Rifco Inc reports 23.3% Net Income decline and 4.1% Revenue decline
13.06.2016 • About Rifco Inc (
$RFC) • By InTwits
Rifco Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 42.8% in FY2016 vs. 48.3% in FY2015 vs. 64.9% in FY2012
- Rifco Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- It operates with high leverage: Net Debt/EBITDA is 12.4x while industry average is 6.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Rifco Inc ($RFC) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 16.668 | 24.005 | 30.261 | 39.002 | 37.386 | -4.1% |
| EBITDA | 10.821 | 15.192 | 17.384 | 18.853 | 15.992 | -15.2% |
| Net Income | 2.521 | 4.730 | 6.378 | 5.928 | 4.545 | -23.3% |
Balance Sheet
|
|---|
| Cash | 3.424 | 3.679 | 2.804 | 3.716 | 2.900 | -22.0% |
| Short Term Debt | 101.597 | 137.662 | 96.836 | 131.930 | 114.941 | -12.9% |
| Long Term Debt | 8.140 | 8.500 | 91.449 | 95.939 | 86.479 | -9.9% |
Cash flow
|
|---|
| Capex | 0.111 | 0.087 | 0.280 | 0.656 | 0.233 | -64.4% |
Ratios
|
|---|
| Revenue growth | 0.5% | 44.0% | 26.1% | 28.9% | -4.1% | |
| EBITDA growth | | 40.4% | 14.4% | 8.5% | -15.2% | |
| EBITDA Margin | 64.9% | 63.3% | 57.4% | 48.3% | 42.8% | -5.6% |
| Net Income Margin | 15.1% | 19.7% | 21.1% | 15.2% | 12.2% | -3.0% |
| CAPEX, % of revenue | 0.7% | 0.4% | 0.9% | 1.7% | 0.6% | -1.1% |
| ROIC | | 4.9% | | | | 0.0% |
| ROE | | 57.1% | 43.9% | 27.6% | 16.6% | -11.0% |
| Net Debt/EBITDA | 9.8x | 9.4x | 10.7x | 11.9x | 12.4x | 0.5x |
Rifco Inc ($RFC) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 10 | 10 | 9 | 9 | 12.0% | -2.1% | -10.7% | -13.6% |
| EBITDA | 5 | 4 | 4 | 4 | 11.3% | -19.6% | -15.6% | -31.3% |
| Net Income | 2 | 1 | 1 | 1 | 46.1% | -43.5% | -7.2% | -58.5% |
Balance Sheet
|
|---|
| Cash | 4 | 3 | 4 | 3 | 1.7% | -9.5% | 24.8% | -22.0% |
| Short Term Debt | 132 | 122 | 118 | 115 | 15.8% | -9.0% | -15.6% | -12.9% |
| Long Term Debt | 90 | 93 | 92 | 86 | -3.6% | 6.1% | -1.0% | -9.9% |
Ratios
|
|---|
| EBITDA Margin | 48.0% | 40.3% | 38.8% | 43.8% | -0.3% | -8.7% | -2.3% | -11.4% |
| Net Income Margin | 20.2% | 9.3% | 8.2% | 10.3% | 4.7% | -6.8% | 0.3% | -11.2% |
Revenue and profitability
The company's Revenue decreased on 4.1%. Revenue decline showed acceleration in FY16Q4 - it was 13.6% YoY. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 5.6 pp from 48.3% to 42.8% in FY2016.
Net Income marign decreased on 3.0 pp from 15.2% to 12.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Rifco Inc's CAPEX/Revenue was 0.62% in FY2016. CAPEX/Revenue showed almost no change from FY2013 to FY2016. For the last three years the average CAPEX/Revenue was 1.1%.
Leverage (Debt)
Company's Net Debt / EBITDA is 12.4x and Debt / EBITDA is 12.6x. Net Debt / EBITDA jumped on 0.5x from 11.9x to 12.4x in FY2016. Debt dropped on 11.6% while cash dropped on 22.0%.
