Reitmans Canada Ltd revenue decreased on 2.2% in 2015 and EBITDA Margin showed almost no change
01.04.2015 • About Reitmans Canada Ltd (
$RET) • By InTwits
Reitmans Canada Ltd reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Reitmans Canada Ltd is a company in decline: FY2015 revenue growth was -2.2%, 5 years revenue CAGR was -2.3%
- EBITDA Margin is quite volatile: 7.1% in FY2015, 7.0% in FY2014, 9.0% in FY2013, 12.4% in FY2012, 17.4% in FY2011
- Reitmans Canada Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%. At the same time it's in pair with industry average of 4.4%.
- CAPEX is quite volatile: 29.0 in FY2015, 34.5 in FY2014, 84.4 in FY2013, 59.2 in FY2012, 46.9 in FY2011
- The company has potentially unprofitable business model: ROIC is at 3.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Reitmans Canada Ltd ($RET) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,059 | 1,019 | 1,001 | 960 | 939 | -2.2% |
| Gross Profit | 708 | 656 | 628 | 595 | 567 | -4.6% |
| SG&A | 584 | 594 | 598 | 592 | 555 | -6.2% |
| EBITDA | 184 | 127 | 90 | 67 | 67 | -0.4% |
| Net Income | 89 | 48 | 26 | 11 | 13 | 24.4% |
Balance Sheet
|
|---|
| Cash | 230 | 197 | 98 | 122 | 140 | 14.4% |
| Short Term Debt | 1 | 1 | 2 | 2 | 2 | 6.5% |
| Long Term Debt | 10 | 9 | 7 | 5 | 4 | -33.4% |
Cash flow
|
|---|
| Capex | 47 | 59 | 84 | 35 | 29 | -16.1% |
Ratios
|
|---|
| Revenue growth | 0.2% | -3.7% | -1.9% | -4.0% | -2.2% | |
| EBITDA growth | 16.0% | -31.0% | -28.9% | -25.9% | -0.4% | |
| Gross Margin | 66.9% | 64.4% | 62.8% | 61.9% | 60.4% | -1.6% |
| EBITDA Margin | 17.4% | 12.4% | 9.0% | 7.0% | 7.1% | 0.1% |
| Net Income Margin | 8.4% | 4.7% | 2.6% | 1.1% | 1.4% | 0.3% |
| SG&A, % of revenue | 55.2% | 58.3% | 59.8% | 61.6% | 59.1% | -2.6% |
| CAPEX, % of revenue | 4.4% | 5.8% | 8.4% | 3.6% | 3.1% | -0.5% |
| ROIC | 24.2% | 12.5% | 6.7% | 0.7% | 3.1% | 2.4% |
| ROE | 17.4% | 9.5% | 5.6% | 2.5% | 3.2% | 0.7% |
| Net Debt/EBITDA | -1.2x | -1.5x | -1.0x | -1.7x | -2.0x | -0.3x |
Revenue and profitability
Reitmans Canada Ltd's Revenue decreased on 2.2% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 0.62 pp from 7.5% to 6.9% in FY2015.
Gross Margin decreased slightly on 1.6 pp from 61.9% to 60.4% in FY2015. SG&A as a % of Revenue decreased on 2.6 pp from 61.6% to 59.1% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Reitmans Canada Ltd had CAPEX/Revenue of 3.1%. CAPEX/Revenue decreased on 2.7 pp from 5.8% in FY2012 to 3.1% in FY2015. It's average level of CAPEX/Revenue for the last three years was 5.0%.
Return on investment
The company operates at low ROIC (3.12%) and ROE (3.18%). ROIC increased on 2.4 pp from 0.74% to 3.1% in FY2015. ROE increased slightly on 0.72 pp from 2.5% to 3.2% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.0x and Debt / EBITDA is 0.1x. Net Debt / EBITDA dropped on 0.3x from -1.7x to -2.0x in FY2015. Debt dropped on 23.9% in FY2015 while cash surged on 14.4% in FY2015.
