DHX Media Ltd reports 41.6% Net Income growth and 15.4% Revenue growth
28.09.2016 • About DHX Media Ltd (
$DHX.A) • By InTwits
DHX Media Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- DHX Media Ltd is a growth stock: FY2016 revenue growth was 15.4%, 5 year revenue CAGR was 40.6% at FY2016 ROIC 10.4%
- DHX Media Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's a lot of higher than industry average of 45.3%.
- CAPEX is quite volatile: 2.3 in FY2016, 4.8 in FY2015, 2.4 in FY2014, 1.5 in FY2013, 1.2 in FY2012
- The company has business model with average profitability: ROIC is at 10.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.7x while industry average is 2.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
DHX Media Ltd ($DHX.A) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 72.6 | 97.3 | 116.1 | 264.0 | 304.8 | 15.4% |
| Gross Profit | 24.7 | 45.8 | 60.6 | 133.9 | 160.4 | 19.8% |
| SG&A | 16.1 | 31.9 | 34.3 | 59.1 | 75.6 | 28.0% |
| EBITDA | 19.2 | 13.2 | 26.0 | 59.4 | 77.1 | 29.8% |
| Net Income | 3.0 | 1.9 | 7.8 | 19.5 | 27.7 | 41.6% |
Balance Sheet
|
|---|
| Cash | 19.2 | 12.6 | 26.7 | 42.9 | 80.4 | 87.5% |
| Short Term Debt | 4.6 | 9.0 | 13.5 | 12.9 | 11.6 | -10.4% |
| Long Term Debt | 3.8 | 45.5 | 61.9 | 269.9 | 280.5 | 3.9% |
Cash flow
|
|---|
| Capex | 1.2 | 1.5 | 2.4 | 4.8 | 2.3 | -51.2% |
Ratios
|
|---|
| Revenue growth | 31.1% | 33.9% | 19.4% | 127.4% | 15.4% | |
| EBITDA growth | -0.4% | -31.6% | 97.5% | 128.5% | 29.8% | |
| Gross Margin | 34.0% | 47.1% | 52.2% | 50.7% | 52.6% | 1.9% |
| EBITDA Margin | 26.5% | 13.5% | 22.4% | 22.5% | 25.3% | 2.8% |
| Net Income Margin | 4.2% | 1.9% | 6.7% | 7.4% | 9.1% | 1.7% |
| SG&A, % of revenue | 22.1% | 32.8% | 29.5% | 22.4% | 24.8% | 2.4% |
| CAPEX, % of revenue | 1.6% | 1.5% | 2.1% | 1.8% | 0.8% | -1.0% |
| ROIC | 7.6% | 5.6% | 7.6% | 11.2% | 10.4% | -0.8% |
| ROE | 3.8% | 1.5% | 4.0% | 8.0% | 9.2% | 1.2% |
| Net Debt/EBITDA | -0.6x | 3.2x | 1.9x | 4.0x | 2.7x | -1.3x |
DHX Media Ltd ($DHX.A) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 64 | 81 | 84 | 75 | 48.5% | 26.8% | -1.7% | 5.8% |
| EBITDA | 17 | 20 | 27 | 13 | | 4.2% | -0.8% | -27.9% |
| Net Income | 8 | 12 | 10 | -2 | | 110.7% | -43.3% | -147.2% |
Balance Sheet
|
|---|
| Cash | 26 | 61 | 49 | 80 | 6.9% | 121.4% | 49.8% | 87.5% |
| Short Term Debt | 18 | 27 | 21 | 12 | -45.8% | 87.3% | 72.0% | -10.4% |
| Long Term Debt | 270 | 310 | 304 | 281 | 30.1% | 15.2% | 11.4% | 3.9% |
Ratios
|
|---|
| Gross Margin | 50.8% | 48.9% | 57.2% | 53.1% | -4.0% | -4.4% | 9.1% | 4.1% |
| EBITDA Margin | 27.0% | 24.2% | 31.8% | 17.9% | 38.8% | -5.2% | 0.3% | -8.4% |
| Net Income Margin | 11.8% | 14.3% | 12.2% | -2.3% | 29.7% | 5.7% | -8.9% | -7.5% |
Revenue and profitability
DHX Media Ltd's Revenue surged on 15.4%. Revenue growth showed slow down in FY16Q4 - it was 5.8% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 30.6 pp from 7.9% to 38.5% in 2016.
Gross Margin increased slightly on 1.9 pp from 50.7% to 52.6% in FY2016. SG&A as a % of Revenue increased on 2.4 pp from 22.4% to 24.8% in FY2016.
Net Income marign increased slightly on 1.7 pp from 7.4% to 9.1% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 DHX Media Ltd had CAPEX/Revenue of 0.77%. CAPEX/Revenue decreased slightly on 0.73 pp from 1.5% in FY2013 to 0.77% in FY2016. For the last three years the average CAPEX/Revenue was 1.5%.
