The numbers tell that Solium Capital Inc is a solid growth stock
24.03.2015 • About Solium Capital Inc (
$SUM) • By InTwits
Have you thought about Solium Capital Inc as a growth stock? It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Solium Capital Inc showed fast growth in the last financial year. Solium Capital Inc's revenue surged on 16.3% in FY2014. EBITDA also increased: 14.2% for the same period.
In the last 3 years Solium Capital Inc showed fast revenue growth of 19.8% from 2011 to 2014 annually. EBITDA surged on 20.8% from 2011 to 2014 annually.
Solium Capital Inc ($SUM) financials for the last 5 years
| mln. CAD | 2010 | 2011 | 2012 | 2013 | 2014 |
|---|
| Revenue | 27 | 46 | 50 | 68 | 79 |
|---|
| Revenue growth, % | | 70.9% | 9.4% | 35.2% | 16.3% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 5 | 11 | 12 | 17 | 19 |
|---|
| EBITDA growth, % | | 121.6% | 8.9% | 42.0% | 14.2% |
|---|
| EBITDA margin, % | 18.3% | 23.7% | 23.6% | 24.7% | 24.3% |
|---|
| Net Income | 2 | 3 | 10 | 9 | 10 |
|---|
| Net Income margin, % | 6.82% | 5.87% | 20.8% | 12.8% | 12.2% |
|---|
| |
| CAPEX | 2 | 2 | 0 | 1 | 1 |
|---|
| CAPEX/Revenue, % | 5.90% | 3.98% | 0.830% | 1.81% | 1.76% |
|---|
| Debt | 0 | 0 | 2 | 0 | 0 |
|---|
| Cash | 12 | 17 | 15 | 24 | 51 |
|---|
| Net Debt/EBITDA | -2.5x | -1.6x | -1.1x | -1.5x | -2.7x |
|---|
| |
| ROIC, % | 18.2% | 21.0% | 19.4% | 19.0% | 16.6% |
|---|
| ROE, % | 9.1% | 8.9% | 27.1% | 13.8% | 10.6% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 24.7% in FY2013 to 24.3% in FY2014. In the last 3 years Solium Capital Inc showed small growth in EBITDA margin of 0.600 pp from 23.7% in 2011 to 24.3% in 2014.
We call Solium Capital Inc an attractive growth stock as together with the growth it delivers high ROIC at 16.6%. Three years ago it was a bit higher at 21.0%. Average ROIC for the last three years was 18.3%.
Solium Capital Inc's Net Income margin decreased slightly on 0.600 pp from 12.8% to 12.2% in 2014. In the last 3 years Net Income margin surged on 6.30 pp from 5.90% in 2011 to 12.2% in 2014.
Solium Capital Inc operates at ROE of 10.6%. It's average level of ROE for the last three years was 17.2%.
Capital expenditures (CAPEX)
In FY2014 Solium Capital Inc had CAPEX/Revenue of 1.76%. CAPEX/Revenue dropped on 2.22 pp from 3.98% in 2011 to 1.76% in 2014. For the last three years the average CAPEX/Revenue was 1.47%.
Leverage (Debt)
Solium Capital Inc has negative net debt at -2.7x Net Debt/EBITDA - at the same time with high growth. In the last 3 years the company showed fast leverage growth of 1.10x from -1.55x in 2011 to -2.66x in 2014.
Valuation vs. comparable companies
The market closed today at 15.8x EV/EBITDA for Solium Capital Inc which is 3.25% lower than 16.3x Communications peer group avearge calculated on the basis of 132 companies. The market closed today at 36.8x P/E for Solium Capital Inc which is 2.41% higher than 35.9x Communications peer group avearge calculated on the basis of 13 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The market closed today at 17.0x EV/(EBITDA-CAPEX) for Solium Capital Inc which is 819% higher than 1.9x Communications peer group avearge calculated on the basis of 16 companies.
Peers in Communications
Below you can find Solium Capital Inc 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 ($WAN) | | 9.5% | 13.1% | 20.0% | 39.1% |
| |
|---|
| Median (41 companies) | | 6.6% | 5.1% | 2.6% | 3.7% |
|---|
| Solium Capital Inc ($SUM) | | 70.9% | 9.4% | 35.2% | 16.3% |
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 ($STC) | 74.0% | 74.5% | 68.8% | | 66.9% |
| |
|---|
| Median (33 companies) | 41.1% | 43.3% | 43.7% | 43.2% | 45.3% |
|---|
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Manitoba Telecom Services Inc ($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 (41 companies) | 14.3% | 13.8% | 17.4% | 17.3% | 16.6% |
|---|
| Solium Capital Inc ($SUM) | 18.3% | 23.7% | 23.6% | 24.7% | 24.3% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Newfoundland Capital Corp Ltd ($NCC.B) | 2.5% | | 8.7% | 5.5% | 76.8% |
| Axia NetMedia Corp ($AXX) | 36.8% | 10.7% | 30.8% | 27.2% | 27.0% |
| TeraGo Inc ($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% |
| |
|---|
| Median (42 companies) | 4.2% | 4.6% | 3.1% | 3.5% | 3.3% |
|---|
| Solium Capital Inc ($SUM) | 5.9% | 4.0% | 0.8% | 1.8% | 1.8% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Tucows Inc ($TC) | 7.7% | 12.8% | 17.7% | 22.5% | 35.4% |
| Points International Ltd ($PTS) | 17.4% | 20.7% | 14.9% | 15.0% | 21.2% |
| NeuLion Inc ($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% |
| |
|---|
| Median (43 companies) | 7.4% | 6.3% | 8.6% | 8.2% | 8.3% |
|---|
| Solium Capital Inc ($SUM) | 18.2% | 21.0% | 19.4% | 19.0% | 16.6% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Plaintree Systems Inc ($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 |
| Quebecor Inc ($QBR.B) | 2.0x | 2.0x | 3.7x | 3.9x | 4.2x |
| Postmedia Network Canada Corp ($PNC.B) | | 2.9x | 3.3x | 3.4x | 4.2x |
| |
|---|
| Median (35 companies) | 1.7x | 1.2x | 1.4x | 1.4x | 1.6x |
|---|
| Solium Capital Inc ($SUM) | -2.5x | -1.6x | -1.1x | -1.5x | -2.7x |