Appendix 1: Peers in Consumer, Cyclical
Below we provide Reitmans Canada Ltd benchmarking against other companies in Consumer, Cyclical 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Amaya Inc ($AYA) | 216.4% | 311.5% | 85.2% | 254.0% | |
| Partner Jet Corp ($PJT) | -19.9% | -15.2% | 1.2% | 119.7% | |
| Kelso Technologies Inc ($KLS) | 80.5% | 577.5% | 487.8% | 81.4% | |
| XPEL Technologies Corp ($DAP.U) | 46.3% | 76.6% | 67.7% | 65.5% | |
| Holloway Lodging Corp ($HLC) | 5.4% | -24.6% | 2.7% | 62.7% | |
| |
|---|
| Median (62 companies) | 10.9% | 5.4% | 5.3% | 6.7% | 10.4% |
|---|
| Reitmans Canada Ltd ($RET) | | -3.7% | -1.9% | -4.0% | -2.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Restaurant Brands International Inc ($QSR) | | | 69.7% | 87.0% | |
| Imvescor Restaurant Group Inc ($IRG) | 96.2% | 94.2% | 89.7% | 84.9% | |
| DEQ Systems Corp ($DEQ) | 74.3% | 77.5% | 78.4% | 84.7% | |
| Second Cup Ltd/The ($SCU) | 91.1% | 86.6% | 85.1% | 72.7% | |
| New Look Vision Group Inc ($BCI) | 72.3% | 71.8% | 72.6% | 72.6% | |
| |
|---|
| Median (55 companies) | 36.1% | 34.1% | 31.6% | 32.5% | 32.6% |
|---|
| Reitmans Canada Ltd ($RET) | 66.9% | 64.4% | 62.8% | 61.9% | 60.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Westshore Terminals Investment Corp ($WTE) | | 49.7% | 65.9% | 60.9% | 59.6% |
| Gamehost Inc ($GH) | 44.2% | 46.1% | 45.7% | 45.9% | |
| Great Canadian Gaming Corp ($GC) | 34.1% | 16.8% | 41.1% | 40.1% | |
| Amaya Inc ($AYA) | -5.7% | 7.2% | 38.2% | 39.3% | |
| MTY Food Group Inc ($MTY) | 32.2% | 36.3% | 38.7% | 37.0% | |
| |
|---|
| Median (60 companies) | 8.8% | 8.2% | 10.5% | 10.3% | 10.9% |
|---|
| Reitmans Canada Ltd ($RET) | 17.4% | 12.4% | 9.0% | 7.0% | 7.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 32.5% | |
| WestJet Airlines Ltd ($WJA) | 3.9% | 7.9% | 19.5% | 18.6% | |
| Exchange Income Corp ($EIF) | 8.2% | 7.9% | 15.8% | 15.5% | |
| Holloway Lodging Corp ($HLC) | 3.4% | 8.2% | 6.7% | 14.8% | |
| Kelso Technologies Inc ($KLS) | 79.2% | 0.4% | 0.7% | 13.5% | |
| |
|---|
| Median (63 companies) | 2.6% | 2.6% | 2.6% | 2.2% | 3.2% |
|---|
| Reitmans Canada Ltd ($RET) | 4.4% | 5.8% | 8.4% | 3.6% | 3.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Partner Jet Corp ($PJT) | -30.7% | -51.6% | -50.8% | 85.1% | |
| Kelso Technologies Inc ($KLS) | -121.3% | | | 48.8% | |
| XPEL Technologies Corp ($DAP.U) | 52.9% | 54.7% | 57.5% | 43.2% | |
| Westshore Terminals Investment Corp ($WTE) | | 24.0% | 37.8% | 35.0% | 38.3% |
| Iplayco Corp Ltd ($IPC) | -35.4% | 23.0% | 58.5% | 33.6% | |
| |
|---|
| Median (63 companies) | 10.9% | 10.2% | 12.4% | 10.2% | 5.6% |
|---|
| Reitmans Canada Ltd ($RET) | 24.2% | 12.5% | 6.7% | 0.7% | 3.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Restaurant Brands International Inc ($QSR) | | | 3.8x | 33.6x | |
| Hudson's Bay Co ($HBC) | 8.7x | 3.8x | 3.6x | 19.1x | |
| Amaya Inc ($AYA) | | 17.9x | 1.8x | 13.5x | |
| Dorel Industries Inc ($DII.A) | 1.6x | 1.5x | 2.8x | 12.2x | |
| Performance Sports Group Ltd ($PSG) | | 2.6x | 3.5x | 12.2x | 6.5x |
| |
|---|
| Median (54 companies) | 1.3x | 1.4x | 1.8x | 1.8x | 1.5x |
|---|
| Reitmans Canada Ltd ($RET) | -1.2x | -1.5x | -1.0x | -1.7x | -2.0x |
