DFS Furniture Plc Net Debt / EBITDA surged on 12.3x from 2.7x to 15.0x in 2020 while Revenue dropped on 19.6%
24 Sep 2020 • About DFS Furniture Plc (
$DFS) • By InTwits
DFS Furniture Plc reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- DFS Furniture Plc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's in pair with industry average of 2.3%
- CAPEX is quite volatile: £118m in FY2020, £100m in FY2019, £90m in FY2018, £38m in FY2017, £35m in FY2016
- The company has unprofitable business model: ROIC is -6.3%
- It operates with high leverage: Net Debt/EBITDA is 15.0x while industry average is 15.0x
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 dropped on 19.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.2 pp from -4.4% to -2.3% in FY2020. EBITDA Margin stuck to a declining trend at -1.7 pp per annum in FY2016-FY2020.
Gross Margin showed almost no change in FY2020. During the last 5 years Gross Margin topped in FY2017 at 58.8% and was declining since that time. SG&A as a % of Revenue decreased slightly on 1.3 pp from 50.7% to 49.3% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue topped in FY2019 at 50.7%.
Net Income margin dropped on 11.6 pp from 2.0% to -9.6% in FY2020. Net Income margin stuck to a declining trend at -3.8 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.3% in FY2020. DFS Furniture Plc's CAPEX/Revenue decreased slightly on 0.99 pp from 3.3% in FY2017 to 2.3% in FY2020. It's average CAPEX/Revenue for the last three years was 2.1%.
Return on investment
The company operates at negative ROIC (-6.3%) and ROE (-30.5%). ROIC dropped on 13.7 pp from 7.4% to -6.3% in FY2020. ROE dropped on 37.7 pp from 7.2% to -30.5% in FY2020. ROIC stuck to a declining trend at -5.4 pp per annum in FY2016-FY2020. ROE followed a declining trend at -12.1 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 15.0x and Debt / EBITDA is 16.4x. Net Debt / EBITDA jumped on 12.3x from 2.7x to 15.0x in FY2020. Debt jumped on 279% while cash surged on 109%. Net Debt/EBITDA followed a growing trend in FY2016-FY2020.
DFS Furniture Plc has short term refinancing risk: cash is only 70.3% of short term debt.
Management team
DFS Furniture Plc's CEO Tim Stacey has spent 2 years with the company. Mike Schmidt is a the company's CFO. Mike Schmidt has spent 1 year at the company.
Financial and operational results
FY ended 28 Jun 2020
DFS Furniture Plc ($DFS) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 756.0 | 762.7 | 870.5 | 901.0 | 724.5 | -19.6% |
| Gross Profit | 134.3 | 448.5 | 506.9 | 517.2 | 414.0 | -20.0% |
| SG&A | 39.9 | 366.1 | 440.7 | 456.5 | 357.5 | -21.7% |
| EBITDA | 94.4 | 82.4 | 66.2 | 60.7 | 45.0 | -25.9% |
| Net Income | 60.3 | 39.5 | 18.8 | 18.1 | -69.2 | -482.3% |
Balance Sheet
|
|---|
| Cash | 66.7 | 61.0 | 47.2 | 29.8 | 62.3 | 109.1% |
| Short Term Debt | 1.8 | 0.0 | 0.0 | 0.0 | 88.6 | |
| Long Term Debt | 202.0 | 198.8 | 195.7 | 194.0 | 647.3 | 233.7% |
Cash flow
|
|---|
| Capex | 21.9 | 25.2 | 17.3 | 17.5 | 16.8 | -4.0% |
Ratios
|
|---|
| Revenue growth | 7.1% | 0.9% | 14.1% | 3.5% | -19.6% | |
| EBITDA growth | 21.6% | -12.7% | -19.7% | -8.3% | -25.9% | |
|
|---|
| Gross Margin | 17.8% | 58.8% | 58.2% | 57.4% | 57.1% | -0.3% |
| EBITDA Margin | 12.5% | 10.8% | 7.6% | 6.7% | 6.2% | -0.5% |
| SG&A, % of revenue | 5.3% | 48.0% | 50.6% | 50.7% | 49.3% | -1.3% |
| Net Income Margin | 8.0% | 5.2% | 2.2% | 2.0% | -9.6% | -11.6% |
| CAPEX, % of revenue | 2.9% | 3.3% | 2.0% | 1.9% | 2.3% | 0.4% |
|
|---|
| ROIC | 17.6% | 13.8% | 8.6% | 7.4% | -6.3% | -13.7% |
| ROE | 25.4% | 15.9% | 7.6% | 7.2% | -30.5% | -37.7% |
| Net Debt/EBITDA | 1.5x | 1.7x | 2.2x | 2.7x | 15.0x | 12.3x |
Peers in Home Furnishings
Below you can find DFS Furniture Plc benchmarking vs. other companies in Home Furnishings 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.
