Transcontinental Inc reports 135% Net Income growth and 0.59% Revenue growth
08.12.2015 • About Transcontinental Inc (
$TCL.A) • By InTwits
Transcontinental Inc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 19.3% in FY2015 vs. 14.9% in FY2014 vs. 16.1% in FY2011
- EBITDA Margin is quite volatile: 19.3% in FY2015, 14.9% in FY2014, 7.9% in FY2013, 5.8% in FY2012, 16.1% in FY2011
- Transcontinental Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 8.2%.
- CAPEX is quite volatile: 31.7 in 2015, 58.0 in 2014, 41.5 in 2013, 13.2 in 2012, 26.6 in 2011
- The company has highly profitable business model: ROIC is at 20.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Transcontinental Inc ($TCL.A) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,989 | 2,112 | 2,097 | 1,990 | 2,002 | 0.6% |
| Gross Profit | 365 | 358 | 339 | | | |
| EBITDA | 321 | 123 | 167 | 297 | 387 | 30.3% |
| Net Income | 128 | -177 | -17 | 112 | 263 | 134.7% |
Balance Sheet
|
|---|
| Cash | 75 | 17 | 26 | 35 | 39 | 9.7% |
| Short Term Debt | 272 | 284 | 218 | 118 | 36 | -69.2% |
| Long Term Debt | 293 | 204 | 129 | 359 | 348 | -3.1% |
Cash flow
|
|---|
| Capex | 47 | 37 | 47 | 35 | 64 | 83.5% |
Ratios
|
|---|
| Revenue growth | -1.9% | 6.2% | -0.7% | -5.1% | 0.6% | |
| EBITDA growth | -13.4% | -61.6% | 35.1% | 78.3% | 30.3% | |
| Gross Margin | 18.4% | 16.9% | 16.1% | | | 0.0% |
| EBITDA Margin | 16.1% | 5.8% | 7.9% | 14.9% | 19.3% | 4.4% |
| Net Income Margin | 6.4% | -8.4% | -0.8% | 5.6% | 13.1% | 7.5% |
| CAPEX, % of revenue | 2.4% | 1.8% | 2.2% | 1.8% | 3.2% | 1.5% |
| ROIC | 9.4% | -0.6% | 2.9% | 14.5% | 20.2% | 5.8% |
| ROE | 9.9% | -17.4% | -2.7% | 13.1% | 29.0% | 16.0% |
| Net Debt/EBITDA | 1.5x | 3.8x | 1.9x | 1.5x | 0.9x | -0.6x |
Revenue and profitability
Transcontinental Inc's Revenue increased slightly on 0.59% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.4 pp from 14.9% to 19.3% in FY2015.
Net Income marign increased on 7.5 pp from 5.6% to 13.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Transcontinental Inc's CAPEX/Revenue was 3.2% in FY2015. CAPEX/Revenue increased slightly on 1.5 pp from 1.8% in FY2012 to 3.2% in FY2015. For the last three years the average CAPEX/Revenue was 2.4%.
Return on investment
The company operates at high and attractive ROIC (20.25%) and ROE (29.04%). ROIC increased on 5.8 pp from 14.5% to 20.2% in FY2015. ROE jumped on 16.0 pp from 13.1% to 29.0% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is 1.0x. Net Debt / EBITDA dropped on 0.6x from 1.5x to 0.9x in FY2015. Debt dropped on 19.4% in FY2015 while cash increased on 9.7% in FY2015.
Management team
The company's CEO is Francois Olivier. Francois Olivier is a founder and has 10 years tenure at the company. Transcontinental Inc's CFO is Nelson Gentiletti. Nelson Gentiletti has 6 years tenure at the company.
