Points International Ltd demonstrated fast growth in recent years. Will the growth continue?
11.03.2015 • About Points International Ltd (
$PTS) • By InTwits
Points International Ltd is a fast-growing stock in Communications industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Points International Ltd showed fast growth in the last financial year. The company's revenue surged on 26.0% in FY2014. In addition to revenue Points International Ltd also keeps delivering EBITDA growth. It was 21.5% in FY2014
In the longer period Points International Ltd showed fast revenue growth of 27.5% from 2011 to 2014 annually. EBITDA surged on 16.1% from 2011 to 2014 annually.
Points International Ltd ($PTS) financials for the last 5 years
| mln. $ | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 96 | 123 | 139 | 202 | 255 |
|---|
| Revenue growth, % | | 28.5% | 13.5% | 45.1% | 26.0% |
|---|
| Gross margin, % | 19.6% | 18.0% | 18.4% | 14.7% | 14.7% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 3 | 6 | 6 | 7 | 9 |
|---|
| EBITDA growth, % | | 76.3% | 9.8% | 17.1% | 21.5% |
|---|
| EBITDA margin, % | 3.40% | 4.67% | 4.52% | 3.65% | 3.52% |
|---|
| Net Income | 2 | 4 | 8 | 4 | 5 |
|---|
| Net Income margin, % | 2.04% | 3.28% | 5.92% | 1.78% | 1.84% |
|---|
| |
| CAPEX | 1 | 1 | 1 | 1 | 1 |
|---|
| CAPEX/Revenue, % | 1.42% | 0.497% | 0.773% | 0.484% | 0.296% |
|---|
| Debt | 0 | 0 | 0 | 0 | 0 |
|---|
| Cash | 28 | 35 | 45 | 64 | 37 |
|---|
| Net Debt/EBITDA | -8.8x | -6.1x | -7.2x | -8.7x | -4.1x |
|---|
| |
| ROIC, % | 17.4% | 20.7% | 14.9% | 15.0% | 21.2% |
|---|
| ROE, % | 14.4% | 24.3% | 35.3% | 11.9% | 12.7% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. If we look for the longer period Points International Ltd showed big decline in EBITDA margin of 1.20 pp from 4.70% in 2011 to 3.50% in 2014.
We call Points International Ltd an attractive growth stock as together with the growth it delivers high ROIC at 21.2%. Three years ago it was a bit lower at 20.7%. It's average ROIC for the last three years was 17.0%.
Net Income margin didn't change on 0 pp from 1.80% to 1.80% in 2014. In the last 3 years the company's Net Income margin dropped on 1.50 pp from 3.30% in 2011 to 1.80% in 2014.
Points International Ltd operates at ROE of 12.7%. It's average level of ROE for the last three years was 20.0%.
Capital expenditures (CAPEX)
In FY2014 Points International Ltd had CAPEX/Revenue of 0.296%. CAPEX/Revenue dropped on 0.201 pp from 0.497% in 2011 to 0.296% in 2014. Average CAPEX/Revenue for the last three years was 0.518%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -4.1x Net Debt/EBITDA. If we look for the longer period Points International Ltd's leverage surged on 1.96x from -6.08x in 2011 to -4.11x in 2014.
