Corus Entertainment Inc Net Income jumped on 601% in 2016 and Revenue jumped on 43.7%
19.10.2016 • About Corus Entertainment Inc (
$CJR.B) • By InTwits
Corus Entertainment Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 35.1% in FY2016 vs. 34.0% in FY2015 vs. 34.2% in FY2012
- Corus Entertainment Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 12.7 in 2016, 6.2 in 2015, 14.8 in 2014, 11.7 in 2013, 5.1 in 2012
- The company has business model with low profitability: ROIC is at 9.2%
- It operates with high leverage: Net Debt/EBITDA is 5.2x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Corus Entertainment Inc ($CJR.B) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 842 | 804 | 833 | 815 | 1,171 | 43.7% |
| Gross Profit | 290 | 270 | 290 | 277 | 411 | 48.3% |
| EBITDA | 288 | 270 | 290 | 277 | 411 | 48.3% |
| Net Income | 149 | 160 | 150 | -25 | 126 | |
Balance Sheet
|
|---|
| Cash | 25 | 86 | 12 | 37 | 71 | 90.7% |
| Short Term Debt | 0 | 2 | 3 | 150 | 115 | -23.3% |
| Long Term Debt | 518 | 542 | 878 | 651 | 2,081 | 219.7% |
Cash flow
|
|---|
| Capex | 19 | 13 | 12 | 17 | 23 | 35.3% |
Ratios
|
|---|
| Revenue growth | 2.1% | -4.6% | 3.7% | -2.1% | 43.7% | |
| EBITDA growth | 1.9% | -6.1% | 7.3% | -4.3% | 48.3% | |
| Gross Margin | 34.4% | 33.6% | 34.8% | 34.0% | 35.1% | 1.1% |
| EBITDA Margin | 34.2% | 33.6% | 34.8% | 34.0% | 35.1% | 1.1% |
| Net Income Margin | 17.7% | 19.9% | 18.1% | -3.1% | 10.8% | 13.8% |
| CAPEX, % of revenue | 2.3% | 1.6% | 1.4% | 2.0% | 1.9% | -0.1% |
| ROIC | 14.8% | 13.3% | 12.4% | 10.9% | 9.2% | -1.7% |
| ROE | 13.8% | 13.8% | 12.1% | -2.0% | 7.2% | 9.2% |
| Net Debt/EBITDA | 1.7x | 1.7x | 3.0x | 2.8x | 5.2x | 2.4x |
Corus Entertainment Inc ($CJR.B) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 228 | 198 | 361 | 384 | 0.5% | 3.2% | 77.6% | 98.6% |
| EBITDA | 96 | 80 | 130 | 105 | 2.8% | 33.3% | 89.5% | 89.9% |
| Net Income | 41 | 102 | -16 | 0 | -20.4% | | | -99.9% |
Balance Sheet
|
|---|
| Cash | 42 | 55 | 68 | 71 | 51.5% | 45.1% | 54.3% | 90.7% |
| Short Term Debt | 150 | 550 | 115 | 115 | | | -23.3% | -23.3% |
| Long Term Debt | 632 | 63 | 2,107 | 2,081 | -29.4% | -92.7% | 209.8% | 219.7% |
Ratios
|
|---|
| Gross Margin | 42.0% | 40.3% | 36.1% | 27.4% | 0.9% | 9.1% | 2.3% | -1.3% |
| EBITDA Margin | 42.0% | 40.3% | 36.1% | 27.4% | 0.9% | 9.1% | 2.3% | -1.3% |
| Net Income Margin | 18.1% | 51.7% | -4.4% | 0.0% | -4.8% | 97.0% | -0.4% | -9.2% |
Revenue and profitability
The company's Revenue surged on 43.7%. Revenue growth showed acceleration in FY16Q4 - it increased 98.6% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 31.1 pp from 24.1% to 55.1% in 2016.
Gross Margin increased slightly on 1.1 pp from 34.0% to 35.1% in FY2016.
Net Income marign surged on 13.8 pp from -3.1% to 10.8% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 1.9%. The company showed almost no change in CAPEX/Revenue from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 1.8%.
Return on investment
The company operates at low ROIC (9.25%) and ROE (7.15%). ROIC decreased slightly on 1.7 pp from 10.9% to 9.2% in FY2016. ROE increased on 9.2 pp from -2.0% to 7.2% in FY2016.
Leverage (Debt)
Debt level is 5.2x Net Debt / EBITDA and 5.3x Debt / EBITDA. Net Debt / EBITDA surged on 2.4x from 2.8x to 5.2x in FY2016. Debt jumped on 174% while cash surged on 90.7%.