Appendix 1: Peers in Consumer, Non-cyclical
Below you can find Transcontinental Inc benchmarking vs. other companies in Consumer, Non-cyclical 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 |
|---|
| GDI Integrated Facility Services Inc ($GDI) | 43.8% | -38.8% | -72.9% | 218,969.1% | |
| Cardiome Pharma Corp ($COM) | -97.7% | -47.6% | 471.7% | 566.0% | |
| Family Memorials Inc ($FAM) | -13.6% | 54.7% | 22.9% | 245.3% | |
| Nobilis Health Corp ($NHC) | 16.6% | 45.3% | 49.0% | 169.9% | |
| Concordia Healthcare Corp ($CXR) | | | | 159.5% | |
| |
|---|
| Median (85 companies) | 12.9% | 8.7% | 6.9% | 13.2% | 6.3% |
|---|
| Transcontinental Inc ($TCL.A) | | 6.2% | -0.7% | -5.1% | 0.6% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nobilis Health Corp ($NHC) | | | | 99.8% | |
| Cipher Pharmaceuticals Inc ($CPH) | | | 99.5% | 98.3% | |
| Heritage Global Inc ($HGP) | 99.5% | | | 95.7% | |
| Ritchie Bros Auctioneers Inc ($RBA) | 87.9% | 88.7% | 88.4% | 88.0% | |
| Concordia Healthcare Corp ($CXR) | | | 79.4% | 86.0% | |
| |
|---|
| Median (74 companies) | 35.4% | 37.4% | 36.1% | 35.1% | 28.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cipher Pharmaceuticals Inc ($CPH) | -50.0% | 40.6% | 71.4% | 63.7% | |
| Merus Labs International Inc ($MSL) | | 32.9% | 64.7% | 46.2% | 61.5% |
| Valeant Pharmaceuticals International Inc ($VRX) | 37.0% | 30.6% | 27.8% | 45.6% | |
| EnerCare Inc ($ECI) | 59.0% | 52.8% | 51.0% | 45.5% | |
| Information Services Corp ($ISV) | 34.1% | 39.6% | 39.6% | 37.6% | |
| |
|---|
| Median (84 companies) | 7.9% | 8.5% | 9.0% | 10.5% | 7.0% |
|---|
| Transcontinental Inc ($TCL.A) | 16.1% | 5.8% | 7.9% | 14.9% | 19.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Neptune Technologies & Bioressources Inc ($NTB) | 6.0% | 4.7% | 73.6% | 84.6% | 119.0% |
| CanaDream Corp ($CDN) | 68.6% | 43.3% | 38.1% | 70.4% | 63.4% |
| Ceapro Inc ($CZO) | 2.2% | 3.9% | 35.3% | 52.0% | |
| Feronia Inc/Canada ($FRN) | 129.0% | 191.4% | 117.4% | 42.4% | |
| Microbix Biosystems Inc ($MBX) | 1.0% | 1.2% | 3.0% | 40.3% | |
| |
|---|
| Median (85 companies) | 2.3% | 2.6% | 2.5% | 2.6% | 2.4% |
|---|
| Transcontinental Inc ($TCL.A) | 2.4% | 1.8% | 2.2% | 1.8% | 3.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Biosyent Inc ($RX) | 45.5% | 71.7% | 62.4% | 62.9% | |
| Information Services Corp ($ISV) | 56.0% | 71.8% | 72.8% | 58.9% | |
| Covalon Technologies Ltd ($COV) | -49.6% | -75.8% | -30.1% | 50.6% | |
| Cipher Pharmaceuticals Inc ($CPH) | -22.9% | 21.8% | 81.4% | 44.6% | |
| Ceapro Inc ($CZO) | 69.9% | -33.5% | 15.5% | 43.5% | |
| |
|---|
| Median (85 companies) | 7.4% | 7.2% | 6.7% | 6.9% | 7.2% |
|---|
| Transcontinental Inc ($TCL.A) | 9.4% | -0.6% | 2.9% | 14.5% | 20.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Noble Iron Inc ($NIR) | | 25.5x | 12.9x | 227.3x | |
| Family Memorials Inc ($FAM) | | | | 15.2x | |
| Amica Mature Lifestyles Inc ($ACC) | 11.7x | 9.4x | 14.7x | 13.8x | 12.3x |
| Cott Corp ($BCB) | 2.6x | 2.0x | 2.2x | 13.4x | |
| CRH Medical Corp ($CRH) | -2.3x | -3.1x | -3.5x | 12.0x | |
| |
|---|
| Median (69 companies) | 1.9x | 2.5x | 2.2x | 2.7x | 1.5x |
|---|
| Transcontinental Inc ($TCL.A) | 1.5x | 3.8x | 1.9x | 1.5x | 0.9x |
