Cogeco Inc Debt jumped on 19.9% in 2015 and Net Debt / EBITDA surged on 0.3x from 3.0x to 3.3x
28.10.2015 • About Cogeco Inc (
$CGO) • By InTwits
Cogeco Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cogeco Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 21.9%. At the same time it's a lot of higher than industry average of 8.2%.
- CAPEX is quite volatile: 425 in 2015, 658 in 2014, 579 in 2013, 188 in 2012, 158 in 2011
- The company has business model with low profitability: ROIC is at 9.3%
- It operates with high leverage: Net Debt/EBITDA is 3.3x while industry average is -0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cogeco Inc ($CGO) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,267 | 1,406 | 1,834 | 2,096 | 2,187 | 4.3% |
| Gross Profit | 1,063 | | | | | |
| EBITDA | 356 | 607 | 799 | 908 | 968 | 6.6% |
| Net Income | -220 | 77 | 64 | 68 | 90 | 32.4% |
Balance Sheet
|
|---|
| Cash | 55 | 216 | 44 | 64 | 164 | 157.2% |
| Short Term Debt | 7 | 2 | 28 | 36 | 298 | 736.7% |
| Long Term Debt | 1,017 | 1,145 | 2,985 | 2,783 | 3,081 | 10.7% |
Cash flow
|
|---|
| Capex | 297 | 363 | 392 | 406 | 426 | 5.1% |
Ratios
|
|---|
| Revenue growth | -4.1% | 11.0% | 30.4% | 14.3% | 4.3% | |
| EBITDA growth | -31.5% | 70.6% | 31.6% | 13.7% | 6.6% | |
| Gross Margin | 83.9% | | | | | 0.0% |
| EBITDA Margin | 28.1% | 43.2% | 43.5% | 43.3% | 44.3% | 0.9% |
| Net Income Margin | -17.3% | 5.5% | 3.5% | 3.2% | 4.1% | 0.9% |
| CAPEX, % of revenue | 23.4% | 25.8% | 21.4% | 19.3% | 19.5% | 0.1% |
| ROIC | 6.3% | 12.7% | 10.8% | 9.0% | 9.3% | 0.3% |
| ROE | -60.7% | 20.8% | 15.0% | 13.9% | 16.0% | 2.1% |
| Net Debt/EBITDA | 2.7x | 1.5x | 3.7x | 3.0x | 3.3x | 0.3x |
Revenue and profitability
The company's Revenue increased on 4.3% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.4 pp from 7.0% to 9.4% in 2015.
Net Income marign increased slightly on 0.87 pp from 3.2% to 4.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Cogeco Inc had CAPEX/Revenue of 19.5%. The company showed decline in CAPEX/Revenue of 6.3 pp from 25.8% in FY2012 to 19.5% in FY2015. It's average CAPEX/Revenue for the last three years was 20.1%.
Return on investment
The company operates at good ROE (16.04%) while ROIC is low (9.32%). ROIC showed almost no change in FY2015. ROE increased on 2.1 pp from 13.9% to 16.0% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.3x and Debt / EBITDA is 3.5x. Net Debt / EBITDA surged on 0.3x from 3.0x to 3.3x in FY2015. Debt jumped on 19.9% in FY2015 while cash surged on 157% in FY2015.
Appendix 1: Peers in Communications
Below you can find Cogeco 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 ($AIM) | 2.9% | 6.3% | -25.6% | 47.5% | |
| |
|---|
| Median (49 companies) | 7.8% | 2.5% | 1.8% | 1.9% | 0.3% |
|---|
| Cogeco Inc ($CGO) | | 11.0% | 30.4% | 14.3% | 4.3% |
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 ($STC) | 74.5% | 68.8% | | 66.9% | 67.2% |
| |
|---|
| Median (41 companies) | 43.2% | 43.0% | 42.6% | 41.9% | 58.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Manitoba Telecom Services Inc ($MBT) | 33.7% | 34.3% | 33.7% | 47.4% | |
| Cogeco Cable Inc ($CCA) | 45.8% | 46.0% | 44.9% | 43.8% | 46.2% |
| Shaw Communications Inc ($SJR.B) | 43.3% | 42.7% | 43.3% | 42.1% | 44.6% |
| BCE Inc ($BCE) | 37.0% | 38.8% | 37.7% | 38.4% | |
| Rogers Communications Inc ($RCI.A) | 38.0% | 37.3% | 38.4% | 37.9% | |
| |
|---|
| Median (49 companies) | 14.1% | 13.5% | 14.1% | 11.7% | 8.7% |
|---|
| Cogeco Inc ($CGO) | 28.1% | 43.2% | 43.5% | 43.3% | 44.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Newfoundland Capital Corp Ltd ($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% |
|---|
| Cogeco Inc ($CGO) | 23.4% | 25.8% | 21.4% | 19.3% | 19.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi2Wi Corp ($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) | 7.2% | 8.0% | 8.2% | 8.0% | 0.2% |
|---|
| Cogeco Inc ($CGO) | 6.3% | 12.7% | 10.8% | 9.0% | 9.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Plaintree Systems Inc ($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 | 1.7x |
|---|
| Cogeco Inc ($CGO) | 2.7x | 1.5x | 3.7x | 3.0x | 3.3x |
