Scs Group EBITDA surged on 49.2% and EBITDA Margin increased on 5.2 pp from 6.1% to 11.4%
29 Sep 2020 • About Scs Group (
$SCS) • By InTwits
Scs Group reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 11.4% in FY2020, 6.1% in FY2019, 6.1% in FY2018, 5.2% in FY2017, 5.1% in FY2016
- Scs Group has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's a lot of higher than industry average of 1.5%.
- 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 0.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.9x while industry average is 1.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Scs Group's Revenue dropped on 19.5%. Revenue decline was accelerating on average at -7.2 pp per annum in the last 5 years. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.2 pp from 6.1% to 11.4% in FY2020.
Gross Margin showed almost no change in FY2020. SG&A as a % of Revenue increased on 3.7 pp from 42.8% to 46.5% in FY2020. SG&A as a % of Revenue stuck to a growing trend at 2.1 pp per annum in FY2016-FY2020.
Net Income margin decreased on 4.5 pp from 3.6% to -0.87% in FY2020. During FY2016-FY2020 Net Income margin topped in FY2019 at 3.6%.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 1.1%. Scs Group showed almost no change in CAPEX/Revenue from FY2017 to FY2020. For the last three years the average CAPEX/Revenue was 1.1%.
Return on investment
The company operates at low but positive ROIC (0.6%) and negative ROE (-6.5%). ROIC dropped on 29.2 pp from 29.8% to 0.64% in FY2020. ROE dropped on 34.9 pp from 28.4% to -6.5% in FY2020. ROIC followed a declining trend in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.9x and Debt / EBITDA is 4.7x. Net Debt / EBITDA jumped on 4.8x from -3.0x to 1.9x in FY2020. Debt surged while cash jumped on 42.7%. During the last 5 years Net Debt/EBITDA bottomed in FY2019 at -3.0x.
Scs Group has no short term refinancing risk: cash is higher than short term debt (340.5%).
Financial and operational results
FY ended 25 Jul 2020
Scs Group ($SCS) key annual financial indicators| mln. £ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 317.3 | 333.0 | 312.8 | 317.4 | 255.5 | -19.5% |
| Gross Profit | 149.1 | 153.7 | 147.2 | 149.9 | 119.6 | -20.2% |
| SG&A | 122.6 | 125.2 | 133.6 | 135.9 | 118.9 | -12.6% |
| EBITDA | 16.0 | 17.4 | 19.2 | 19.4 | 29.0 | 49.2% |
| Net Income | 8.7 | 9.4 | 10.7 | 11.4 | -2.2 | -119.5% |
Balance Sheet
|
|---|
| Cash | 22.4 | 40.1 | 48.2 | 57.7 | 82.3 | 42.7% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 24.2 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 112.3 | |
Cash flow
|
|---|
| Capex | 3.0 | 4.7 | 2.3 | 4.4 | 2.7 | -38.5% |
Ratios
|
|---|
| Revenue growth | 14.7% | 4.9% | -6.0% | 1.5% | -19.5% | |
| EBITDA growth | 43.3% | 8.4% | 10.5% | 1.1% | 49.2% | |
|
|---|
| Gross Margin | 47.0% | 46.2% | 47.1% | 47.2% | 46.8% | -0.4% |
| EBITDA Margin | 5.1% | 5.2% | 6.1% | 6.1% | 11.4% | 5.2% |
| SG&A, % of revenue | 38.6% | 37.6% | 42.7% | 42.8% | 46.5% | 3.7% |
| Net Income Margin | 2.8% | 2.8% | 3.4% | 3.6% | -0.9% | -4.5% |
