IOU Financial Inc revenue surged on 94.3% in 2015 and EBITDA Margin surged on 17.2 pp from -13.2% to 4.0%
22.04.2016 • About IOU Financial Inc (
$IOU) • By InTwits
IOU Financial Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- IOU Financial Inc doesn't have a profitable business model yet: 2015 ROIC is 1.4%
- IOU Financial Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -9.3% for the sames years0
- IOU Financial Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's in pair with industry average of 58.1%.
- CAPEX is quite volatile: 0.25 in 2015, 0.090 in 2014, 0.026 in 2013, 0.025 in 2012, 0.0062 in 2011
- The company has potentially unprofitable business model: ROIC is at 1.4%
- It operates with high leverage: Net Debt/EBITDA is 31.7x while industry average is 9.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
IOU Financial Inc ($IOU) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 0.142 | 0.938 | 4.047 | 6.160 | 11.971 | 94.3% |
| SG&A | | | | | 1.181 | |
| EBITDA | -0.961 | -1.538 | 0.676 | -0.813 | 0.477 | -158.7% |
| Net Income | -2.508 | -1.797 | -1.445 | -1.319 | -3.658 | 177.4% |
Balance Sheet
|
|---|
| Cash | 1.107 | 1.920 | 1.308 | 1.801 | 3.861 | 114.4% |
| Short Term Debt | 0.346 | 0.089 | 6.237 | 6.987 | 8.851 | 26.7% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 10.138 | |
Cash flow
|
|---|
| Capex | 0.006 | 0.025 | 0.026 | 0.090 | 0.249 | 177.7% |
Ratios
|
|---|
| Revenue growth | 176.4% | 562.1% | 331.7% | 52.2% | 94.3% | |
| EBITDA growth | 12.7% | 59.9% | -143.9% | -220.2% | -158.7% | |
| EBITDA Margin | -679.0% | -164.0% | 16.7% | -13.2% | 4.0% | 17.2% |
| Net Income Margin | -1,770.9% | -191.7% | -35.7% | -21.4% | -30.6% | -9.2% |
| SG&A, % of revenue | | | | | 9.9% | 9.9% |
| CAPEX, % of revenue | 4.4% | 2.6% | 0.6% | 1.5% | 2.1% | 0.6% |
| ROIC | -87.3% | -39.6% | 6.2% | -5.6% | 1.4% | 7.0% |
| ROE | | -45.9% | -23.2% | -14.3% | -29.8% | -15.5% |
| Net Debt/EBITDA | | | 7.3x | | 31.7x | 31.7x |
Revenue and profitability
IOU Financial Inc's Revenue surged on 94.3% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 125 pp from -54.4% to -180% in 2015.
Net Income marign decreased on 9.2 pp from -21.4% to -30.6% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 IOU Financial Inc had CAPEX/Revenue of 2.1%. CAPEX/Revenue decreased slightly on 0.55 pp from 2.6% in 2012 to 2.1% in 2015. Average CAPEX/Revenue for the last three years was 1.4%.To fuel this fast growth the company invested a large share of EBITDA (52.3%) to CAPEX.
Return on investment
The company operates at low but positive ROIC (1.45%) and negative ROE (-29.78%). ROIC increased on 7.0 pp from -5.6% to 1.4% in 2015. ROE dropped on 15.5 pp from -14.3% to -29.8% in 2015.
Leverage (Debt)
Debt level is 31.7x Net Debt / EBITDA and 39.8x Debt / EBITDA. Net Debt / EBITDA surged31.7x from to 31.7x in 2015. Debt jumped on 172% in 2015 while cash jumped on 114% in 2015.
