Telehop Communications Inc reports 108% EBITDA decline while 4.5% Revenue growth
29.04.2016 • About Telehop Communications Inc (
$HOP) • By InTwits
Telehop Communications Inc reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Telehop Communications Inc doesn't have a profitable business model yet: 2015 ROIC is -33.0%
- The company operates at negative EBITDA Margin: -0.2%
- EBITDA Margin is quite volatile: -0.2% in 2015, 2.7% in 2014, 4.9% in 2013, 2.1% in 2012, -7.3% in 2011
- Telehop Communications Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's a lot of higher than industry average of 35.3%.
- CAPEX is quite volatile: 0.11 in 2015, 0.31 in 2014, 0.056 in 2013, 0.057 in 2012, 0.53 in 2011
- The company has unprofitable business model: ROIC is at -33.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Telehop Communications Inc ($HOP) key annual financial indicators
| mln. CAD | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10.386 | 9.024 | 8.320 | 17.114 | 17.886 | 4.5% |
| Gross Profit | 3.976 | 3.907 | 3.536 | 6.664 | 6.704 | 0.6% |
| SG&A | | | 2.730 | 5.507 | 5.546 | 0.7% |
| EBITDA | -0.758 | 0.188 | 0.411 | 0.462 | -0.037 | -108.1% |
| Net Income | -1.330 | 0.044 | 0.089 | -0.460 | -0.959 | 108.4% |
Balance Sheet
|
|---|
| Cash | 0.414 | 0.713 | 0.773 | 1.767 | 0.712 | -59.7% |
| Short Term Debt | 0.007 | 0.007 | 0.059 | 0.864 | 0.005 | -99.4% |
| Long Term Debt | 0.016 | 0.009 | 0.006 | 0.106 | 0.014 | -87.2% |
Cash flow
|
|---|
| Capex | 0.526 | 0.057 | 0.056 | 0.308 | 0.110 | -64.1% |
Ratios
|
|---|
| Revenue growth | -11.7% | -13.1% | -7.8% | 105.7% | 4.5% | |
| EBITDA growth | -915.0% | -124.7% | 119.2% | 12.4% | -108.1% | |
| Gross Margin | 38.3% | 43.3% | 42.5% | 38.9% | 37.5% | -1.5% |
| EBITDA Margin | -7.3% | 2.1% | 4.9% | 2.7% | -0.2% | -2.9% |
| Net Income Margin | -12.8% | 0.5% | 1.1% | -2.7% | -5.4% | -2.7% |
| SG&A, % of revenue | | | 32.8% | 32.2% | 31.0% | -1.2% |
| CAPEX, % of revenue | 5.1% | 0.6% | 0.7% | 1.8% | 0.6% | -1.2% |
| ROIC | -118.5% | 9.4% | 19.7% | -4.1% | -33.0% | -28.9% |
| ROE | -153.4% | 5.8% | 7.3% | -29.3% | -69.4% | -40.0% |
| Net Debt/EBITDA | | -3.7x | -1.7x | -1.7x | | 1.7x |
Revenue and profitability
The company's Revenue increased on 4.5% in 2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.0 pp from 47.7% to 49.8% in 2015.
Gross Margin decreased slightly on 1.5 pp from 38.9% to 37.5% in 2015. SG&A as a % of Revenue decreased slightly on 1.2 pp from 32.2% to 31.0% in 2015.
Net Income marign decreased on 2.7 pp from -2.7% to -5.4% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 the company had CAPEX/Revenue of 0.62%. Telehop Communications Inc showed almost no change in CAPEX/Revenue from 2012 to 2015. For the last three years the average CAPEX/Revenue was 1.0%.
Return on investment
The company operates at negative ROIC (-33.04%) and ROE (-69.38%). ROIC dropped on 28.9 pp from -4.1% to -33.0% in 2015. ROE dropped on 40.0 pp from -29.3% to -69.4% in 2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.2x and Debt / EBITDA is . Net Debt / EBITDA surged on 1.7x from -1.7x to in 2015. Debt dropped on 98.0% in 2015 while cash dropped on 59.7% in 2015.
