Shaw Communications Inc Debt surged on 20.9% in 2015 while Revenue dropped on 14.4%
22.10.2015 • About Shaw Communications Inc (
$SJR.B) • By InTwits
Shaw Communications Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Shaw Communications Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.1%. At the same time it's a lot of higher than industry average of 8.2%.
- CAPEX is quite volatile: 1,811 in 2015, 1,412 in 2014, 880 in 2013, 584 in 2012, 477 in 2011
- The company has business model with low profitability: ROIC is at 9.6%
- It operates with high leverage: Net Debt/EBITDA is 2.6x while industry average is -0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shaw Communications Inc ($SJR.B) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 4,741 | 4,998 | 5,142 | 5,241 | 4,486 | -14.4% |
| Gross Profit | 2,051 | 2,127 | 2,220 | 2,262 | 2,037 | -9.9% |
| EBITDA | 2,055 | 2,132 | 2,224 | 2,207 | 2,002 | -9.3% |
| Net Income | 451 | 728 | 746 | 857 | 856 | -0.1% |
Balance Sheet
|
|---|
| Cash | 443 | 427 | 422 | 637 | 398 | -37.5% |
| Short Term Debt | 8 | 451 | 998 | 0 | 608 | |
| Long Term Debt | 5,256 | 4,812 | 3,868 | 4,690 | 5,061 | 7.9% |
Cash flow
|
|---|
| Capex | 825 | 908 | 934 | 1,032 | 995 | -3.6% |
Ratios
|
|---|
| Revenue growth | 27.5% | 5.4% | 2.9% | 1.9% | -14.4% | |
| EBITDA growth | 23.5% | 3.7% | 4.3% | -0.8% | -9.3% | |
| Gross Margin | 43.3% | 42.6% | 43.2% | 43.2% | 45.4% | 2.2% |
| EBITDA Margin | 43.3% | 42.7% | 43.3% | 42.1% | 44.6% | 2.5% |
| Net Income Margin | 9.5% | 14.6% | 14.5% | 16.4% | 19.1% | 2.7% |
| CAPEX, % of revenue | 17.4% | 18.2% | 18.2% | 19.7% | 22.2% | 2.5% |
| ROIC | 14.1% | 12.7% | 12.9% | 13.3% | 9.6% | -3.7% |
| ROE | 15.3% | 21.7% | 19.9% | 20.3% | 17.7% | -2.6% |
| Net Debt/EBITDA | 2.3x | 2.3x | 2.0x | 1.8x | 2.6x | 0.8x |
Revenue and profitability
The company's Revenue dropped on 14.4% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.5 pp from 42.1% to 44.6% in FY2015.
Gross Margin increased on 2.2 pp from 43.2% to 45.4% in FY2015.
Net Income marign increased on 2.7 pp from 16.4% to 19.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Shaw Communications Inc's CAPEX/Revenue was 22.2% in FY2015. The company showed CAPEX/Revenue growth of 4.0 pp from 18.2% in FY2012 to 22.2% in FY2015. Average CAPEX/Revenue for the last three years was 20.0%.
Return on investment
The company operates at good ROE (17.68%) while ROIC is low (9.57%). ROIC decreased on 3.7 pp from 13.3% to 9.6% in FY2015. ROE decreased on 2.6 pp from 20.3% to 17.7% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is 2.8x. Net Debt / EBITDA surged on 0.8x from 1.8x to 2.6x in FY2015. Debt surged on 20.9% in FY2015 while cash dropped on 37.5% in FY2015.
Management team
Shaw Communications Inc's CEO Bradley S Shaw "Brad" is a founder and has spent 8 years at the company. Shaw Communications Inc's CFO Vito Culmone has spent 3 years at the company.
Appendix 1: Peers in Communications
Below you can find Shaw Communications 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, %
| 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 ($AIM) | 2.9% | 6.3% | -25.6% | 47.5% | |
| |
|---|
| Median (49 companies) | 6.8% | 2.5% | 1.8% | 3.1% | 1.5% |
|---|
| Shaw Communications Inc ($SJR.B) | | 5.4% | 2.9% | 1.9% | -14.4% |
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 ($STC) | 74.5% | 68.8% | | 66.9% | 67.2% |
| |
|---|
| Median (40 companies) | 43.2% | 43.3% | 42.5% | 41.8% | 58.3% |
|---|
| Shaw Communications Inc ($SJR.B) | 43.3% | 42.6% | 43.2% | 43.2% | 45.4% |
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 ($CGO) | 28.1% | 43.2% | 43.5% | 43.3% | |
| BCE Inc ($BCE) | 37.0% | 38.8% | 37.7% | 38.4% | |
| Rogers Communications Inc ($RCI.A) | 38.0% | 37.3% | 38.4% | 37.9% | |
| |
|---|
| Median (49 companies) | 14.1% | 13.5% | 14.1% | 11.7% | 6.9% |
|---|
| Shaw Communications Inc ($SJR.B) | 43.3% | 42.7% | 43.3% | 42.1% | 44.6% |
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 ($MBT) | 16.3% | 19.8% | 18.1% | 22.4% | |
| |
|---|
| Median (52 companies) | 4.3% | 2.2% | 3.0% | 2.1% | 2.2% |
|---|
| Shaw Communications Inc ($SJR.B) | 17.4% | 18.2% | 18.2% | 19.7% | 22.2% |
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 ($NLN) | -62.1% | -55.8% | -10.3% | 18.5% | |
| |
|---|
| Median (53 companies) | 6.3% | 8.0% | 8.2% | 8.0% | -1.3% |
|---|
| Shaw Communications Inc ($SJR.B) | 14.1% | 12.7% | 12.9% | 13.3% | 9.6% |
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 ($PNC.B) | 2.9x | 3.3x | 3.4x | 4.2x | |
| |
|---|
| Median (41 companies) | 0.9x | 1.4x | 1.3x | 1.4x | 0.3x |
|---|
| Shaw Communications Inc ($SJR.B) | 2.3x | 2.3x | 2.0x | 1.8x | 2.6x |