Appendix 1: Peers in Financial
Below we provide IOU Financial Inc benchmarking against other companies in Financial 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mogo Finance Technology Inc ($GO) | | | 13.7% | 34.6% | 86.0% |
| Morguard Corp ($MRC) | | 5.3% | 27.2% | 9.2% | 58.8% |
| Terra Firma Capital Corp ($TII) | | 306.8% | 61.9% | 39.1% | 56.9% |
| Chesswood Group Ltd ($CHW) | | 12.2% | 9.4% | -47.4% | 53.7% |
| Callidus Capital Corp ($CBL) | | 19.0% | 93.5% | 134.2% | 49.6% |
| |
|---|
| Median (72 companies) | 33.7% | 9.3% | 7.7% | 9.0% | 1.3% |
|---|
| IOU Financial Inc ($IOU) | | 562.1% | 331.7% | 52.2% | 94.3% |
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 ($GO) | | 70.4% | 64.5% | 63.4% | 62.3% |
| Clarke Inc ($CKI) | 9.9% | 28.1% | 20.0% | 18.9% | 43.4% |
| Onex Corp ($OCX) | 20.0% | 20.1% | 26.2% | 27.9% | 31.0% |
| |
|---|
| Median (11 companies) | 24.0% | 23.6% | 25.7% | 20.5% | 30.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Firm Capital Mortgage Investment Corp ($FC) | 88.7% | 87.6% | 87.9% | 88.8% | 86.6% |
| 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% |
| |
|---|
| Median (47 companies) | 36.1% | 32.3% | 32.0% | 30.5% | 27.0% |
|---|
| IOU Financial Inc ($IOU) | -679.0% | -164.0% | 16.7% | -13.2% | 4.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Imperial Equities Inc ($IEI) | 23.1% | 22.8% | 16.0% | 27.7% | 147.5% |
| Dundee Corp ($DC.A) | | 10.3% | 14.1% | 88.8% | 123.6% |
| Gazit-Globe Ltd ($GZT) | 111.1% | 80.2% | 43.3% | 52.1% | 69.3% |
| Wall Financial Corp ($WFC) | | 13.5% | 9.8% | 6.1% | 65.3% |
| First Capital Realty Inc ($FCR) | 102.8% | 127.9% | 76.1% | 73.8% | 56.7% |
| |
|---|
| Median (74 companies) | 1.0% | 1.1% | 0.8% | 1.0% | 1.0% |
|---|
| IOU Financial Inc ($IOU) | 4.4% | 2.6% | 0.6% | 1.5% | 2.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gluskin Sheff + Associates Inc ($GS) | 71.3% | 21.0% | 82.9% | 153.9% | 63.6% |
| Brookfield Real Estate Services Inc ($BRE) | 17.1% | 26.0% | 31.0% | 47.0% | 61.0% |
| IGM Financial Inc ($IGM) | 15.3% | 14.2% | 14.2% | 13.7% | 13.7% |
| Clairvest Group Inc ($CVG) | 7.6% | 8.6% | 12.3% | 11.5% | 12.8% |
| Canadian Western Bank ($CWB) | 13.0% | 12.4% | 12.1% | 12.4% | 11.6% |
| |
|---|
| Median (74 companies) | 5.0% | 4.9% | 4.6% | 4.8% | 4.8% |
|---|
| IOU Financial Inc ($IOU) | -87.3% | -39.6% | 6.2% | -5.6% | 1.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Element Financial Corp ($EFN) | | 140.2x | 31.9x | 37.6x | 79.9x |
| First National Financial Corp ($FN) | 37.6x | 34.3x | 33.7x | 40.9x | 37.4x |
| Gazit-Globe Ltd ($GZT) | 14.8x | 12.8x | 12.7x | 15.3x | 22.1x |
| Wall Financial Corp ($WFC) | | 3.4x | 19.9x | 4.6x | 20.1x |
| Equitable Group Inc ($EQB) | 12.7x | 11.8x | 10.2x | 9.8x | 12.3x |
| |
|---|
| Median (37 companies) | 2.8x | 5.2x | 4.6x | 4.2x | 5.6x |
|---|
| IOU Financial Inc ($IOU) | | | 7.3x | | 31.7x |
