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MTY Food Group Inc demonstrated fast growth over the last few years. Will the growth continue?

22.02.2016 • About MTY Food Group Inc ($MTY) • By InTwits

MTY Food Group Inc is an attractive growth stock in Consumer, Cyclical industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.

Growth story


MTY Food Group Inc showed fast growth in the last financial year. The company's revenue surged on 26.1% in FY2015. EBITDA also increased considerably: 18.8% for the same period.

In the longer period MTY Food Group Inc showed fast revenue growth of 14.7% from FY2012 to FY2015 annually. EBITDA surged on 13.2% from FY2012 to FY2015 annually.

MTY Food Group Inc ($MTY) financials for the last 5 years

mln. CAD FY2011 FY2012 FY2013 FY2014 FY2015
Revenue7896101115145
Revenue growth, %22.8%5.3%13.6%26.1%
Gross margin, %98.4%
SG&A, %
EBITDA2535394351
EBITDA growth, %38.6%12.3%8.7%18.8%
EBITDA margin, %32.2%36.3%38.7%37.0%34.9%
Net Income1522262526
Net Income margin, % 19.1%22.9%25.4%21.9%17.9%
 
CAPEX11113
CAPEX/Revenue, %1.22%1.10%0.827%0.530%2.36%
Debt97192214
Cash6336733
Net Debt/EBITDA0.1x-0.7x0.3x0.4x-0.4x
 
ROIC, %22.8%27.5%24.5%20.9%22.3%
ROE, %18.2%22.8%22.1%18.6%16.7%

Profitability and return on investment


Despite revenue growth EBITDA margin declined slightly from 37% in FY2014 to 34.9% in FY2015. If we look for the longer period the company showed small EBITDA margin decline of 1.40 pp from 36.3% in FY2012 to 34.9% in FY2015.

We call MTY Food Group Inc an attractive growth stock as together with the growth it delivers high ROIC at 22.3%. During the last three years it dropped - it was 27.5% in FY2012. It's average level of ROIC for the last three years was 22.6%.

Net Income margin dropped on 4 pp from 21.9% to 17.9% in FY2015. In the longer period MTY Food Group Inc's Net Income margin dropped on 5 pp from 22.9% in FY2012 to 17.9% in FY2015.

MTY Food Group Inc operates at ROE of 16.7%. Average ROE for the last three years was 19.2%.

Capital expenditures (CAPEX)


MTY Food Group Inc's CAPEX/Revenue was 2.36% in FY2015. MTY Food Group Inc's CAPEX/Revenue surged on 1.26 pp from 1.10% in FY2012 to 2.36% in FY2015. It's average level of CAPEX/Revenue for the last three years was 1.24%.

Leverage (Debt)


The company has negative net debt at -0.4x Net Debt/EBITDA - at the same time with high growth. In the longer period leverage surged on 0.35x from -0.73x in FY2012 to -0.38x in FY2015.

Valuation vs. comparable companies


At the end of trading day today MTY Food Group Inc traded at 11.1x EV/EBITDA which is 60.7% lower than 28.3x Consumer, Cyclical peer group avearge calculated on the basis of 111 companies. The market closed today at 22.3x P/E for MTY Food Group Inc which is 16.5% higher than 19.2x Consumer, Cyclical peer group avearge calculated on the basis of 26 companies.

Peers in Consumer, Cyclical


Below we provide MTY Food Group Inc benchmarking against other companies in Consumer, Cyclical 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, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
Amaya Inc ($AYA)216.4%311.5%85.2%254.0%
Partner Jet Corp ($PJT)-19.9%-15.2%1.2%119.7%
Kelso Technologies Inc ($KLS)80.5%577.5%487.8%81.4%
XPEL Technologies Corp ($DAP.U)46.3%76.6%67.7%65.5%
Holloway Lodging Corp ($HLC)5.4%-24.6%2.7%62.7%
 
Median (67 companies)11.0%5.3%4.9%7.2%3.3%
MTY Food Group Inc ($MTY)22.8%5.3%13.6%26.1%


Top companies by Gross margin, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
Restaurant Brands International Inc ($QSR)69.7%87.0%
Imvescor Restaurant Group Inc ($IRG)96.2%94.2%89.7%84.9%84.3%
DEQ Systems Corp ($DEQ)74.3%77.5%78.4%84.7%
Second Cup Ltd/The ($SCU)91.1%86.6%85.1%72.7%
New Look Vision Group Inc ($BCI)72.3%71.8%72.6%72.6%
 
Median (60 companies)36.1%35.3%31.8%33.5%36.8%


Top companies by EBITDA margin, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
Westshore Terminals Investment Corp ($WTE)49.7%65.9%60.9%59.6%
Gamehost Inc ($GH)44.2%46.1%45.7%45.9%
Great Canadian Gaming Corp ($GC)34.1%16.8%41.1%40.1%
Amaya Inc ($AYA)-5.7%7.2%38.2%39.3%
Whistler Blackcomb Holdings Inc ($WB)34.8%36.0%35.9%36.4%35.4%
 
Median (65 companies)8.4%7.9%9.7%9.6%9.4%
MTY Food Group Inc ($MTY)32.2%36.3%38.7%37.0%34.9%


Top companies by CAPEX/Revenue, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
Poydras Gaming Finance Corp ($PYD)32.5%
WestJet Airlines Ltd ($WJA)3.9%7.9%19.5%18.6%22.5%
Exchange Income Corp ($EIF)8.2%7.9%15.8%15.5%
Holloway Lodging Corp ($HLC)3.4%8.2%6.7%14.8%
Kelso Technologies Inc ($KLS)79.2%0.4%0.7%13.5%
 
Median (68 companies)2.9%2.7%2.9%2.4%2.7%
MTY Food Group Inc ($MTY)1.2%1.1%0.8%0.5%2.4%


Top companies by ROIC, %

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
Partner Jet Corp ($PJT)-30.7%-51.6%-50.8%85.1%
Kelso Technologies Inc ($KLS)-121.3%48.8%
XPEL Technologies Corp ($DAP.U)52.9%54.7%57.5%43.2%
Westshore Terminals Investment Corp ($WTE)24.0%37.8%35.0%38.3%
Iplayco Corp Ltd ($IPC)-35.4%23.0%58.5%33.6%10.9%
 
Median (68 companies)10.4%9.7%10.1%9.7%9.4%
MTY Food Group Inc ($MTY)22.8%27.5%24.5%20.9%22.3%


Top companies by Net Debt / EBITDA

 FY2011 FY2012 FY2013 FY2014 FY2015
Top 5
Mountain China Resorts Holding Ltd ($MCG)317.1x
Restaurant Brands International Inc ($QSR)3.8x33.6x
Allied Hotel Properties Inc ($AHP)21.3x
Hudson's Bay Co ($HBC)8.7x3.8x3.6x19.1x3.6x
Amaya Inc ($AYA)17.9x1.8x13.5x
 
Median (57 companies)1.3x1.4x1.8x2.0x1.1x
MTY Food Group Inc ($MTY)0.1x-0.7x0.3x0.4x-0.4x


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