Mainstreet Equity Corp CAPEX dropped on 17.6% in 2015 while Revenue surged on 11.0%
09.12.2015 • About Mainstreet Equity Corp (
$MEQ) • By InTwits
Mainstreet Equity Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mainstreet Equity Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 92.5%. At the same time it's a lot of higher than industry average of 10.6%.
- CAPEX is quite volatile: 1.00 in 2015, 35.3 in 2014, 6.3 in 2013, 18.7 in 2012, 8.3 in 2011
- The company has potentially unprofitable business model: ROIC is at 4.2%
- It operates with high leverage: Net Debt/EBITDA is 11.1x while industry average is 5.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mainstreet Equity Corp ($MEQ) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 56.9 | 66.8 | 78.2 | 90.4 | 100.4 | 11.0% |
| EBITDA | 32.0 | 38.3 | 44.0 | 51.4 | 58.6 | 14.0% |
| Net Income | 82.1 | 56.1 | 63.3 | 66.6 | 64.7 | -2.8% |
Balance Sheet
|
|---|
| Cash | 1.2 | 2.2 | 1.8 | 1.0 | 1.5 | 46.6% |
| Short Term Debt | 0.0 | 0.0 | 105.5 | 61.1 | 0.0 | -100.0% |
| Long Term Debt | 475.5 | 511.0 | 452.0 | 540.9 | 651.3 | 20.4% |
Cash flow
|
|---|
| Capex | 86.7 | 77.4 | 48.7 | 68.6 | 56.5 | -17.6% |
Ratios
|
|---|
| Revenue growth | 7.1% | 17.4% | 17.0% | 15.7% | 11.0% | |
| EBITDA growth | 18.8% | 19.7% | 14.8% | 16.8% | 14.0% | |
| EBITDA Margin | 56.3% | 57.4% | 56.3% | 56.8% | 58.4% | 1.5% |
| Net Income Margin | 144.3% | 83.9% | 80.9% | 73.6% | 64.5% | -9.2% |
| CAPEX, % of revenue | 152.4% | 115.8% | 62.3% | 75.8% | 56.3% | -19.5% |
| ROIC | 4.9% | 4.0% | 4.0% | 4.1% | 4.2% | 0.1% |
| ROE | | 13.9% | 13.6% | 12.6% | 10.9% | -1.6% |
| Net Debt/EBITDA | 14.8x | 13.3x | 12.6x | 11.7x | 11.1x | -0.6x |
Revenue and profitability
The company's Revenue surged on 11.0% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.0 pp from 55.2% to 57.2% in 2015.
Net Income marign decreased on 9.2 pp from 73.6% to 64.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Mainstreet Equity Corp had CAPEX/Revenue of 56.3%. CAPEX/Revenue dropped on 59.5 pp from 116% in FY2012 to 56.3% in FY2015. For the last three years the average CAPEX/Revenue was 64.8%.To deliver this fast growth Mainstreet Equity Corp invested a large share of EBITDA (96.4%) to CAPEX.
Return on investment
The company operates at low ROIC (4.24%) and ROE (10.94%). ROIC showed almost no change in FY2015. ROE decreased slightly on 1.6 pp from 12.6% to 10.9% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 11.1x and Debt / EBITDA is 11.1x. Net Debt / EBITDA dropped on 0.6x from 11.7x to 11.1x in FY2015. Debt increased on 8.2% in FY2015 while cash jumped on 46.6% in FY2015.
