Morguard Corp CAPEX jumped on 196% in 2015 and Revenue surged on 58.8%
26.02.2016 • About Morguard Corp (
$MRC) • By InTwits
Morguard Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Morguard Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 49.7%. At the same time it's a lot of higher than industry average of 8.7%.
- CAPEX is quite volatile: 185 in 2015, 62.6 in 2014, 359 in 2013, 454 in 2012, 114 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.4%
- It operates with high leverage: Net Debt/EBITDA is 9.3x while industry average is 6.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Morguard Corp ($MRC) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 376.8 | 396.8 | 504.8 | 551.4 | 875.7 | 58.8% |
| Gross Profit | 281.8 | 293.6 | 353.0 | 378.4 | 670.1 | 77.1% |
| SG&A | | | | | 72.6 | |
| EBITDA | 180.9 | 182.8 | | 247.2 | 425.4 | 72.1% |
| Net Income | 288.0 | 389.4 | 286.4 | 136.7 | 80.5 | -41.1% |
Balance Sheet
|
|---|
| Cash | 28.8 | 79.1 | 129.4 | 123.1 | 93.5 | -24.1% |
| Short Term Debt | 183.1 | 414.7 | 557.8 | 323.4 | 376.9 | 16.5% |
| Long Term Debt | 1,202.7 | 1,297.3 | 1,710.2 | 3,305.3 | 3,656.3 | 10.6% |
Cash flow
|
|---|
| Capex | 114.1 | 453.5 | 359.4 | 62.6 | 185.1 | 195.7% |
Ratios
|
|---|
| Revenue growth | 5.9% | 5.3% | 27.2% | 9.2% | 58.8% | |
| EBITDA growth | 9.5% | 1.1% | | | 72.1% | |
| Gross Margin | 74.8% | 74.0% | 69.9% | 68.6% | 76.5% | 7.9% |
| EBITDA Margin | 48.0% | 46.1% | 0.0% | 44.8% | 48.6% | 3.7% |
| Net Income Margin | 76.4% | 98.1% | 56.7% | 24.8% | 9.2% | -15.6% |
| SG&A, % of revenue | | | | | 8.3% | 8.3% |
| CAPEX, % of revenue | 30.3% | 114.3% | 71.2% | 11.4% | 21.1% | 9.8% |
| ROIC | 5.7% | 4.8% | 4.6% | 3.9% | 5.4% | 1.5% |
| ROE | 18.8% | 20.9% | 13.1% | 5.7% | 3.1% | -2.6% |
| Net Debt/EBITDA | 7.5x | 8.9x | | 14.2x | 9.3x | -4.9x |
Revenue and profitability
The company's Revenue surged on 58.8% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 43.3 pp from 67.4% to 24.1% in 2015.
Gross Margin increased on 7.9 pp from 68.6% to 76.5% in 2015.
Net Income marign dropped on 15.6 pp from 24.8% to 9.2% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 21.1% in 2015. Morguard Corp showed big decline in CAPEX/Revenue of 93.2 pp from 114% in 2012 to 21.1% in 2015. It's average CAPEX/Revenue for the last three years was 34.6%.
Return on investment
The company operates at low ROIC (5.38%) and ROE (3.10%). ROIC increased slightly on 1.5 pp from 3.9% to 5.4% in 2015. ROE decreased on 2.6 pp from 5.7% to 3.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 9.3x and Debt / EBITDA is 9.5x. Net Debt / EBITDA dropped on 4.9x from 14.2x to 9.3x in 2015. Debt surged on 11.1% in 2015 while cash dropped on 24.1% in 2015.
Management team
Kuldip Rai Sahi is a Morguard Corp's CEO. Kuldip Rai Sahi is a founder and has spent 16 years at the company. Paul Miatello is a The company's CFO. Paul Miatello has spent 11 years at the company.
Appendix 1: Peers in Financial
Below you can find Morguard 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 ($GS) | | -39.1% | 60.6% | 97.9% | -33.5% |
| |
|---|
| Median (73 companies) | 13.2% | 9.4% | 7.1% | 8.9% | 1.3% |
|---|
| Morguard Corp ($MRC) | | 5.3% | 27.2% | 9.2% | 58.8% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Olympia Financial Group Inc ($OLY) | 85.3% | 80.9% | 82.6% | 83.2% | 84.5% |
| DealNet Capital Corp ($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% | 31.0% |
| Tuckamore Capital Management Inc ($TX) | | 19.3% | 21.0% | 20.5% | |
| |
|---|
| Median (10 companies) | 22.6% | 20.1% | 25.2% | 19.7% | 30.1% |
|---|
| Morguard Corp ($MRC) | 74.8% | 74.0% | 69.9% | 68.6% | 76.5% |
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 ($FN) | 66.1% | 67.8% | 76.5% | 77.1% | 74.6% |
| |
|---|
| Median (48 companies) | 35.6% | 32.3% | 32.1% | 30.5% | 42.6% |
|---|
| Morguard Corp ($MRC) | 48.0% | 46.1% | | 44.8% | 48.6% |
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% |
| First Capital Realty Inc ($FCR) | 102.8% | 127.9% | 76.1% | 73.8% | 56.7% |
| |
|---|
| Median (75 companies) | 1.2% | 1.2% | 0.7% | 1.0% | 1.4% |
|---|
| Morguard Corp ($MRC) | 30.3% | 114.3% | 71.2% | 11.4% | 21.1% |
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 ($SCB) | 2.3% | 10.9% | 11.0% | 13.4% | |
| |
|---|
| Median (77 companies) | 4.9% | 4.8% | 4.5% | 4.8% | 4.8% |
|---|
| Morguard Corp ($MRC) | 5.7% | 4.8% | 4.6% | 3.9% | 5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| First National Financial Corp ($FN) | 37.6x | 34.3x | 33.7x | 40.9x | 37.4x |
| Element Financial Corp ($EFN) | | 140.2x | 31.9x | 37.6x | |
| Gazit-Globe Ltd ($GZT) | 14.8x | 12.8x | 12.7x | 15.3x | |
| StorageVault Canada Inc ($SVI) | 6.0x | 11.2x | 9.7x | 13.6x | |
| Killam Properties Inc ($KMP) | 9.8x | 8.9x | 9.7x | 12.0x | 11.5x |
| |
|---|
| Median (40 companies) | 2.9x | 5.1x | 4.8x | 4.2x | 3.0x |
|---|
| Morguard Corp ($MRC) | 7.5x | 8.9x | | 14.2x | 9.3x |