| CAPEX, % of revenue | 0.9% | 1.4% | 0.7% | 1.4% | 1.1% | -0.3% |
|
|---|
| ROIC | 38.0% | 37.2% | 35.1% | 29.8% | 0.6% | -29.2% |
| ROE | 31.0% | 29.9% | 30.3% | 28.4% | -6.5% | -34.9% |
| Net Debt/EBITDA | -1.4x | -2.3x | -2.5x | -3.0x | 1.9x | 4.8x |
Peers in General Retailers
Below you can find Scs Group benchmarking vs. other companies in General Retailers 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 |
|---|
| Cvs Group ($CVSG) | - | 24.6% | 20.4% | 24.2% | 5.2% |
| Dunelm Group ($DNLM) | - | 8.5% | 9.9% | 4.8% | -3.9% |
| 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 ($MYSL) | 7.0% | 6.4% | 8.9% | -28.6% | - |
| |
|---|
| Median (6 companies) | 3.1% | -0.5% | 2.5% | -0.1% | 0.7% |
|---|
| Scs Group ($SCS) | - | 4.9% | -6.0% | 1.5% | -19.5% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dunelm Group ($DNLM) | 49.8% | 48.9% | 48.0% | 49.6% | 50.3% |
| Lotte Shopping Co Ltd ($LOTS) | 32.6% | 42.0% | 42.1% | 42.2% | - |
| Cvs Group ($CVSG) | 48.6% | 45.8% | 46.3% | 41.5% | 39.8% |
| Shoe Zone ($SHOE) | 17.4% | 19.1% | 19.0% | 15.5% | - |
| Mysale Group ($MYSL) | 26.4% | 28.3% | 29.3% | 8.9% | - |
| |
|---|
| Median (5 companies) | 38.8% | 43.9% | 42.1% | 41.5% | 45.0% |
|---|
| Scs Group ($SCS) | 47.0% | 46.2% | 47.1% | 47.2% | 46.8% |
Top companies by EBITDA margin, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dunelm Group ($DNLM) | 17.3% | 12.7% | 12.3% | 14.5% | 18.4% |
| Cvs Group ($CVSG) | 14.1% | 14.4% | 13.5% | 11.6% | 15.2% |
| Shoe Zone ($SHOE) | 8.5% | 8.1% | 9.0% | 6.2% | - |
| Mysale Group ($MYSL) | 1.8% | 2.0% | 1.8% | -24.3% | - |
| |
|---|
| Median (4 companies) | 4.7% | 4.9% | 7.5% | 8.9% | 16.8% |
|---|
| Scs Group ($SCS) | 5.1% | 5.2% | 6.1% | 6.1% | 11.4% |
Top companies by CAPEX/Revenue, %
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Shoe Zone ($SHOE) | 2.0% | 3.3% | 3.2% | 4.5% | - |
| Cvs Group ($CVSG) | 5.2% | 4.9% | 3.1% | 2.9% | 2.6% |
| Dunelm Group ($DNLM) | 3.4% | 4.9% | 3.2% | 1.1% | 1.9% |
| Mysale Group ($MYSL) | 0.3% | 0.4% | 0.3% | 0.0% | - |
| |
|---|
| Median (4 companies) | 2.3% | 3.0% | 3.1% | 2.0% | 2.3% |
|---|
| Scs Group ($SCS) | 0.9% | 1.4% | 0.7% | 1.4% | 1.1% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dunelm Group ($DNLM) | 65.9% | 41.5% | 36.6% | 47.5% | 27.9% |
| Shoe Zone ($SHOE) | 30.6% | 30.7% | 31.7% | 19.6% | - |
| Cvs Group ($CVSG) | 9.2% | 9.2% | 7.4% | 5.3% | 5.1% |
| Home Retail Group ($HOME) | -36.4% | - | - | -0.0% | - |
| Mysale Group ($MYSL) | 0.3% | -0.0% | -1.9% | -106.4% | - |
| |
|---|
| Median (7 companies) | 9.2% | 4.5% | 5.5% | 5.3% | 16.5% |
|---|
| Scs Group ($SCS) | 38.0% | 37.2% | 35.1% | 29.8% | 0.6% |
Top companies by Net Debt / EBITDA
| Top | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Cvs Group ($CVSG) | 3.0x | 2.6x | 1.6x | 2.2x | 2.5x |
| Dunelm Group ($DNLM) | 0.5x | 1.0x | 1.0x | 0.2x | 1.4x |
| Shoe Zone ($SHOE) | -1.1x | -0.9x | -1.1x | -1.1x | - |
| |
|---|
| Median (3 companies) | 1.0x | 1.4x | 1.2x | 0.2x | 1.9x |
|---|
| Scs Group ($SCS) | -1.4x | -2.3x | -2.5x | -3.0x | 1.9x |