Appendix 1: Peers in Financial
Below we provide Rifco Inc benchmarking against other companies in Financial industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Grenville Strategic Royalty Corp ($GRC) | | | | 317.2% | |
| StorageVault Canada Inc ($SVI) | | 22.2% | 7.5% | 111.8% | |
| Slate Retail REIT ($SRT.UN) | | 316.8% | 229.7% | 92.5% | 21.6% |
| Mogo Finance Technology Inc ($GO) | | 13.7% | 34.6% | 86.0% | 14.6% |
| Morguard Corp ($MRC) | | 27.2% | 9.2% | 58.8% | 4.6% |
| |
|---|
| Median (54 companies) | | 7.1% | 9.0% | 3.3% | 5.2% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Olympia Financial Group Inc ($OLY) | 80.9% | 82.6% | 83.2% | 84.5% | 83.5% |
| Morguard Corp ($MRC) | 74.0% | 69.9% | 68.6% | 76.5% | 75.5% |
| Mogo Finance Technology Inc ($GO) | 70.4% | 64.5% | 63.4% | 62.3% | |
| StorageVault Canada Inc ($SVI) | 18.2% | 22.6% | 18.3% | 52.4% | |
| Clarke Inc ($CKI) | 28.1% | 20.0% | 18.9% | 43.4% | 41.6% |
| |
|---|
| Median (9 companies) | 28.1% | 30.7% | 28.3% | 43.4% | 30.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Firm Capital Mortgage Investment Corp ($FC) | 87.6% | 87.9% | 88.8% | 86.6% | |
| Equitable Group Inc ($EQB) | 88.1% | 87.4% | 86.0% | 84.7% | 83.0% |
| Atrium Mortgage Investment Corp ($AI) | 79.8% | | | 81.9% | 83.2% |
| Trez Capital Mortgage Investment Corp ($TZZ) | | | | 76.2% | |
| First National Financial Corp ($FN) | 67.8% | 76.5% | 77.1% | 74.6% | |
| |
|---|
| Median (37 companies) | 43.7% | 33.5% | 39.8% | 32.5% | 43.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dundee Corp ($DC.A) | 10.3% | 14.1% | 88.8% | 123.6% | |
| Gazit-Globe Ltd ($GZT) | 80.2% | 43.3% | 52.1% | 69.3% | 95.5% |
| First Capital Realty Inc ($FCR) | 127.9% | 76.1% | 73.8% | 56.7% | 79.7% |
| Killam Properties Inc ($KMP) | 80.7% | 114.1% | 143.5% | 46.7% | 59.9% |
| StorageVault Canada Inc ($SVI) | 150.5% | 73.3% | 79.1% | 21.4% | |
| |
|---|
| Median (56 companies) | 0.6% | 0.6% | 0.7% | 0.7% | 0.7% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CI Financial Corp ($CIX) | | | | | 24.1% |
| FirstService Corp ($FSV) | | | | | 17.4% |
| IGM Financial Inc ($IGM) | 14.2% | 14.2% | 13.7% | 13.7% | 13.1% |
| Alaris Royalty Corp ($AD) | 9.5% | 10.1% | 10.7% | 7.3% | 12.3% |
| Genworth MI Canada Inc ($MIC) | 11.9% | 9.6% | 9.7% | 9.5% | 9.4% |
| |
|---|
| Median (56 companies) | 4.6% | 3.8% | 3.9% | 3.0% | 3.1% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Element Financial Corp ($EFN) | 140.2x | 31.9x | 37.6x | 79.9x | 22.6x |
| First National Financial Corp ($FN) | 34.3x | 33.7x | 40.9x | 37.4x | |
| StorageVault Canada Inc ($SVI) | 11.2x | 9.7x | 13.6x | 35.7x | |
| Gazit-Globe Ltd ($GZT) | 12.8x | 12.7x | 15.3x | 22.1x | 15.2x |
| Equitable Group Inc ($EQB) | 11.8x | 10.2x | 9.8x | 12.3x | 13.7x |
| |
|---|
| Median (28 companies) | 5.3x | 4.6x | 4.7x | 6.0x | 7.8x |
|---|
