Holloway Lodging Corp reports 114% Net Income decline and 18.0 pp EBITDA Margin decline from 30.2% to 12.2%
09.03.2016 • About Holloway Lodging Corp (
$HLC) • By InTwits
Holloway Lodging Corp reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Holloway Lodging Corp doesn't have a profitable business model yet: 2015 ROIC is -0.1%
- Holloway Lodging Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.9%. At the same time it's a lot of higher than industry average of 5.1%.
- CAPEX is quite volatile: 29.5 in 2015, 14.4 in 2014, 4.0 in 2013, 4.8 in 2012, 2.6 in 2011
- The company has unprofitable business model: ROIC is at -0.1%
- It operates with high leverage: Net Debt/EBITDA is 17.1x while industry average is 8.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Holloway Lodging Corp ($HLC) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 77.4 | 58.4 | 60.0 | 97.5 | 110.7 | 13.5% |
| EBITDA | | | 18.7 | 29.4 | 13.5 | -54.2% |
| Net Income | -8.4 | 19.7 | 4.5 | 27.3 | -3.8 | -114.0% |
Balance Sheet
|
|---|
| Cash | 2.5 | 1.3 | 0.9 | 3.5 | 2.0 | -41.8% |
| Short Term Debt | 51.0 | 1.5 | 1.0 | 88.1 | 89.0 | 1.0% |
| Long Term Debt | 116.0 | 111.7 | 107.6 | 162.8 | 143.8 | -11.7% |
Cash flow
|
|---|
| Capex | 2.6 | 4.8 | 4.0 | 14.4 | 29.5 | 104.7% |
Ratios
|
|---|
| Revenue growth | 5.4% | -24.6% | 2.7% | 62.7% | 13.5% | |
| EBITDA growth | | | | 57.2% | -54.2% | |
| EBITDA Margin | 0.0% | 0.0% | 31.2% | 30.2% | 12.2% | -18.0% |
| Net Income Margin | -10.9% | 33.8% | 7.5% | 27.9% | -3.4% | -31.4% |
| CAPEX, % of revenue | 3.4% | 8.2% | 6.7% | 14.8% | 26.7% | 11.9% |
| ROIC | 3.5% | 4.5% | 5.1% | 6.2% | -0.1% | -6.3% |
| ROE | -34.7% | 37.3% | 5.3% | 27.1% | -3.4% | -30.5% |
| Net Debt/EBITDA | | | 5.8x | 8.4x | 17.1x | 8.7x |
Revenue and profitability
The company's Revenue surged on 13.5% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 33.4 pp from 26.7% to -6.6% in 2015.
Net Income marign dropped on 31.4 pp from 27.9% to -3.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Holloway Lodging Corp had CAPEX/Revenue of 26.7%. CAPEX/Revenue surged on 18.5 pp from 8.2% in 2012 to 26.7% in 2015. It's average CAPEX/Revenue for the last three years was 16.1%.The company has spent a lot to CAPEX (219% of EBITDA) to fuel its growth.
Return on investment
The company operates at negative ROIC (-0.11%) and ROE (-3.41%). ROIC decreased on 6.3 pp from 6.2% to -0.11% in 2015. ROE dropped on 30.5 pp from 27.1% to -3.4% in 2015.
Leverage (Debt)
Debt level is 17.1x Net Debt / EBITDA and 17.3x Debt / EBITDA. Net Debt / EBITDA jumped on 8.7x from 8.4x to 17.1x in 2015. Debt decreased on 7.2% in 2015 while cash dropped on 41.8% in 2015.
Appendix 1: Peers in Consumer, Cyclical
Below you can find Holloway Lodging Corp benchmarking vs. other companies in Consumer, Cyclical 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 |
|---|
| 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% | |
| AutoCanada Inc ($ACQ) | 16.1% | 9.2% | 27.9% | 57.2% | |
| |
|---|
| Median (68 companies) | 16.1% | 5.3% | 5.3% | 7.0% | 4.0% |
|---|
| Holloway Lodging Corp ($HLC) | | -24.6% | 2.7% | 62.7% | 13.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Restaurant Brands International Inc ($QSR) | | | 69.7% | 87.0% | 42.9% |
| Imvescor Restaurant Group Inc ($IRG) | 96.2% | 94.2% | 89.7% | 84.9% | 84.3% |
| DEQ Systems Corp ($DEQ) | 74.3% | 77.5% | 78.4% | 84.7% | |
| Cara Operations Ltd ($CAO) | | | 79.2% | 78.9% | 78.4% |
| Second Cup Ltd/The ($SCU) | 91.1% | 86.6% | 85.1% | 72.7% | 81.1% |
| |
|---|
| Median (61 companies) | 37.0% | 35.3% | 32.1% | 34.6% | 36.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Westshore Terminals Investment Corp ($WTE) | | 49.7% | 65.9% | 60.9% | 59.6% |
| Gamehost Inc ($GH) | 44.2% | 46.1% | 45.7% | 45.9% | 42.8% |
| Great Canadian Gaming Corp ($GC) | 34.1% | 16.8% | 41.1% | 40.1% | 36.6% |
| Amaya Inc ($AYA) | -5.7% | 7.2% | 38.2% | 39.3% | |
| MTY Food Group Inc ($MTY) | 32.2% | 36.3% | 38.7% | 37.0% | 34.9% |
| |
|---|
| Median (66 companies) | 8.7% | 8.0% | 9.6% | 9.8% | 10.1% |
|---|
| Holloway Lodging Corp ($HLC) | | | 31.2% | 30.2% | 12.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Poydras Gaming Finance Corp ($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% | 15.4% |
| Kelso Technologies Inc ($KLS) | 79.2% | 0.4% | 0.7% | 13.5% | |
| Gildan Activewear Inc ($GIL) | 9.0% | 3.7% | 7.4% | 12.1% | 8.7% |
| |
|---|
| Median (69 companies) | 2.6% | 2.7% | 2.8% | 2.3% | 3.1% |
|---|
| Holloway Lodging Corp ($HLC) | 3.4% | 8.2% | 6.7% | 14.8% | 26.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Partner Jet Corp ($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 (69 companies) | 10.7% | 9.8% | 10.8% | 9.9% | 11.2% |
|---|
| Holloway Lodging Corp ($HLC) | 3.5% | 4.5% | 5.1% | 6.2% | -0.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mountain China Resorts Holding Ltd ($MCG) | | | | 317.1x | |
| Restaurant Brands International Inc ($QSR) | | | 3.8x | 33.6x | 5.8x |
| Allied Hotel Properties Inc ($AHP) | | | | 21.3x | |
| Hudson's Bay Co ($HBC) | 8.7x | 3.8x | 3.6x | 19.1x | 3.6x |
| Amaya Inc ($AYA) | | 17.9x | 1.8x | 13.5x | |
| |
|---|
| Median (58 companies) | 1.3x | 1.3x | 1.8x | 2.0x | 1.4x |
|---|
| Holloway Lodging Corp ($HLC) | | | 5.8x | 8.4x | 17.1x |
