Wall Financial Corp CAPEX surged on 162% in 2015 while Revenue dropped on 75.3%
24.04.2015 • About Wall Financial Corp (
$WFC) • By InTwits
Wall Financial Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Wall Financial Corp is a company in decline: FY2015 revenue growth was -75.3%, 5 years revenue CAGR was -16.6%
- Wall Financial Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.3%. At the same time it's a lot of higher than industry average of 9.5%.
- CAPEX is quite volatile: 44.3 in FY2015, 16.9 in FY2014, 7.0 in FY2013, 37.3 in FY2012, 3.7 in FY2011
- The company has potentially unprofitable business model: ROIC is at 2.1%
- It operates with high leverage: Net Debt/EBITDA is 20.1x while industry average is 5.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Wall Financial Corp ($WFC) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 203.8 | 275.5 | 71.3 | 274.9 | 67.8 | -75.3% |
| EBITDA | 45.5 | 73.5 | 17.5 | 63.4 | 18.3 | -71.1% |
| Net Income | 29.7 | 24.7 | 11.0 | 25.3 | 7.8 | -69.4% |
Balance Sheet
|
|---|
| Cash | 17.1 | 9.0 | 10.7 | 15.0 | 39.8 | 166.0% |
| Short Term Debt | 0.0 | 0.0 | 42.0 | 80.8 | 50.8 | -37.1% |
| Long Term Debt | 301.6 | 258.1 | 317.1 | 228.9 | 357.9 | 56.4% |
Cash flow
|
|---|
| Capex | 3.7 | 37.3 | 7.0 | 16.9 | 44.3 | 162.0% |
Ratios
|
|---|
| Revenue growth | 21.7% | 35.2% | -74.1% | 285.4% | -75.3% | |
| EBITDA growth | 22.1% | 61.4% | -76.2% | 262.5% | -71.1% | |
| EBITDA Margin | 22.3% | 26.7% | 24.5% | 23.1% | 27.0% | 4.0% |
| Net Income Margin | 14.6% | 9.0% | 15.5% | 9.2% | 11.4% | 2.2% |
| CAPEX, % of revenue | 1.8% | 13.5% | 9.8% | 6.1% | 65.3% | 59.2% |
| ROIC | 8.4% | 17.3% | 3.0% | 12.7% | 2.1% | -10.6% |
| ROE | 28.7% | 29.5% | 14.0% | 28.7% | 8.6% | -20.1% |
| Net Debt/EBITDA | 6.2x | 3.4x | 19.9x | 4.6x | 20.1x | 15.5x |
Revenue and profitability
The company's Revenue dropped on 75.3% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.0 pp from 23.1% to 27.0% in FY2015.
Net Income marign increased on 2.2 pp from 9.2% to 11.4% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Wall Financial Corp had CAPEX/Revenue of 65.3%. The company's CAPEX/Revenue jumped on 51.8 pp from 13.5% in FY2012 to 65.3% in FY2015. It's average CAPEX/Revenue for the last three years was 27.1%.Wall Financial Corp has spent a lot to CAPEX (242% of EBITDA) which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (2.08%) and ROE (8.63%). ROIC dropped on 10.6 pp from 12.7% to 2.1% in FY2015. ROE dropped on 20.1 pp from 28.7% to 8.6% in FY2015.
Leverage (Debt)
Debt level is 20.1x Net Debt / EBITDA and 22.3x Debt / EBITDA. Net Debt / EBITDA jumped on 15.5x from 4.6x to 20.1x in FY2015. Debt jumped on 32.0% in FY2015 while cash jumped on 166% in FY2015.
