Corus Entertainment Inc reports 117% Net Income decline and 2.1% Revenue decline
22.10.2015 • About Corus Entertainment Inc (
$CJR.B) • By InTwits
Corus Entertainment Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 34.0% in FY2015 vs. 34.8% in FY2014 vs. 34.2% in FY2011
- Corus Entertainment Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.6%. At the same time it's a lot of higher than industry average of 8.7%.
- CAPEX is quite volatile: 16.7 in FY2015, 12.0 in FY2014, 13.0 in FY2013, 19.2 in FY2012, 46.0 in FY2011
- The company has business model with average profitability: ROIC is at 10.9%
- It operates with high leverage: Net Debt/EBITDA is 2.8x while industry average is -0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Corus Entertainment Inc ($CJR.B) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 825.2 | 842.3 | 803.5 | 833.0 | 815.3 | -2.1% |
| Gross Profit | 285.9 | 290.0 | 270.0 | 289.6 | 277.2 | -4.3% |
| EBITDA | 282.2 | 287.7 | 270.0 | 289.6 | 277.2 | -4.3% |
| Net Income | 146.5 | 148.7 | 159.9 | 150.4 | -25.2 | -116.7% |
Balance Sheet
|
|---|
| Cash | 55.9 | 24.6 | 86.1 | 11.6 | 37.4 | 223.0% |
| Short Term Debt | 0.0 | 0.0 | 2.1 | 2.6 | 150.0 | 5,586.1% |
| Long Term Debt | 600.8 | 518.3 | 542.1 | 878.3 | 651.0 | -25.9% |
Cash flow
|
|---|
| Capex | 46.0 | 19.2 | 13.0 | 12.0 | 16.7 | 39.2% |
Ratios
|
|---|
| Revenue growth | 7.5% | 2.1% | -4.6% | 3.7% | -2.1% | |
| EBITDA growth | 4.5% | 1.9% | -6.1% | 7.3% | -4.3% | |
| Gross Margin | 34.6% | 34.4% | 33.6% | 34.8% | 34.0% | -0.8% |
| EBITDA Margin | 34.2% | 34.2% | 33.6% | 34.8% | 34.0% | -0.8% |
| Net Income Margin | 17.8% | 17.7% | 19.9% | 18.1% | -3.1% | -21.1% |
| CAPEX, % of revenue | 5.6% | 2.3% | 1.6% | 1.4% | 2.0% | 0.6% |
| ROIC | 14.6% | 14.8% | 13.3% | 12.4% | 10.9% | -1.5% |
| ROE | 14.7% | 13.8% | 13.8% | 12.1% | -2.0% | -14.1% |
| Net Debt/EBITDA | 1.9x | 1.7x | 1.7x | 3.0x | 2.8x | -0.2x |
Revenue and profitability
The company's Revenue decreased on 2.1% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 0.77 pp from 34.8% to 34.0% in FY2015.
Gross Margin decreased slightly on 0.77 pp from 34.8% to 34.0% in FY2015.
Net Income marign dropped on 21.1 pp from 18.1% to -3.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Corus Entertainment Inc had CAPEX/Revenue of 2.0%. Corus Entertainment Inc showed almost no change in CAPEX/Revenue from FY2012 to FY2015. Average CAPEX/Revenue for the last three years was 1.7%.
Return on investment
The company operates at low but positive ROIC (10.90%) and negative ROE (-2.02%). ROIC decreased slightly on 1.5 pp from 12.4% to 10.9% in FY2015. ROE dropped on 14.1 pp from 12.1% to -2.0% in FY2015.
Leverage (Debt)
Debt level is 2.8x Net Debt / EBITDA and 2.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from 3.0x to 2.8x in FY2015. Debt decreased on 9.1% in FY2015 while cash jumped on 223% in FY2015.
Management team
Douglas D Murphy "Doug" is a Corus Entertainment Inc's CEO. Douglas D Murphy "Doug" is a founder and has spent 3 years at the company.
