.1% | 39.5% | 40.9% | 37.7% | 35.4% | -2.3% |
| Net Income Margin | 3.2% | 4.2% | 3.3% | 2.0% | 1.3% | -0.7% |
| CAPEX, % of revenue | 5.2% | 4.9% | 3.1% | 2.9% | 2.6% | -0.3% |
|
|---|
| ROIC | 9.2% | 9.2% | 7.4% | 5.3% | 5.1% | -0.2% |
| ROE | 16.3% | 17.1% | 8.7% | 5.1% | 3.5% | -1.7% |
| Net Debt/EBITDA | 3.0x | 2.6x | 1.6x | 2.2x | 2.5x | 0.3x |
Peers in General Retailers
Below we provide Cvs Group 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dunelm Group ($DNLM) | - | 8.5% | 9.9% | 4.8% | -3.9% |
| Scs Group ($SCS) | 14.7% | 4.9% | -6.0% | 1.5% | - |
| Shoe Zone ($SHOE) | -4.2% | -1.3% | 1.8% | 0.9% | - |
| Lotte Shopping Co Ltd ($LOTS) | -17.2% | -24.6% | -2.0% | -1.1% | - |
| Mysale Group ($MYSL) | 7.0% | 6.4% | 8.9% | -28.6% | - |
| |
|---|
| Median (5 companies) | 6.1% | -0.5% | 1.8% | 0.9% | -3.9% |
|---|
| Cvs Group ($CVSG) | - | 24.6% | 20.4% | 24.2% | 5.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dunelm Group ($DNLM) | 49.8% | 48.9% | 48.0% | 49.6% | 50.3% |
| Scs Group ($SCS) | 47.0% | 46.2% | 47.1% | 47.2% | - |
| Lotte Shopping Co Ltd ($LOTS) | 32.6% | 42.0% | 42.1% | 42.2% | - |
| Shoe Zone ($SHOE) | 17.4% | 19.1% | 19.0% | 15.5% | - |
| Mysale Group ($MYSL) | 26.4% | 28.3% | 29.3% | 8.9% | - |
| |
|---|
| Median (5 companies) | 38.8% | 43.9% | 42.1% | 42.2% | 50.3% |
|---|
| Cvs Group ($CVSG) | 48.6% | 45.8% | 46.3% | 41.5% | 39.8% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dunelm Group ($DNLM) | 17.3% | 12.7% | 12.3% | 14.5% | 18.4% |
| Shoe Zone ($SHOE) | 8.5% | 8.1% | 9.0% | 6.2% | - |
| Scs Group ($SCS) | 5.1% | 5.2% | 6.1% | 6.1% | - |
| Mysale Group ($MYSL) | 1.8% | 2.0% | 1.8% | -24.3% | - |
| |
|---|
| Median (4 companies) | 3.6% | 3.6% | 6.1% | 6.2% | 18.4% |
|---|
| Cvs Group ($CVSG) | 14.1% | 14.4% | 13.5% | 11.6% | 15.2% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Shoe Zone ($SHOE) | 2.0% | 3.3% | 3.2% | 4.5% | - |
| Scs Group ($SCS) | 0.9% | 1.4% | 0.7% | 1.4% | - |
| Dunelm Group ($DNLM) | 3.4% | 4.9% | 3.2% | 1.1% | 1.9% |
| Mysale Group ($MYSL) | 0.3% | 0.4% | 0.3% | 0.0% | - |
| |
|---|
| Median (4 companies) | 1.8% | 2.4% | 2.9% | 1.2% | 1.9% |
|---|
| Cvs Group ($CVSG) | 5.2% | 4.9% | 3.1% | 2.9% | 2.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dunelm Group ($DNLM) | 65.9% | 41.5% | 36.6% | 47.5% | 27.9% |
| Scs Group ($SCS) | 38.0% | 37.2% | 35.1% | 29.8% | - |
| Shoe Zone ($SHOE) | 30.6% | 30.7% | 31.7% | 19.6% | - |
| Home Retail Group ($HOME) | -36.4% | - | - | -0.0% | - |
| Mysale Group ($MYSL) | 0.3% | -0.0% | -1.9% | -106.4% | - |
| |
|---|
| Median (6 companies) | 9.8% | 4.5% | 5.5% | 19.6% | 27.9% |
|---|
| Cvs Group ($CVSG) | 9.2% | 9.2% | 7.4% | 5.3% | 5.1% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dunelm Group ($DNLM) | 0.5x | 1.0x | 1.0x | 0.2x | 1.4x |
| Shoe Zone ($SHOE) | -1.1x | -0.9x | -1.1x | -1.1x | - |
| Scs Group ($SCS) | -1.4x | -2.3x | -2.5x | -3.0x | - |
| |
|---|
| Median (3 companies) | -0.2x | 1.0x | 1.0x | -1.1x | 1.4x |
|---|
| Cvs Group ($CVSG) | 3.0x | 2.6x | 1.6x | 2.2x | 2.5x |