Appendix 1: Peers in Financial
Below you can find Wall Financial Corp benchmarking vs. other companies in Financial 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Westaim Corp/The ($WED) | 35.7% | -99.9% | 38.0% | 5,680.8% | |
| Element Financial Corp ($EFN) | | | 206.6% | 189.1% | |
| Gluskin Sheff + Associates Inc ($GS) | 4.1% | -39.1% | 60.6% | 97.9% | |
| Sun Life Financial Inc ($SLF) | -20.0% | -11.5% | -21.0% | 85.7% | |
| Fairfax Financial Holdings Ltd ($FFH) | 25.3% | 7.3% | -25.9% | 68.5% | |
| |
|---|
| Median (70 companies) | 11.6% | 7.3% | 7.1% | 7.9% | -34.2% |
|---|
| Wall Financial Corp ($WFC) | | 35.2% | -74.1% | 285.4% | -75.3% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Olympia Financial Group Inc ($OLY) | 85.3% | 80.9% | 82.6% | 83.2% | |
| Morguard Corp ($MRC) | 74.8% | 74.0% | 69.9% | 68.6% | |
| Brookfield Asset Management Inc ($BAM.A) | 34.3% | 25.6% | 30.7% | 28.6% | |
| Onex Corp ($OCX) | 20.0% | 20.1% | 26.2% | 27.9% | |
| Tuckamore Capital Management Inc ($TX) | | 19.3% | 21.0% | 20.5% | |
| |
|---|
| Median (10 companies) | 25.2% | 25.0% | 25.2% | 19.7% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Firm Capital Mortgage Investment Corp ($FC) | 88.7% | 87.6% | 87.9% | 88.8% | |
| Equitable Group Inc ($EQB) | 89.7% | 88.1% | 87.4% | 86.0% | |
| Alaris Royalty Corp ($AD) | 97.0% | 81.3% | 61.8% | 81.8% | |
| Brookfield Real Estate Services Inc ($BRE) | 77.1% | 77.7% | 77.9% | 78.4% | |
| First National Financial Corp ($FN) | 66.1% | 67.8% | 76.5% | 77.1% | |
| |
|---|
| Median (45 companies) | 36.7% | 32.7% | 32.3% | 41.4% | -1,305.2% |
|---|
| Wall Financial Corp ($WFC) | 22.3% | 26.7% | 24.5% | 23.1% | 27.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Killam Properties Inc ($KMP) | 73.6% | 80.7% | 114.1% | 143.5% | |
| Dundee Corp ($DC.A) | | 10.3% | 14.1% | 88.8% | 123.6% |
| StorageVault Canada Inc ($SVI) | 29.6% | 150.5% | 73.3% | 79.1% | |
| Mainstreet Equity Corp ($MEQ) | 152.4% | 115.8% | 62.3% | 75.8% | |
| First Capital Realty Inc ($FCR) | 102.8% | 127.9% | 76.1% | 73.8% | |
| |
|---|
| Median (71 companies) | 1.3% | 1.4% | 0.8% | 1.0% | 61.8% |
|---|
| Wall Financial Corp ($WFC) | 1.8% | 13.5% | 9.8% | 6.1% | 65.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gluskin Sheff + Associates Inc ($GS) | 71.3% | 21.0% | 82.9% | 153.9% | |
| Brookfield Real Estate Services Inc ($BRE) | 17.1% | 26.0% | 31.0% | 47.0% | |
| Redishred Capital Corp ($KUT) | -3.9% | -24.5% | 6.5% | 15.8% | |
| IGM Financial Inc ($IGM) | 15.3% | 14.2% | 14.2% | 13.7% | |
| Street Capital Group Inc ($SCB) | 2.3% | 10.9% | 11.0% | 13.4% | |
| |
|---|
| Median (73 companies) | 5.3% | 4.8% | 4.6% | 4.9% | |
|---|
| Wall Financial Corp ($WFC) | 8.4% | 17.3% | 3.0% | 12.7% | 2.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| First National Financial Corp ($FN) | 37.6x | 34.3x | 33.7x | 40.9x | |
| Element Financial Corp ($EFN) | | 140.2x | 31.9x | 37.6x | |
| Gazit-Globe Ltd ($GZT) | 14.8x | 12.8x | 12.7x | 15.3x | |
| Morguard Corp ($MRC) | 7.5x | 8.9x | | 14.2x | |
| StorageVault Canada Inc ($SVI) | 6.0x | 11.2x | 9.7x | 13.6x | |
| |
|---|
| Median (40 companies) | 4.1x | 5.5x | 4.4x | 4.2x | 0.4x |
|---|
| Wall Financial Corp ($WFC) | 6.2x | 3.4x | 19.9x | 4.6x | 20.1x |
