Reitmans Canada Ltd EBITDA dropped on 58.1% in 2016 and Revenue showed almost no change
30.03.2016 • About Reitmans Canada Ltd (
$RET) • By InTwits
Reitmans Canada Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Reitmans Canada Ltd doesn't have a profitable business model yet: FY2016 ROIC is -4.7%
- EBITDA Margin is quite volatile: 3.0% in FY2016, 7.1% in FY2015, 7.0% in FY2014, 9.0% in FY2013, 12.4% in FY2012
- Reitmans Canada Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.9%. At the same time it's in pair with industry average of 4.9%.
- CAPEX is quite volatile: 33.4 in FY2016, 29.0 in FY2015, 34.5 in FY2014, 84.4 in FY2013, 59.2 in FY2012
- The company has unprofitable business model: ROIC is at -4.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Reitmans Canada Ltd ($RET) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,019 | 1,001 | 960 | 939 | 937 | -0.2% |
| Gross Profit | 656 | 628 | 595 | 567 | 527 | -7.1% |
| SG&A | 594 | 598 | 592 | 555 | 545 | -1.8% |
| EBITDA | 127 | 90 | 67 | 67 | 28 | -58.1% |
| Net Income | 48 | 26 | 11 | 13 | -25 | -284.1% |
Balance Sheet
|
|---|
| Cash | 197 | 98 | 122 | 140 | 119 | -15.2% |
| Short Term Debt | 1 | 2 | 2 | 2 | 2 | 6.5% |
| Long Term Debt | 9 | 7 | 5 | 4 | 2 | -53.4% |
Cash flow
|
|---|
| Capex | 59 | 84 | 35 | 29 | 33 | 15.2% |
Ratios
|
|---|
| Revenue growth | -3.7% | -1.9% | -4.0% | -2.2% | -0.2% | |
| EBITDA growth | -31.0% | -28.9% | -25.9% | -0.4% | -58.1% | |
| Gross Margin | 64.4% | 62.8% | 61.9% | 60.4% | 56.2% | -4.1% |
| EBITDA Margin | 12.4% | 9.0% | 7.0% | 7.1% | 3.0% | -4.1% |
| Net Income Margin | 4.7% | 2.6% | 1.1% | 1.4% | -2.6% | -4.1% |
| SG&A, % of revenue | 58.3% | 59.8% | 61.6% | 59.1% | 58.1% | -0.9% |
| CAPEX, % of revenue | 5.8% | 8.4% | 3.6% | 3.1% | 3.6% | 0.5% |
| ROIC | 12.5% | 6.7% | 0.7% | 3.1% | -4.7% | -7.8% |
| ROE | 9.5% | 5.6% | 2.5% | 3.2% | -6.2% | -9.3% |
| Net Debt/EBITDA | -1.5x | -1.0x | -1.7x | -2.0x | -4.1x | -2.1x |
Reitmans Canada Ltd ($RET) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 202 | 253 | 240 | 242 | -2.3% | -2.1% | 0.8% | 2.5% |
| EBITDA | 2 | 15 | 15 | -3 | | -35.9% | -51.4% | -120.5% |
| Net Income | -8 | -0 | -0 | -17 | | -102.3% | -102.1% | -475.3% |
Balance Sheet
|
|---|
| Cash | 68 | 114 | 97 | 119 | -0.3% | 0.9% | -19.7% | -15.2% |
| Short Term Debt | 2 | 2 | 2 | 2 | 6.5% | 6.5% | 6.5% | 6.5% |
| Long Term Debt | 3 | 3 | 2 | 2 | -37.0% | -41.2% | -46.6% | -53.4% |
Ratios
|
|---|
| Gross Margin | 59.5% | 55.0% | 57.4% | 53.6% | 1.5% | -4.0% | -5.9% | -7.4% |
| EBITDA Margin | 0.9% | 5.9% | 6.1% | -1.4% | 2.4% | -3.1% | -6.5% | -8.3% |
| Net Income Margin | -3.8% | -0.1% | -0.1% | -6.8% | 2.7% | -3.8% | -5.5% | -8.7% |
Revenue and profitability
Reitmans Canada Ltd's Revenue showed almost no change in FY2016. Annual revenue decline showed slowdown in FY16Q4 - revenue increased on 2.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.64 pp from 6.9% to 7.6% in 2016.
Gross Margin decreased on 4.1 pp from 60.4% to 56.2% in FY2016. SG&A as a % of Revenue decreased slightly on 0.93 pp from 59.1% to 58.1% in FY2016.
