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First Capital Realty Inc reports 22.2% CAPEX decline while 1.3% Revenue growth

17.02.2016 • About First Capital Realty Inc ($FCR) • By InTwits

First Capital Realty Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • First Capital Realty Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 87.5%. At the same time it's a lot of higher than industry average of 8.9%.
  • CAPEX is quite volatile: 475 in 2015, 1,270 in 2014, 598 in 2013, 250 in 2012, 182 in 2011
  • The company has potentially unprofitable business model: ROIC is at 4.8%
  • It operates with high leverage: Net Debt/EBITDA is 10.2x while industry average is 5.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

First Capital Realty Inc ($FCR) key annual financial indicators

mln. CAD201120122013201420152015/2014
Net Income548.9392.9214.9196.7203.93.6%
Balance Sheet
Short Term Debt1,522.91,787.92,236.02,522.52,788.310.5%
Long Term Debt1,584.21,597.21,366.61,166.31,058.0-9.3%
Cash flow
Revenue growth9.2%10.0%9.0%2.7%1.3%
EBITDA growth9.0%7.8%6.5%2.5%0.1%
EBITDA Margin60.5%59.3%57.9%57.8%57.2%-0.6%
Net Income Margin104.2%67.8%34.0%30.3%31.0%0.7%
CAPEX, % of revenue102.8%127.9%76.1%73.8%56.7%-17.1%
Net Debt/EBITDA9.7x9.7x9.8x9.8x10.2x0.4x

Revenue and profitability

First Capital Realty Inc's Revenue increased slightly on 1.3% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 52.8 pp from -62.6% to -9.8% in 2015.

Net Income marign increased slightly on 0.70 pp from 30.3% to 31.0% in 2015.

Capital expenditures (CAPEX) and working capital investments

In 2015 First Capital Realty Inc had CAPEX/Revenue of 56.7%. First Capital Realty Inc's CAPEX/Revenue dropped on 71.2 pp from 128% in 2012 to 56.7% in 2015. For the last three years the average CAPEX/Revenue was 68.9%.The company invested a large share of EBITDA (99.2%) to CAPEX.

Return on investment

The company operates at low ROIC (4.76%) and ROE (5.73%). ROIC showed almost no change in 2015. ROE showed almost no change in 2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 10.2x and Debt / EBITDA is 10.2x. Net Debt / EBITDA jumped on 0.4x from 9.8x to 10.2x in 2015. Debt increased on 4.3% in 2015 while cash dropped on 47.2% in 2015.

Management team

The company's CEO Adam Elliot Paul is a founder and has spent 3 years at the company. The company's CFO is Kay Brekken. Kay Brekken has 4 years tenure at the company.

Appendix 1: Peers in Financial

Below we provide First Capital Realty Inc benchmarking against other companies in Financial 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
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 ($GS)-39.1%60.6%97.9%-33.5%
Median (73 companies)11.2%8.5%7.1%8.9%0.8%
First Capital Realty Inc ($FCR)10.0%9.0%2.7%1.3%

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%27.5%
Onex Corp ($OCX)20.0%20.1%26.2%27.9%
Median (11 companies)25.2%22.6%25.7%20.5%27.6%

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 ($FN)66.1%67.8%76.5%77.1%
Median (48 companies)35.6%32.3%32.0%30.5%43.5%
First Capital Realty Inc ($FCR)60.5%59.3%57.9%57.8%57.2%

Top companies by CAPEX/Revenue, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Killam Properties Inc ($KMP)73.6%80.7%114.1%143.5%46.7%
Dundee Corp ($DC.A)10.3%14.1%88.8%123.6%
StorageVault Canada Inc ($SVI)29.6%150.5%73.3%79.1%
Mainstreet Equity Corp ($MEQ)152.4%115.8%62.3%75.8%56.3%
Gazit-Globe Ltd ($GZT)111.1%80.2%43.3%52.1%
Median (75 companies)1.2%1.2%0.7%1.0%1.1%
First Capital Realty Inc ($FCR)102.8%127.9%76.1%73.8%56.7%

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%13.7%
Street Capital Group Inc ($SCB)2.3%10.9%11.0%13.4%
Median (77 companies)4.9%4.8%4.5%4.8%5.0%
First Capital Realty Inc ($FCR)5.9%5.3%5.1%5.0%4.8%

Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
First National Financial Corp ($FN)37.6x34.3x33.7x40.9x
Element Financial Corp ($EFN)140.2x31.9x37.6x
Gazit-Globe Ltd ($GZT)14.8x12.8x12.7x15.3x
Morguard Corp ($MRC)7.5x8.9x14.2x
StorageVault Canada Inc ($SVI)6.0x11.2x9.7x13.6x
Median (40 companies)2.9x5.1x4.6x4.2x2.9x
First Capital Realty Inc ($FCR)9.7x9.7x9.8x9.8x10.2x