Appendix 1: Peers in Communications
Below you can find Telehop Communications Inc benchmarking vs. other companies in Communications 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 |
|---|
| Intertain Group Ltd/The ($IT) | | | | | 842.9% |
| Snipp Interactive Inc ($SPN) | | | 70.1% | 309.2% | 327.0% |
| UrtheCast Corp ($UR) | | | | | 205.7% |
| Wi2Wi Corp ($YTY) | | | 11.5% | 100.3% | 96.3% |
| DragonWave Inc ($DWI) | | -61.3% | 171.3% | -27.3% | 75.3% |
| |
|---|
| Median (54 companies) | -19.6% | 5.3% | 2.7% | 1.5% | 3.2% |
|---|
| Telehop Communications Inc ($HOP) | | -13.1% | -7.8% | 105.7% | 4.5% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wanted Technologies Corp ($WAN) | 86.6% | 90.5% | 93.2% | 94.3% | 95.6% |
| CounterPath Corp ($CCV) | 74.1% | 80.0% | 85.1% | 80.9% | 81.5% |
| NeuLion Inc ($NLN) | 45.2% | 53.6% | 63.8% | 70.2% | 81.1% |
| Mediagrif Interactive Technologies Inc ($MDF) | 78.2% | 79.8% | 79.8% | 78.8% | 80.1% |
| TeraGo Inc ($TGO) | 65.0% | 62.9% | 61.8% | 59.8% | 77.2% |
| |
|---|
| Median (40 companies) | 43.3% | 43.0% | 42.7% | 43.1% | 45.9% |
|---|
| Telehop Communications Inc ($HOP) | 38.3% | 43.3% | 42.5% | 38.9% | 37.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cogeco Cable Inc ($CCA) | 45.8% | 46.0% | 44.9% | 43.8% | 46.2% |
| Shaw Communications Inc ($SJR.B) | 43.3% | 42.7% | 43.3% | 42.1% | 44.6% |
| Cogeco Inc ($CGO) | 28.1% | 43.2% | 43.5% | 43.3% | 44.3% |
| Manitoba Telecom Services Inc ($MBT) | 33.7% | 34.3% | 33.7% | 47.4% | 42.3% |
| Mediagrif Interactive Technologies Inc ($MDF) | 32.0% | 32.5% | 41.3% | 37.2% | 39.0% |
| |
|---|
| Median (51 companies) | 16.4% | 13.5% | 14.1% | 11.7% | 10.4% |
|---|
| Telehop Communications Inc ($HOP) | -7.3% | 2.1% | 4.9% | 2.7% | -0.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Axia NetMedia Corp ($AXX) | 10.7% | 30.8% | 27.2% | 27.0% | 36.2% |
| Manitoba Telecom Services Inc ($MBT) | 16.3% | 19.8% | 18.1% | 22.4% | 22.9% |
| Shaw Communications Inc ($SJR.B) | 17.4% | 18.2% | 18.2% | 19.7% | 22.2% |
| Cogeco Cable Inc ($CCA) | 24.6% | 28.1% | 23.0% | 20.6% | 20.7% |
| TELUS Corp ($T) | 18.0% | 17.9% | 17.8% | 19.8% | 20.2% |
| |
|---|
| Median (52 companies) | 4.3% | 2.3% | 3.0% | 2.1% | 2.1% |
|---|
| Telehop Communications Inc ($HOP) | 5.1% | 0.6% | 0.7% | 1.8% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tucows Inc ($TC) | 12.8% | 17.7% | 22.5% | 35.4% | 51.4% |
| Asian Television Network International Ltd ($SAT) | 102.7% | 34.6% | 23.6% | 23.4% | 21.4% |
| Points International Ltd ($PTS) | 20.7% | 14.9% | 15.0% | 21.2% | 18.8% |
| RDM Corp ($RC) | -2.3% | 3.5% | 7.8% | 11.0% | 14.7% |
| Vecima Networks Inc ($VCM) | -0.6% | 11.7% | 6.4% | 11.4% | 14.5% |
| |
|---|
| Median (55 companies) | 7.5% | 7.9% | 8.2% | 8.0% | 3.7% |
|---|
| Telehop Communications Inc ($HOP) | -118.5% | 9.4% | 19.7% | -4.1% | -33.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Intertain Group Ltd/The ($IT) | | | | | 9.4x |
| MDC Partners Inc ($MDZ.A) | 7.3x | 12.4x | 112.6x | 4.6x | 5.5x |
| Quebecor Inc ($QBR.B) | 2.0x | 3.7x | 3.9x | 4.2x | 4.8x |
| Plaintree Systems Inc ($NPT) | 0.7x | | | 124.2x | 3.9x |
| Rogers Communications Inc ($RCI.A) | 2.2x | 2.3x | 2.4x | 3.2x | 3.6x |
| |
|---|
| Median (37 companies) | 1.0x | 1.4x | 1.3x | 1.5x | 0.9x |
|---|