Return on investment
The company operates at low ROIC (10.38%) and ROE (9.24%). ROIC decreased slightly on 0.79 pp from 11.2% to 10.4% in FY2016. ROE increased slightly on 1.2 pp from 8.0% to 9.2% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.7x and Debt / EBITDA is 3.8x. Net Debt / EBITDA dropped on 1.3x from 4.0x to 2.7x in FY2016. Debt increased on 3.3% while cash surged on 87.5%.
Management team
Dana Sean Landry is a the company's CEO. Dana Sean Landry is a founder and has spent 4 years at the company. Keith Benjamin Abriel is a The company's CFO. Keith Benjamin Abriel has spent 4 years at the company.
Appendix 1: Peers in Consumer, Cyclical
Below you can find DHX Media Ltd benchmarking vs. other companies in Consumer, Cyclical 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| New Flyer Industries Inc ($NFI) | | 38.6% | 21.0% | 6.1% | 47.8% |
| Hardwoods Distribution Inc ($HWD) | | 21.3% | 22.8% | 25.4% | 38.1% |
| Spin Master Corp ($TOY) | | 21.5% | 41.0% | 22.9% | 31.3% |
| Great Canadian Gaming Corp ($GC) | | -0.3% | 9.6% | 3.7% | 22.4% |
| CanWel Building Materials Group Ltd ($CWX) | | 2.1% | 4.6% | 8.6% | 18.6% |
| |
|---|
| Median (36 companies) | | 4.9% | 6.9% | 6.8% | 5.0% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Innova Gaming Group Inc ($IGG) | 89.3% | 82.4% | 85.3% | 92.9% | 88.1% |
| Second Cup Ltd/The ($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% | |
| Canlan Ice Sports Corp ($ICE) | 71.6% | 69.7% | 70.7% | 78.2% | |
| |
|---|
| Median (37 companies) | 36.1% | 31.6% | 32.5% | 31.5% | 34.6% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Westshore Terminals Investment Corp ($WTE) | 49.7% | 65.9% | 60.9% | 59.6% | |
| Gamehost Inc ($GH) | 46.1% | 45.7% | 45.9% | 42.8% | 42.6% |
| Great Canadian Gaming Corp ($GC) | 16.8% | 41.1% | 40.1% | 36.6% | 34.4% |
| Restaurant Brands International Inc ($QSR) | | 51.1% | 20.8% | 33.9% | 44.4% |
| Cara Operations Ltd ($CAO) | | 9.6% | 22.6% | 32.6% | |
| |
|---|
| Median (39 companies) | 8.1% | 9.8% | 12.3% | 10.1% | 15.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | 8.2% | 6.7% | 14.8% | 26.7% | 9.3% |
| WestJet Airlines Ltd ($WJA) | 7.9% | 19.5% | 18.6% | 22.5% | 22.4% |
| Westshore Terminals Investment Corp ($WTE) | 25.7% | 11.5% | 6.2% | 21.2% | |
| Innova Gaming Group Inc ($IGG) | 20.6% | 26.7% | 15.9% | 15.6% | 15.1% |
| Exchange Income Corp ($EIF) | 7.9% | 15.8% | 15.5% | 15.4% | 29.7% |
| |
|---|
| Median (42 companies) | 2.7% | 3.1% | 3.4% | 3.4% | 4.9% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Spin Master Corp ($TOY) | | 19.2% | 56.9% | 48.2% | 44.5% |
| Magna International Inc ($MG) | 16.3% | 18.6% | 25.2% | 21.9% | 21.2% |
| Linamar Corp ($LNR) | 12.9% | 17.0% | 21.7% | 23.7% | 19.8% |
| Sleep Country Canada Holdings Inc ($ZZZ) | | | 9.7% | 12.7% | 19.0% |
| Air Canada ($AC) | | 37.0% | 23.2% | 28.4% | 18.8% |
| |
|---|
| Median (42 companies) | 10.5% | 12.5% | 10.8% | 10.6% | 11.2% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Holloway Lodging Corp ($HLC) | | 5.8x | 8.4x | 17.1x | 8.6x |
| AutoCanada Inc ($ACQ) | 4.2x | 4.7x | 6.4x | 8.0x | 13.7x |
| Second Cup Ltd/The ($SCU) | 1.0x | 0.6x | 0.0x | 7.5x | 0.0x |
| Amaya Inc ($AYA) | 17.9x | 1.8x | 13.5x | 6.6x | 5.0x |
| Performance Sports Group Ltd ($PSG) | 2.6x | 3.5x | 12.2x | 6.5x | |
| |
|---|
| Median (35 companies) | 1.9x | 2.8x | 2.4x | 2.5x | 2.1x |
|---|
