Reko International Group Inc reports 132% CAPEX growth and 24.2% Revenue growth
13.10.2015 • About Reko International Group Inc (
$REK) • By InTwits
Reko International Group Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 17.1% in FY2015 vs. 13.0% in FY2014 vs. -0.4% in FY2011
- EBITDA Margin is quite volatile: 17.1% in FY2015, 13.0% in FY2014, 9.7% in FY2013, 8.8% in FY2012, -0.4% in FY2011
- Reko International Group Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.7%. At the same time it's in pair with industry average of 6.9%.
- CAPEX is quite volatile: 7.2 in FY2015, 3.1 in FY2014, 1.5 in FY2013, 2.0 in FY2012, 0.89 in FY2011
- The company has highly profitable business model: ROIC is at 12.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.4x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Reko International Group Inc ($REK) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 39.863 | 42.091 | 40.674 | 38.894 | 48.296 | 24.2% |
| Gross Profit | 2.967 | 7.191 | 8.252 | 7.123 | 12.051 | 69.2% |
| SG&A | | | 4.307 | 4.730 | 6.349 | 34.2% |
| EBITDA | -0.147 | 3.692 | 3.945 | 5.063 | 8.235 | 62.7% |
| Net Income | -9.666 | 1.267 | 1.673 | 2.298 | 4.127 | 79.6% |
Balance Sheet
|
|---|
| Cash | 1.589 | 1.213 | 2.334 | 1.720 | 1.590 | -7.6% |
| Short Term Debt | 12.791 | 21.541 | 9.721 | 11.074 | 12.813 | 15.7% |
| Long Term Debt | 10.447 | 0.825 | 5.594 | 5.754 | 8.327 | 44.7% |
Cash flow
|
|---|
| Capex | 0.894 | 1.981 | 1.546 | 3.089 | 7.155 | 131.6% |
Ratios
|
|---|
| Revenue growth | -0.7% | 5.6% | -3.4% | -4.4% | 24.2% | |
| EBITDA growth | -92.2% | -2,611.6% | 6.9% | 28.3% | 62.7% | |
| Gross Margin | 7.4% | 17.1% | 20.3% | 18.3% | 25.0% | 6.6% |
| EBITDA Margin | -0.4% | 8.8% | 9.7% | 13.0% | 17.1% | 4.0% |
| Net Income Margin | -24.2% | 3.0% | 4.1% | 5.9% | 8.5% | 2.6% |
| SG&A, % of revenue | | | 10.6% | 12.2% | 13.1% | 1.0% |
| CAPEX, % of revenue | 2.2% | 4.7% | 3.8% | 7.9% | 14.8% | 6.9% |
| ROIC | -5.4% | 3.9% | 5.4% | 6.2% | 12.8% | 6.6% |
| ROE | -31.7% | 5.0% | 6.2% | 8.0% | 12.8% | 4.9% |
| Net Debt/EBITDA | | 5.7x | 3.3x | 3.0x | 2.4x | -0.6x |
Revenue and profitability
The company's Revenue jumped on 24.2% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.4 pp from 59.8% to 69.2% in 2015.
Gross Margin increased on 6.6 pp from 18.3% to 25.0% in FY2015. SG&A as a % of Revenue increased slightly on 0.98 pp from 12.2% to 13.1% in FY2015.
Net Income marign increased on 2.6 pp from 5.9% to 8.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 14.8% in FY2015. Reko International Group Inc showed fast CAPEX/Revenue growth of 10.1 pp from 4.7% in FY2012 to 14.8% in FY2015. It's average CAPEX/Revenue for the last three years was 8.9%.To deliver this fast growth Reko International Group Inc invested a large share of EBITDA (86.9%) to CAPEX.
Return on investment
The company operates at good ROIC (12.83%) and ROE (12.84%). ROIC increased on 6.6 pp from 6.2% to 12.8% in FY2015. ROE increased on 4.9 pp from 8.0% to 12.8% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.4x and Debt / EBITDA is 2.6x. Net Debt / EBITDA dropped on 0.6x from 3.0x to 2.4x in FY2015. Debt surged on 25.6% in FY2015 while cash decreased on 7.6% in FY2015.