Appendix 1: Peers in Communications
Below we provide Corus Entertainment Inc benchmarking against other companies in Communications 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 |
|---|
| Telehop Communications Inc ($HOP) | -11.7% | -13.1% | -7.8% | 105.7% | |
| Wi2Wi Corp ($YTY) | | | 11.5% | 100.3% | |
| BSM Technologies Inc ($GPS) | | | 39.1% | 55.5% | |
| Plaintree Systems Inc ($NPT) | | 14.5% | 9.1% | 50.8% | -7.1% |
| Aimia Inc ($AIM) | 2.9% | 6.3% | -25.6% | 47.5% | |
| |
|---|
| Median (49 companies) | 6.8% | 5.0% | 2.1% | 1.9% | 1.5% |
|---|
| Corus Entertainment Inc ($CJR.B) | | 2.1% | -4.6% | 3.7% | -2.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanted Technologies Corp ($WAN) | 86.6% | 90.5% | 93.2% | 94.3% | 95.6% |
| CounterPath Corp ($CCV) | 74.1% | 80.0% | 85.1% | 80.9% | 81.5% |
| Mediagrif Interactive Technologies Inc ($MDF) | 78.2% | 79.8% | 79.8% | 78.8% | 80.1% |
| NeuLion Inc ($NLN) | 45.2% | 53.6% | 63.8% | 70.2% | |
| Sangoma Technologies Corp ($STC) | 74.5% | 68.8% | | 66.9% | 67.2% |
| |
|---|
| Median (40 companies) | 43.3% | 43.3% | 42.7% | 42.5% | 58.3% |
|---|
| Corus Entertainment Inc ($CJR.B) | 34.6% | 34.4% | 33.6% | 34.8% | 34.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Manitoba Telecom Services Inc ($MBT) | 33.7% | 34.3% | 33.7% | 47.4% | |
| Cogeco Cable Inc ($CCA) | 45.8% | 46.0% | 44.9% | 43.8% | |
| Cogeco Inc ($CGO) | 28.1% | 43.2% | 43.5% | 43.3% | |
| Shaw Communications Inc ($SJR.B) | 43.3% | 42.7% | 43.3% | 42.1% | 44.6% |
| BCE Inc ($BCE) | 37.0% | 38.8% | 37.7% | 38.4% | |
| |
|---|
| Median (49 companies) | 14.1% | 13.5% | 14.1% | 11.7% | 6.9% |
|---|
| Corus Entertainment Inc ($CJR.B) | 34.2% | 34.2% | 33.6% | 34.8% | 34.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newfoundland Capital Corp Ltd ($NCC.B) | | 8.7% | 5.5% | 76.8% | |
| Axia NetMedia Corp ($AXX) | 10.7% | 30.8% | 27.2% | 27.0% | |
| UrtheCast Corp ($UR) | | | | 26.5% | |
| TeraGo Inc ($TGO) | 21.6% | 20.9% | 21.5% | 23.1% | |
| Manitoba Telecom Services Inc ($MBT) | 16.3% | 19.8% | 18.1% | 22.4% | |
| |
|---|
| Median (52 companies) | 4.3% | 2.3% | 3.3% | 2.3% | 2.2% |
|---|
| Corus Entertainment Inc ($CJR.B) | 5.6% | 2.3% | 1.6% | 1.4% | 2.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi2Wi Corp ($YTY) | -28.5% | -166.9% | | 136.7% | |
| Tucows Inc ($TC) | 12.8% | 17.7% | 22.5% | 35.4% | |
| Asian Television Network International Ltd ($SAT) | 102.7% | 34.6% | 23.6% | 23.4% | |
| Points International Ltd ($PTS) | 20.7% | 14.9% | 15.0% | 21.2% | |
| NeuLion Inc ($NLN) | -62.1% | -55.8% | -10.3% | 18.5% | |
| |
|---|
| Median (53 companies) | 6.3% | 8.0% | 8.2% | 8.0% | -1.3% |
|---|
| Corus Entertainment Inc ($CJR.B) | 14.6% | 14.8% | 13.3% | 12.4% | 10.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Plaintree Systems Inc ($NPT) | 0.7x | | | 124.2x | 3.9x |
| Advantex Marketing International Inc ($ADX) | | 4.8x | 2.2x | 5.0x | |
| MDC Partners Inc ($MDZ.A) | 7.3x | 12.4x | 112.6x | 4.6x | |
| Quebecor Inc ($QBR.B) | 2.0x | 3.7x | 3.9x | 4.2x | |
| Postmedia Network Canada Corp ($PNC.B) | 2.9x | 3.3x | 3.4x | 4.2x | |
| |
|---|
| Median (41 companies) | 0.9x | 1.4x | 1.3x | 1.4x | 0.3x |
|---|
| Corus Entertainment Inc ($CJR.B) | 1.9x | 1.7x | 1.7x | 3.0x | 2.8x |
