Ag Growth International Inc reports 128% CAPEX growth and 12.3% Revenue growth
10.03.2016 • About Ag Growth International Inc (
$AFN) • By InTwits
Ag Growth International Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ag Growth International Inc doesn't have a profitable business model yet: 2015 ROIC is 0.6%
- EBITDA Margin is quite volatile: 4.5% in 2015, 15.4% in 2014, 16.3% in 2013, 15.6% in 2012, 18.4% in 2011
- Ag Growth International Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.3%. At the same time it's in pair with industry average of 5.1%.
- CAPEX is quite volatile: 39.6 in 2015, 17.4 in 2014, 14.3 in 2013, 4.7 in 2012, 9.3 in 2011
- The company has potentially unprofitable business model: ROIC is at 0.6%
- It operates with high leverage: Net Debt/EBITDA is 14.1x while industry average is 2.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ag Growth International Inc ($AFN) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 305.9 | 314.3 | 356.8 | 400.1 | 449.5 | 12.3% |
| Gross Profit | 101.7 | 95.1 | 111.7 | 123.6 | 119.0 | -3.7% |
| SG&A | | | 63.5 | 73.8 | 102.7 | 39.1% |
| EBITDA | 56.2 | 49.1 | 58.2 | 61.8 | 20.4 | -67.0% |
| Net Income | 24.5 | 17.2 | 22.6 | 4.1 | -25.2 | -715.3% |
Balance Sheet
|
|---|
| Cash | 6.8 | 2.2 | 108.7 | 25.3 | 58.2 | 130.2% |
| Short Term Debt | 0.1 | 0.0 | 0.0 | 49.2 | 34.8 | -29.2% |
| Long Term Debt | 143.0 | 144.5 | 104.4 | 108.4 | 311.1 | 187.0% |
Cash flow
|
|---|
| Capex | 9.3 | 4.7 | 14.3 | 17.4 | 39.6 | 128.2% |
Ratios
|
|---|
| Revenue growth | 13.6% | 2.7% | 13.5% | 12.2% | 12.3% | |
| EBITDA growth | -8.8% | -12.7% | 18.6% | 6.1% | -67.0% | |
| Gross Margin | 33.3% | 30.3% | 31.3% | 30.9% | 26.5% | -4.4% |
| EBITDA Margin | 18.4% | 15.6% | 16.3% | 15.4% | 4.5% | -10.9% |
| Net Income Margin | 8.0% | 5.5% | 6.3% | 1.0% | -5.6% | -6.6% |
| SG&A, % of revenue | | | 17.8% | 18.4% | 22.8% | 4.4% |
| CAPEX, % of revenue | 3.0% | 1.5% | 4.0% | 4.3% | 8.8% | 4.5% |
| ROIC | 15.5% | 12.8% | 16.3% | 15.2% | 0.6% | -14.7% |
| ROE | 11.9% | 8.8% | 11.7% | 2.0% | -11.3% | -13.3% |
| Net Debt/EBITDA | 2.4x | 2.9x | -0.1x | 2.1x | 14.1x | 12.0x |
Revenue and profitability
The company's Revenue jumped on 12.3% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.4 pp from 16.9% to 26.2% in 2015.
Gross Margin decreased on 4.4 pp from 30.9% to 26.5% in 2015. SG&A as a % of Revenue increased on 4.4 pp from 18.4% to 22.8% in 2015.
Net Income marign decreased on 6.6 pp from 1.0% to -5.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 8.8% in 2015. CAPEX/Revenue increased on 7.3 pp from 1.5% in 2012 to 8.8% in 2015. Average CAPEX/Revenue for the last three years was 5.7%.To fuel this fast growth the company made large investments to CAPEX (195% of EBITDA).
Return on investment
The company operates at low but positive ROIC (0.56%) and negative ROE (-11.28%). ROIC dropped on 14.7 pp from 15.2% to 0.56% in 2015. ROE dropped on 13.3 pp from 2.0% to -11.3% in 2015.
Leverage (Debt)
Debt level is 14.1x Net Debt / EBITDA and 17.0x Debt / EBITDA. Net Debt / EBITDA surged on 12.0x from 2.1x to 14.1x in 2015. Debt jumped on 120% in 2015 while cash surged on 130% in 2015.
Appendix 1: Peers in Industrial
Below you can find Ag Growth International Inc 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 ($LMP) | | 56.7% | 33.9% | 47.0% | 61.8% |
| |
|---|
| Median (92 companies) | 5.8% | 11.5% | 4.9% | 9.1% | 8.3% |
|---|
| Ag Growth International Inc ($AFN) | | 2.7% | 13.5% | 12.2% | 12.3% |
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 ($FLY) | 54.0% | 57.2% | 59.2% | 62.9% | |
| |
|---|
| Median (88 companies) | 23.2% | 23.0% | 23.3% | 22.6% | 24.3% |
|---|
| Ag Growth International Inc ($AFN) | 33.3% | 30.3% | 31.3% | 30.9% | 26.5% |
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 ($BIN) | 32.2% | 30.7% | 33.1% | 34.0% | 9.8% |
| |
|---|
| Median (85 companies) | 8.1% | 9.2% | 8.3% | 7.2% | 9.5% |
|---|
| Ag Growth International Inc ($AFN) | 18.4% | 15.6% | 16.3% | 15.4% | 4.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cargojet Inc ($CJT.A) | 6.8% | 7.0% | 6.3% | 54.1% | 41.3% |
| Newalta Corp ($NAL) | 17.2% | 21.7% | 34.5% | 35.1% | 42.0% |
| Enterprise Group Inc ($E) | 3.6% | 17.4% | 27.2% | 32.7% | |
| ENTREC Corp ($ENT) | | 35.0% | 26.7% | 29.5% | 18.0% |
| Horizon North Logistics Inc ($HNL) | 25.1% | 26.5% | 16.3% | 24.1% | 14.7% |
| |
|---|
| Median (92 companies) | 2.4% | 3.1% | 3.5% | 3.1% | 4.0% |
|---|
| Ag Growth International Inc ($AFN) | 3.0% | 1.5% | 4.0% | 4.3% | 8.8% |
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 ($SNC) | 14.6% | 10.7% | 4.0% | 35.2% | 11.4% |
| Alarmforce Industries Inc ($AF) | 18.3% | 5.3% | 24.0% | 33.9% | 19.0% |
| Epicore BioNetworks Inc ($EBN) | 24.8% | 28.1% | 16.1% | 32.5% | 26.3% |
| |
|---|
| Median (93 companies) | 8.9% | 9.3% | 8.5% | 8.5% | 9.7% |
|---|
| Ag Growth International Inc ($AFN) | 15.5% | 12.8% | 16.3% | 15.2% | 0.6% |
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 | 12.9x |
| IBI Group Inc ($IBG) | 4.2x | 6.5x | | 8.3x | |
| |
|---|
| Median (72 companies) | 1.1x | 1.5x | 1.5x | 1.2x | 1.5x |
|---|
| Ag Growth International Inc ($AFN) | 2.4x | 2.9x | -0.1x | 2.1x | 14.1x |