Peers in Communications
Below you can find Points International Ltd benchmarking vs. other companies in Communications 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| BSM Technologies Inc ($GPS) | | | | 39.1% | 55.5% |
| Plaintree Systems Inc ($NPT) | | 20.1% | 14.5% | 9.1% | 50.8% |
| Aimia Inc ($AIM) | | 2.9% | 6.3% | -25.6% | 47.5% |
| Blackline Safety Corp ($BLN) | | -4.3% | 37.1% | 9.4% | 45.1% |
| Wanted Technologies Corp ($WAN) | | 9.5% | 13.1% | 20.0% | 39.1% |
| |
|---|
| Median (36 companies) | | 6.6% | 5.4% | 2.7% | 3.4% |
|---|
| Points International Ltd ($PTS) | | 28.5% | 13.5% | 45.1% | 26.0% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Wanted Technologies Corp ($WAN) | 97.1% | 86.6% | 90.5% | 93.2% | 94.3% |
| CounterPath Corp ($CCV) | 64.8% | 74.1% | 80.0% | 85.1% | 80.9% |
| Mediagrif Interactive Technologies Inc ($MDF) | 77.5% | 78.2% | 79.8% | 79.8% | 78.8% |
| NeuLion Inc ($NLN) | 40.9% | 45.2% | 53.6% | 63.8% | 70.2% |
| Sangoma Technologies Corp ($STC) | 74.0% | 74.5% | 68.8% | | 66.9% |
| |
|---|
| Median (29 companies) | 41.1% | 43.3% | 46.0% | 43.2% | 43.2% |
|---|
| Points International Ltd ($PTS) | 19.6% | 18.0% | 18.4% | 14.7% | 14.7% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Manitoba Telecom Services Inc ($MBT) | 31.7% | 33.7% | 34.3% | 33.7% | 47.4% |
| Cogeco Cable Inc ($CCA) | 39.8% | 45.8% | 46.0% | 44.9% | 43.8% |
| Cogeco Inc ($CGO) | 39.3% | 28.1% | 43.2% | 43.5% | 43.3% |
| Shaw Communications Inc ($SJR.B) | 44.7% | 43.3% | 42.7% | 43.3% | 42.1% |
| BCE Inc ($BCE) | 38.3% | 37.0% | 38.8% | 37.7% | 38.4% |
| |
|---|
| Median (36 companies) | 14.3% | 14.1% | 18.8% | 18.5% | 19.0% |
|---|
| Points International Ltd ($PTS) | 3.4% | 4.7% | 4.5% | 3.6% | 3.5% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Newfoundland Capital Corp Ltd ($NCC.B) | 2.5% | | 8.7% | 5.5% | 76.8% |
| TeraGo Inc ($TGO) | 36.2% | 21.6% | 20.9% | 21.5% | 23.1% |
| Manitoba Telecom Services Inc ($MBT) | 20.3% | 16.3% | 19.8% | 18.1% | 22.4% |
| Cogeco Cable Inc ($CCA) | 24.1% | 24.6% | 28.1% | 23.0% | 20.6% |
| TELUS Corp ($T) | 17.6% | 18.0% | 17.9% | 17.8% | 19.8% |
| |
|---|
| Median (37 companies) | 4.3% | 4.7% | 3.3% | 3.3% | 3.3% |
|---|
| Points International Ltd ($PTS) | 1.4% | 0.5% | 0.8% | 0.5% | 0.3% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Tucows Inc ($TC) | 7.7% | 12.8% | 17.7% | 22.5% | 35.4% |
| NeuLion Inc ($NLN) | -76.2% | -62.1% | -55.8% | -10.3% | 18.5% |
| Yellow Pages Ltd/Canada ($Y) | 7.2% | 8.9% | 18.0% | 28.4% | 17.9% |
| Advantex Marketing International Inc ($ADX) | 52.5% | | | 28.9% | 17.5% |
| Manitoba Telecom Services Inc ($MBT) | 13.5% | 17.8% | 20.3% | 17.0% | 14.8% |
| |
|---|
| Median (38 companies) | 7.4% | 3.1% | 9.2% | 8.3% | 9.0% |
|---|
| Points International Ltd ($PTS) | 17.4% | 20.7% | 14.9% | 15.0% | 21.2% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Plaintree Systems Inc ($NPT) | 1.7x | 0.7x | | | 124.2x |
| Advantex Marketing International Inc ($ADX) | 1.9x | | 4.8x | 2.2x | 5.0x |
| MDC Partners Inc ($MDZ.A) | 4.3x | 7.3x | 12.4x | 112.6x | 4.6x |
| Postmedia Network Canada Corp ($PNC.B) | | 2.9x | 3.3x | 3.4x | 4.2x |
| Newfoundland Capital Corp Ltd ($NCC.B) | 2.1x | | 1.4x | 1.3x | 3.3x |
| |
|---|
| Median (30 companies) | 1.7x | 1.6x | 1.4x | 1.5x | 1.7x |
|---|
| Points International Ltd ($PTS) | -8.8x | -6.1x | -7.2x | -8.7x | -4.1x |