Management team
The company's CEO is Douglas D Murphy "Doug". Douglas D Murphy "Doug" is a founder and has 3 years tenure at the company. The company's CFO John R Gossling has spent 2 years at the company.
Appendix 1: Peers in Communications
Below you can find Corus Entertainment 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| AcuityAds Holding Inc ($AT) | | | | 51.6% | 91.4% |
| Shopify Inc ($SH) | | 111.9% | 109.0% | 95.4% | 89.7% |
| Gaming Nation Inc ($FAN) | | | | | 46.6% |
| Tucows Inc ($TC) | | 13.3% | 13.6% | 17.1% | 9.8% |
| Points International Ltd ($PTS) | | 45.1% | 26.0% | 16.2% | 8.6% |
| |
|---|
| Median (26 companies) | 13.1% | 3.5% | 2.1% | 4.2% | 2.3% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wanted Technologies Corp ($WAN) | 90.5% | 93.2% | 94.3% | 95.6% | |
| NeuLion Inc ($NLN) | 53.6% | 63.8% | 70.2% | 81.1% | 81.6% |
| TeraGo Inc ($TGO) | 62.9% | 61.8% | 59.8% | 77.2% | 77.2% |
| ICTV Brands Inc ($ITV) | 67.4% | 71.9% | 69.6% | 68.1% | |
| Platinum Communications Corp ($PCS) | 67.4% | 67.1% | 60.2% | 60.5% | |
| |
|---|
| Median (23 companies) | 44.2% | 42.8% | 45.3% | 46.4% | 41.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BCE Inc ($BCE) | 38.8% | 37.7% | 38.4% | 37.7% | 39.8% |
| Rogers Communications Inc ($RCI.A) | 37.3% | 38.4% | 37.9% | 36.9% | 32.5% |
| Quebecor Inc ($QBR.B) | 27.5% | 36.3% | 35.5% | 34.2% | 35.5% |
| TELUS Corp ($T) | 35.3% | 35.2% | 35.1% | 34.1% | 33.0% |
| ZoomerMedia Ltd ($ZUM) | 32.6% | 33.8% | 29.3% | 29.1% | 27.1% |
| |
|---|
| Median (30 companies) | 17.0% | 10.7% | 9.9% | 9.9% | 7.7% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| TELUS Corp ($T) | 17.9% | 17.8% | 19.8% | 20.2% | 21.5% |
| Rogers Communications Inc ($RCI.A) | 17.2% | 17.6% | 18.4% | 18.2% | 17.2% |
| Quebecor Inc ($QBR.B) | 16.7% | 15.4% | 17.9% | 17.5% | 17.6% |
| BCE Inc ($BCE) | 17.6% | 17.5% | 17.7% | 16.9% | 17.4% |
| TeraGo Inc ($TGO) | 20.9% | 21.5% | 23.1% | 14.8% | 13.0% |
| |
|---|
| Median (29 companies) | 2.7% | 3.0% | 2.3% | 2.3% | 3.0% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tucows Inc ($TC) | 17.7% | 22.5% | 35.4% | 51.4% | 58.4% |
| BCE Inc ($BCE) | 14.1% | 12.6% | 12.6% | 12.3% | 12.6% |
| Quebecor Inc ($QBR.B) | 7.9% | 9.6% | 8.4% | 8.4% | 10.1% |
| MDC Partners Inc ($MDZ.A) | -3.1% | -6.3% | 14.2% | 13.7% | 10.1% |
| TELUS Corp ($T) | 12.4% | 13.0% | 13.0% | 11.5% | 9.6% |
| |
|---|
| Median (29 companies) | 8.9% | 7.9% | 7.3% | 2.6% | 0.1% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Intertain Group Ltd/The ($IT) | | | | 9.4x | |
| MDC Partners Inc ($MDZ.A) | 12.4x | 112.6x | 4.6x | 5.5x | 9.6x |
| Quebecor Inc ($QBR.B) | 3.7x | 3.9x | 4.2x | 4.8x | 4.3x |
| Rogers Communications Inc ($RCI.A) | 2.3x | 2.4x | 3.2x | 3.6x | 3.8x |
| Newfoundland Capital Corp Ltd ($NCC.B) | 1.4x | 1.3x | 3.3x | 3.2x | |
| |
|---|
| Median (21 companies) | 1.4x | 1.3x | 1.5x | 1.6x | 1.7x |
|---|