Appendix 1: Peers in Financial
Below you can find Mainstreet Equity Corp benchmarking vs. other companies in Financial 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 |
|---|
| Westaim Corp/The ($WED) | 35.7% | -99.9% | 38.0% | 5,680.8% | |
| Wall Financial Corp ($WFC) | | 35.2% | -74.1% | 285.4% | -75.3% |
| Element Financial Corp ($EFN) | | | 206.6% | 189.1% | |
| DealNet Capital Corp ($DLS) | -73.3% | 4,437.5% | 540.4% | 112.7% | |
| Gluskin Sheff + Associates Inc ($GS) | | -39.1% | 60.6% | 97.9% | -33.5% |
| |
|---|
| Median (72 companies) | 9.9% | 7.7% | 7.1% | 8.4% | 0.4% |
|---|
| Mainstreet Equity Corp ($MEQ) | | 17.4% | 17.0% | 15.7% | 11.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Olympia Financial Group Inc ($OLY) | 85.3% | 80.9% | 82.6% | 83.2% | |
| Morguard Corp ($MRC) | 74.8% | 74.0% | 69.9% | 68.6% | |
| DealNet Capital Corp ($DLS) | | 14.9% | 36.7% | 45.6% | |
| Brookfield Asset Management Inc ($BAM.A) | 34.3% | 25.6% | 30.7% | 28.6% | |
| Onex Corp ($OCX) | 20.0% | 20.1% | 26.2% | 27.9% | |
| |
|---|
| Median (11 companies) | 25.2% | 22.6% | 25.7% | 20.5% | 16.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Firm Capital Mortgage Investment Corp ($FC) | 88.7% | 87.6% | 87.9% | 88.8% | |
| Equitable Group Inc ($EQB) | 89.7% | 88.1% | 87.4% | 86.0% | |
| Alaris Royalty Corp ($AD) | 97.0% | 81.3% | 61.8% | 81.8% | |
| Brookfield Real Estate Services Inc ($BRE) | 77.1% | 77.7% | 77.9% | 78.4% | |
| First National Financial Corp ($FN) | 66.1% | 67.8% | 76.5% | 77.1% | |
| |
|---|
| Median (48 companies) | 34.5% | 29.5% | 32.0% | 30.5% | 47.9% |
|---|
| Mainstreet Equity Corp ($MEQ) | 56.3% | 57.4% | 56.3% | 56.8% | 58.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Killam Properties Inc ($KMP) | 73.6% | 80.7% | 114.1% | 143.5% | |
| Dundee Corp ($DC.A) | | 10.3% | 14.1% | 88.8% | 123.6% |
| StorageVault Canada Inc ($SVI) | 29.6% | 150.5% | 73.3% | 79.1% | |
| First Capital Realty Inc ($FCR) | 102.8% | 127.9% | 76.1% | 73.8% | |
| Gazit-Globe Ltd ($GZT) | 111.1% | 80.2% | 43.3% | 52.1% | |
| |
|---|
| Median (74 companies) | 1.3% | 1.4% | 0.8% | 1.0% | 1.7% |
|---|
| Mainstreet Equity Corp ($MEQ) | 152.4% | 115.8% | 62.3% | 75.8% | 56.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gluskin Sheff + Associates Inc ($GS) | 71.3% | 21.0% | 82.9% | 153.9% | 63.6% |
| Brookfield Real Estate Services Inc ($BRE) | 17.1% | 26.0% | 31.0% | 47.0% | |
| Redishred Capital Corp ($KUT) | -3.9% | -24.5% | 6.5% | 15.8% | |
| IGM Financial Inc ($IGM) | 15.3% | 14.2% | 14.2% | 13.7% | |
| Street Capital Group Inc ($SCB) | 2.3% | 10.9% | 11.0% | 13.4% | |
| |
|---|
| Median (76 companies) | 5.3% | 4.8% | 4.6% | 4.8% | 5.4% |
|---|
| Mainstreet Equity Corp ($MEQ) | 4.9% | 4.0% | 4.0% | 4.1% | 4.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| First National Financial Corp ($FN) | 37.6x | 34.3x | 33.7x | 40.9x | |
| Element Financial Corp ($EFN) | | 140.2x | 31.9x | 37.6x | |
| Gazit-Globe Ltd ($GZT) | 14.8x | 12.8x | 12.7x | 15.3x | |
| Morguard Corp ($MRC) | 7.5x | 8.9x | | 14.2x | |
| StorageVault Canada Inc ($SVI) | 6.0x | 11.2x | 9.7x | 13.6x | |
| |
|---|
| Median (40 companies) | 4.1x | 5.2x | 4.6x | 4.2x | 1.6x |
|---|
| Mainstreet Equity Corp ($MEQ) | 14.8x | 13.3x | 12.6x | 11.7x | 11.1x |