Net Income marign decreased on 4.1 pp from 1.4% to -2.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Reitmans Canada Ltd had CAPEX/Revenue of 3.6%. CAPEX/Revenue decreased on 4.9 pp from 8.4% in FY2013 to 3.6% in FY2016. Average CAPEX/Revenue for the last three years was 3.4%.Battling declining revenue the company made large investments to CAPEX (120% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-4.66%) and ROE (-6.16%). ROIC decreased on 7.8 pp from 3.1% to -4.7% in FY2016. ROE decreased on 9.3 pp from 3.2% to -6.2% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -4.1x and Debt / EBITDA is 0.1x. Net Debt / EBITDA dropped on 2.1x from -2.0x to -4.1x in FY2016. Debt dropped on 33.4% while cash dropped on 15.2%.
Appendix 1: Peers in Consumer, Cyclical
Below we provide Reitmans Canada Ltd 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 539.9% | |
| Restaurant Brands International Inc ($QSR) | | | 4.6% | 238.0% | |
| Amaya Inc ($AYA) | 311.5% | 85.2% | 254.0% | 113.8% | |
| NYX Gaming Group Ltd ($NYX) | 65.2% | 52.8% | 45.8% | 91.8% | |
| Rainmaker Entertainment Inc ($RNK) | -24.6% | -45.0% | 30.1% | 56.4% | |
| |
|---|
| Median (49 companies) | 5.3% | 4.9% | 7.8% | 8.6% | |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| NYX Gaming Group Ltd ($NYX) | 91.3% | 86.7% | 88.3% | 85.6% | |
| DEQ Systems Corp ($DEQ) | 77.5% | 78.4% | 84.7% | 82.7% | |
| Second Cup Ltd/The ($SCU) | 86.6% | 85.1% | 72.7% | 81.1% | |
| New Look Vision Group Inc ($BCI) | 71.8% | 72.6% | 72.6% | 78.7% | |
| Cara Operations Ltd ($CAO) | | 79.2% | 78.9% | 78.4% | |
| |
|---|
| Median (42 companies) | 34.1% | 31.8% | 31.9% | 30.6% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Westshore Terminals Investment Corp ($WTE) | 49.7% | 65.9% | 60.9% | 59.6% | |
| Gamehost Inc ($GH) | 46.1% | 45.7% | 45.9% | 42.8% | |
| Great Canadian Gaming Corp ($GC) | 16.8% | 41.1% | 40.1% | 36.6% | |
| Restaurant Brands International Inc ($QSR) | | 51.1% | 20.8% | 33.9% | |
| Cara Operations Ltd ($CAO) | | 9.6% | 22.6% | 32.6% | |
| |
|---|
| Median (46 companies) | 7.5% | 9.7% | 10.2% | 9.0% | |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | 8.2% | 6.7% | 14.8% | 26.7% | |
| WestJet Airlines Ltd ($WJA) | 7.9% | 19.5% | 18.6% | 22.5% | |
| Westshore Terminals Investment Corp ($WTE) | 25.7% | 11.5% | 6.2% | 21.2% | |
| Exchange Income Corp ($EIF) | 7.9% | 15.8% | 15.5% | 15.4% | |
| Chorus Aviation Inc ($CHR.A) | 9.9% | 9.6% | 3.9% | 15.0% | |
| |
|---|
| Median (49 companies) | 2.7% | 3.1% | 3.4% | 2.8% | |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Partner Jet Corp ($PJT) | -51.6% | -50.8% | 85.1% | 51.1% | |
| Westshore Terminals Investment Corp ($WTE) | 24.0% | 37.8% | 35.0% | 38.3% | |
| Cara Operations Ltd ($CAO) | | | 24.7% | 35.1% | |
| Air Canada ($AC) | | 37.0% | 23.2% | 28.4% | |
| BMTC Group Inc ($GBT) | 33.0% | 32.5% | 25.2% | 25.2% | |
| |
|---|
| Median (49 companies) | 9.2% | 9.7% | 9.9% | 7.7% | |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 39.7x | |
| Mountain China Resorts Holding Ltd ($MCG) | | | 317.1x | 29.0x | |
| Rainmaker Entertainment Inc ($RNK) | | | | 18.6x | |
| Holloway Lodging Corp ($HLC) | | 5.8x | 8.4x | 17.1x | |
| AutoCanada Inc ($ACQ) | 4.2x | 4.7x | 6.4x | 8.0x | |
| |
|---|
| Median (38 companies) | 1.6x | 2.0x | 2.4x | 2.7x | |
|---|
