Tree Island Steel Ltd Net Income surged on 1,551% in 2015 and Revenue surged on 25.7%
18.02.2016 • About Tree Island Steel Ltd (
$TSL) • By InTwits
Tree Island Steel Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tree Island Steel Ltd is a growth stock: 2015 revenue growth was 25.7%, 5 year revenue CAGR was 11.8% at 2015 ROIC 13.9%
- EBITDA Margin is quite volatile: 7.4% in 2015, 4.2% in 2014, 4.7% in 2013, 2.4% in 2012, 0.9% in 2011
- Tree Island Steel Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has highly profitable business model: ROIC is at 13.9%
- It operates with high leverage: Net Debt/EBITDA is 3.0x while industry average is 2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tree Island Steel Ltd ($TSL) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 150.0 | 146.2 | 153.4 | 183.9 | 231.3 | 25.7% |
| Gross Profit | 10.5 | 16.1 | 17.3 | 19.3 | 32.1 | 66.2% |
| SG&A | | 12.5 | 13.0 | 14.4 | 18.0 | 25.1% |
| EBITDA | 1.3 | 3.6 | 7.2 | 7.7 | 17.2 | 122.6% |
| Net Income | -12.9 | 10.4 | -0.7 | 1.0 | 16.1 | 1,551.0% |
Balance Sheet
|
|---|
| Cash | 3.9 | 2.4 | 1.3 | 2.3 | 1.3 | -42.6% |
| Short Term Debt | 16.1 | 12.5 | 18.3 | 32.5 | 30.8 | -5.3% |
| Long Term Debt | 42.8 | 29.7 | 28.2 | 13.0 | 21.9 | 68.1% |
Cash flow
|
|---|
| Capex | 0.5 | 0.3 | 0.5 | 1.5 | 6.3 | 308.2% |
Ratios
|
|---|
| Revenue growth | 13.3% | -2.5% | 4.9% | 19.9% | 25.7% | |
| EBITDA growth | 2,476.0% | 177.9% | 101.6% | 7.1% | 122.6% | |
| Gross Margin | 7.0% | 11.0% | 11.3% | 10.5% | 13.9% | 3.4% |
| EBITDA Margin | 0.9% | 2.4% | 4.7% | 4.2% | 7.4% | 3.2% |
| Net Income Margin | -8.6% | 7.1% | -0.4% | 0.5% | 7.0% | 6.5% |
| SG&A, % of revenue | | 8.6% | 8.5% | 7.8% | 7.8% | -0.0% |
| CAPEX, % of revenue | 0.3% | 0.2% | 0.3% | 0.8% | 2.7% | 1.9% |
| ROIC | -2.7% | 0.7% | 5.9% | 5.8% | 13.9% | 8.2% |
| ROE | -62.0% | 52.2% | -2.5% | 2.7% | 31.7% | 29.0% |
| Net Debt/EBITDA | 42.8x | 11.1x | 6.3x | 5.6x | 3.0x | -2.6x |
Revenue and profitability
Tree Island Steel Ltd's Revenue surged on 25.7% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 62.5 pp from 28.2% to 90.7% in 2015.
Gross Margin increased on 3.4 pp from 10.5% to 13.9% in 2015. SG&A as a % of Revenue showed almost no change in 2015.
Net Income marign increased on 6.5 pp from 0.53% to 7.0% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.7% in 2015. Tree Island Steel Ltd showed CAPEX/Revenue growth of 2.5 pp from 0.24% in 2012 to 2.7% in 2015. Average CAPEX/Revenue for the last three years was 1.3%.
Return on investment
The company operates at high and attractive ROE (31.69%) while ROIC is a bit lower (13.93%). ROIC increased on 8.2 pp from 5.8% to 13.9% in 2015. ROE surged on 29.0 pp from 2.7% to 31.7% in 2015.
Leverage (Debt)
Debt level is 3.0x Net Debt / EBITDA and 3.1x Debt / EBITDA. Net Debt / EBITDA dropped on 2.6x from 5.6x to 3.0x in 2015. Debt jumped on 15.7% in 2015 while cash dropped on 42.6% in 2015.