Appendix 1: Peers in Industrial
Below you can find Reko International Group Inc benchmarking vs. other companies in Industrial 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 |
|---|
| Electrovaya Inc ($EFL) | 104.3% | -4.0% | -71.2% | 160.5% | |
| Enterprise Group Inc ($E) | 14.5% | 3.5% | 88.3% | 128.5% | |
| Carmanah Technologies Corp ($CMH) | 5.8% | -26.4% | -2.0% | 68.8% | |
| Exco Technologies Ltd ($XTC) | 22.4% | 19.7% | 0.9% | 50.5% | |
| Lumenpulse Inc ($LMP) | | 56.7% | 33.9% | 47.0% | 61.8% |
| |
|---|
| Median (91 companies) | 12.9% | 11.0% | 5.1% | 9.2% | 19.0% |
|---|
| Reko International Group Inc ($REK) | | 5.6% | -3.4% | -4.4% | 24.2% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| WSP Global Inc ($WSP) | 81.1% | 81.1% | 83.2% | 81.0% | |
| Pure Technologies Ltd ($PUR) | 75.7% | 77.9% | 78.0% | 77.5% | |
| Alarmforce Industries Inc ($AF) | 76.4% | 75.0% | 76.5% | 72.2% | |
| Epicore BioNetworks Inc ($EBN) | 59.0% | 60.8% | 63.2% | 64.1% | |
| FLYHT Aerospace Solutions Ltd ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | |
| |
|---|
| Median (87 companies) | 23.3% | 23.2% | 23.4% | 22.9% | 26.0% |
|---|
| Reko International Group Inc ($REK) | 7.4% | 17.1% | 20.3% | 18.3% | 25.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Canadian National Railway Co ($CNR) | 46.3% | 46.5% | 45.9% | 46.8% | |
| Canadian Pacific Railway Ltd ($CP) | 28.1% | 26.1% | 32.4% | 43.7% | |
| Vitreous Glass Inc ($VCI) | 29.0% | 31.4% | 32.2% | 37.8% | |
| Questor Technology Inc ($QST) | 25.1% | 25.7% | 34.9% | 34.1% | |
| Progressive Waste Solutions Ltd ($BIN) | 32.2% | 30.7% | 33.1% | 34.0% | |
| |
|---|
| Median (84 companies) | 8.2% | 9.3% | 8.1% | 7.1% | 10.0% |
|---|
| Reko International Group Inc ($REK) | -0.4% | 8.8% | 9.7% | 13.0% | 17.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cargojet Inc ($CJT.A) | 6.8% | 7.0% | 6.3% | 54.1% | |
| Newalta Corp ($NAL) | 17.2% | 21.7% | 34.5% | 35.1% | |
| Enterprise Group Inc ($E) | 3.6% | 17.4% | 27.2% | 32.7% | |
| ENTREC Corp ($ENT) | | 35.0% | 26.7% | 29.5% | |
| Horizon North Logistics Inc ($HNL) | 25.1% | 26.5% | 16.3% | 24.1% | |
| |
|---|
| Median (91 companies) | 2.7% | 3.0% | 3.6% | 3.1% | 2.8% |
|---|
| Reko International Group Inc ($REK) | 2.2% | 4.7% | 3.8% | 7.9% | 14.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vitreous Glass Inc ($VCI) | 26.1% | 30.5% | 32.3% | 48.3% | |
| Photon Control Inc ($PHO) | 10.1% | 21.0% | 44.4% | 38.0% | |
| SNC-Lavalin Group Inc ($SNC) | 14.6% | 10.7% | 4.0% | 35.2% | |
| Alarmforce Industries Inc ($AF) | 18.3% | 5.3% | 24.0% | 33.9% | |
| Epicore BioNetworks Inc ($EBN) | 24.8% | 28.1% | 16.1% | 32.5% | |
| |
|---|
| Median (92 companies) | 9.1% | 9.7% | 8.5% | 8.8% | 9.3% |
|---|
| Reko International Group Inc ($REK) | -5.4% | 3.9% | 5.4% | 6.2% | 12.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sigma Industries Inc ($SSG) | | 4.4x | 11.3x | 225.9x | 2.9x |
| H2O Innovation Inc ($HEO) | | | 4.2x | 73.2x | 1.6x |
| Grand Power Logistics Group Inc ($GPW) | | 47.8x | | 53.1x | |
| Cargojet Inc ($CJT.A) | 1.8x | 1.5x | 1.5x | 31.5x | |
| IBI Group Inc ($IBG) | 4.2x | 6.5x | | 8.3x | |
| |
|---|
| Median (71 companies) | 1.1x | 1.5x | 1.5x | 1.3x | 1.7x |
|---|
| Reko International Group Inc ($REK) | | 5.7x | 3.3x | 3.0x | 2.4x |
