Melcor Developments Ltd reports 24.6% Net Income decline and 2.5 pp EBITDA Margin decline from 42.3% to 39.8%
16.03.2016 • About Melcor Developments Ltd (
$MRD) • By InTwits
Melcor Developments Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Melcor Developments Ltd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.8%. At the same time it's in pair with industry average of 90.1%.
- CAPEX is quite volatile: 1.1 in 2015, 37.3 in 2014, 20.2 in 2013, 11.2 in 2012, 12.5 in 2011
- The company has potentially unprofitable business model: ROIC is at 5.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Melcor Developments Ltd ($MRD) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 220.3 | 274.9 | 303.7 | 313.0 | 263.3 | -15.9% |
| EBITDA | 79.5 | 94.4 | 109.9 | 132.4 | 104.7 | -20.9% |
| Net Income | 81.4 | 105.0 | 98.6 | 100.7 | 76.0 | -24.6% |
Balance Sheet
|
|---|
| Cash | 10.7 | 11.6 | 29.0 | 19.0 | 48.7 | 156.0% |
| Short Term Debt | 0.6 | 0.6 | 0.6 | 32.0 | 104.1 | 225.6% |
| Long Term Debt | 429.7 | 490.5 | 574.3 | 614.7 | 526.9 | -14.3% |
Cash flow
|
|---|
| Capex | 12.5 | 11.2 | 20.2 | 37.3 | 1.1 | -96.9% |
Ratios
|
|---|
| Revenue growth | 16.0% | 24.8% | 10.5% | 3.1% | -15.9% | |
| EBITDA growth | 0.3% | 18.7% | 16.4% | 20.5% | -20.9% | |
| EBITDA Margin | 36.1% | 34.3% | 36.2% | 42.3% | 39.8% | -2.5% |
| Net Income Margin | 36.9% | 38.2% | 32.5% | 32.2% | 28.8% | -3.3% |
| CAPEX, % of revenue | 5.7% | 4.1% | 6.6% | 11.9% | 0.4% | -11.5% |
| ROIC | 7.5% | 7.7% | 7.9% | 8.3% | 5.9% | -2.4% |
| ROE | 14.4% | 16.3% | 13.5% | 12.1% | 8.1% | -4.0% |
| Net Debt/EBITDA | 5.3x | 5.1x | 5.0x | 4.7x | 5.6x | 0.8x |
Revenue and profitability
The company's Revenue dropped on 15.9% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.5 pp from 42.3% to 39.8% in 2015.
Net Income marign decreased on 3.3 pp from 32.2% to 28.8% in 2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.43% in 2015. The company's CAPEX/Revenue decreased on 3.6 pp from 4.1% in 2012 to 0.43% in 2015. It's average CAPEX/Revenue for the last three years was 6.3%.
Return on investment
The company operates at low ROIC (5.90%) and ROE (8.08%). ROIC decreased on 2.4 pp from 8.3% to 5.9% in 2015. ROE decreased on 4.0 pp from 12.1% to 8.1% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.6x and Debt / EBITDA is 6.0x. Net Debt / EBITDA jumped on 0.8x from 4.7x to 5.6x in 2015. Debt decreased on 2.4% in 2015 while cash surged on 156% in 2015.
Appendix 1: Peers in Financial
Below you can find Melcor Developments Ltd 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 ($EFN) | | | 206.6% | 189.1% | 47.2% |
| DealNet Capital Corp ($DLS) | -73.3% | 4,437.5% | 540.4% | 112.7% | |
| Gluskin Sheff + Associates Inc ($GS) | | -39.1% | 60.6% | 97.9% | -33.5% |
| |
|---|
| Median (74 companies) | 35.7% | 8.5% | 7.2% | 9.0% | 1.5% |
|---|
| Melcor Developments Ltd ($MRD) | | 24.8% | 10.5% | 3.1% | -15.9% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Olympia Financial Group Inc ($OLY) | 85.3% | 80.9% | 82.6% | 83.2% | 84.5% |
| Morguard Corp ($MRC) | 74.8% | 74.0% | 69.9% | 68.6% | 76.5% |
| Mogo Finance Technology Inc ($GO) | | 70.4% | 64.5% | 63.4% | 62.3% |
| DealNet Capital Corp ($DLS) | | 14.9% | 36.7% | 45.6% | |
| Brookfield Asset Management Inc ($BAM.A) | 34.3% | 25.6% | 30.7% | 28.6% | 27.5% |
| |
|---|
| Median (12 companies) | 25.2% | 25.0% | 26.2% | 24.2% | 31.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Equitable Group Inc ($EQB) | 89.7% | 88.1% | 87.4% | 86.0% | 84.7% |
| Atrium Mortgage Investment Corp ($AI) | 84.5% | 79.8% | | | 81.9% |
| Trez Capital Mortgage Investment Corp ($TZZ) | | | | | 76.2% |
| First National Financial Corp ($FN) | 66.1% | 67.8% | 76.5% | 77.1% | 74.6% |
| Madison Pacific Properties Inc ($MPC) | 59.2% | | 62.9% | 65.7% | 66.0% |
| |
|---|
| Median (39 companies) | 35.6% | 29.5% | 31.9% | 29.4% | 27.0% |
|---|
| Melcor Developments Ltd ($MRD) | 36.1% | 34.3% | 36.2% | 42.3% | 39.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Killam Properties Inc ($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 (76 companies) | 1.2% | 1.1% | 0.8% | 1.0% | 1.2% |
|---|
| Melcor Developments Ltd ($MRD) | 5.7% | 4.1% | 6.6% | 11.9% | 0.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gluskin Sheff + Associates Inc ($GS) | 71.3% | 21.0% | 82.9% | 153.9% | 63.6% |
| Brookfield Real Estate Services Inc ($BRE) | 17.1% | 26.0% | 31.0% | 47.0% | 61.0% |
| Redishred Capital Corp ($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% | -10.7% |
| |
|---|
| Median (78 companies) | 4.9% | 4.8% | 4.5% | 4.7% | 4.8% |
|---|
| Melcor Developments Ltd ($MRD) | 7.5% | 7.7% | 7.9% | 8.3% | 5.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| First National Financial Corp ($FN) | 37.6x | 34.3x | 33.7x | 40.9x | 37.4x |
| Element Financial Corp ($EFN) | | 140.2x | 31.9x | 37.6x | 79.9x |
| Gazit-Globe Ltd ($GZT) | 14.8x | 12.8x | 12.7x | 15.3x | |
| Morguard Corp ($MRC) | 7.5x | 8.9x | | 14.2x | 9.3x |
| StorageVault Canada Inc ($SVI) | 6.0x | 11.2x | 9.7x | 13.6x | |
| |
|---|
| Median (40 companies) | 2.9x | 5.5x | 5.1x | 4.2x | 4.0x |
|---|
| Melcor Developments Ltd ($MRD) | 5.3x | 5.1x | 5.0x | 4.7x | 5.6x |