Appendix 1: Peers in Industrial
Below you can find Tree Island Steel Ltd benchmarking vs. other companies in Industrial 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 |
|---|
| Electrovaya Inc ($EFL) | | -4.0% | -71.2% | 160.5% | 123.8% |
| Enterprise Group Inc ($E) | 14.5% | 3.5% | 88.3% | 128.5% | |
| Carmanah Technologies Corp ($CMH) | 5.8% | -26.4% | -2.0% | 68.8% | |
| Exco Technologies Ltd ($XTC) | | 19.7% | 0.9% | 50.5% | 35.3% |
| Lumenpulse Inc ($LMP) | | 56.7% | 33.9% | 47.0% | 61.8% |
| |
|---|
| Median (92 companies) | 13.6% | 11.5% | 5.3% | 9.1% | 8.5% |
|---|
| Tree Island Steel Ltd ($TSL) | | -2.5% | 4.9% | 19.9% | 25.7% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| WSP Global Inc ($WSP) | 81.1% | 81.1% | 83.2% | 81.0% | |
| Pure Technologies Ltd ($PUR) | 75.7% | 77.9% | 78.0% | 77.5% | |
| Alarmforce Industries Inc ($AF) | 76.4% | 75.0% | 76.5% | 72.2% | 69.2% |
| Epicore BioNetworks Inc ($EBN) | 59.0% | 60.8% | 63.2% | 64.1% | 58.1% |
| FLYHT Aerospace Solutions Ltd ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | |
| |
|---|
| Median (88 companies) | 23.4% | 23.4% | 23.4% | 23.1% | 26.0% |
|---|
| Tree Island Steel Ltd ($TSL) | 7.0% | 11.0% | 11.3% | 10.5% | 13.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Canadian National Railway Co ($CNR) | 46.3% | 46.5% | 45.9% | 46.8% | 50.9% |
| Canadian Pacific Railway Ltd ($CP) | 28.1% | 26.1% | 32.4% | 43.7% | 48.9% |
| Vitreous Glass Inc ($VCI) | 29.0% | 31.4% | 32.2% | 37.8% | 39.0% |
| Questor Technology Inc ($QST) | 25.1% | 25.7% | 34.9% | 34.1% | |
| Progressive Waste Solutions Ltd ($BIN) | 32.2% | 30.7% | 33.1% | 34.0% | 9.8% |
| |
|---|
| Median (85 companies) | 8.3% | 9.4% | 8.3% | 7.7% | 9.9% |
|---|
| Tree Island Steel Ltd ($TSL) | 0.9% | 2.4% | 4.7% | 4.2% | 7.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cargojet Inc ($CJT.A) | 6.8% | 7.0% | 6.3% | 54.1% | |
| Newalta Corp ($NAL) | 17.2% | 21.7% | 34.5% | 35.1% | |
| Enterprise Group Inc ($E) | 3.6% | 17.4% | 27.2% | 32.7% | |
| ENTREC Corp ($ENT) | | 35.0% | 26.7% | 29.5% | |
| Horizon North Logistics Inc ($HNL) | 25.1% | 26.5% | 16.3% | 24.1% | |
| |
|---|
| Median (92 companies) | 3.0% | 3.1% | 3.7% | 3.2% | 3.5% |
|---|
| Tree Island Steel Ltd ($TSL) | 0.3% | 0.2% | 0.3% | 0.8% | 2.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vitreous Glass Inc ($VCI) | 26.1% | 30.5% | 32.3% | 48.3% | 51.0% |
| Photon Control Inc ($PHO) | 10.1% | 21.0% | 44.4% | 38.0% | |
| SNC-Lavalin Group Inc ($SNC) | 14.6% | 10.7% | 4.0% | 35.2% | |
| Alarmforce Industries Inc ($AF) | 18.3% | 5.3% | 24.0% | 33.9% | 19.0% |
| Epicore BioNetworks Inc ($EBN) | 24.8% | 28.1% | 16.1% | 32.5% | 26.3% |
| |
|---|
| Median (93 companies) | 9.1% | 10.0% | 8.5% | 9.1% | 9.5% |
|---|
| Tree Island Steel Ltd ($TSL) | -2.7% | 0.7% | 5.9% | 5.8% | 13.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sigma Industries Inc ($SSG) | | 4.4x | 11.3x | 225.9x | 2.9x |
| H2O Innovation Inc ($HEO) | | | 4.2x | 73.2x | 1.6x |
| Grand Power Logistics Group Inc ($GPW) | | 47.8x | | 53.1x | |
| Cargojet Inc ($CJT.A) | 1.8x | 1.5x | 1.5x | 31.5x | |
| IBI Group Inc ($IBG) | 4.2x | 6.5x | | 8.3x | |
| |
|---|
| Median (72 companies) | 1.1x | 1.5x | 1.4x | 1.2x | 1.6x |
|---|
| Tree Island Steel Ltd ($TSL) | 42.8x | 11.1x | 6.3x | 5.6x | 3.0x |
