Cogeco Cable Inc Net Income dropped on 174% in 2016 while Revenue increased on 6.5%
02.11.2016 • About Cogeco Cable Inc (
$CCA) • By InTwits
Cogeco Cable Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cogeco Cable Inc doesn't have a profitable business model yet: FY2016 ROIC is 0.3%
- Cogeco Cable Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.6%. At the same time it's a lot of higher than industry average of 6.8%.
- CAPEX is quite volatile: 52.2 in 2016, 31.7 in 2015, 58.0 in 2014, 41.5 in 2013, 13.2 in 2012
- The company has potentially unprofitable business model: ROIC is at 0.3%
- It operates with high leverage: Net Debt/EBITDA is 5.5x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cogeco Cable Inc ($CCA) key annual financial indicators
| mln. | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,278 | 1,692 | 1,948 | 2,043 | 2,176 | 6.5% |
| EBITDA | 587 | 759 | 853 | 944 | 514 | -45.6% |
| Net Income | 225 | 185 | 209 | 258 | -190 | -173.6% |
Balance Sheet
|
|---|
| Cash | 215 | 40 | 64 | 163 | 62 | -61.8% |
| Short Term Debt | 12 | 28 | 32 | 298 | 67 | -77.6% |
| Long Term Debt | 1,036 | 2,877 | 2,686 | 2,982 | 2,838 | -4.8% |
Cash flow
|
|---|
| Capex | 360 | 389 | 401 | 423 | 445 | 5.2% |
Ratios
|
|---|
| Revenue growth | 7.9% | 32.5% | 15.1% | 4.9% | 6.5% | |
| EBITDA growth | 8.1% | 29.3% | 12.4% | 10.6% | -45.6% | |
| EBITDA Margin | 46.0% | 44.9% | 43.8% | 46.2% | 23.6% | -22.6% |
| Net Income Margin | 17.6% | 10.9% | 10.8% | 12.6% | -8.7% | -21.3% |
| CAPEX, % of revenue | 28.1% | 23.0% | 20.6% | 20.7% | 20.4% | -0.3% |
| ROIC | 12.7% | 10.2% | 8.3% | 9.2% | 0.3% | -8.9% |
| ROE | 20.3% | 14.6% | 14.7% | 15.8% | -11.7% | -27.4% |
| Net Debt/EBITDA | 1.4x | 3.8x | 3.1x | 3.3x | 5.5x | 2.2x |
Cogeco Cable Inc ($CCA) key quoterly financial indicators
| mln. | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 540 | 552 | 540 | 544 | 8.7% | 8.3% | 4.6% | 4.5% |
| EBITDA | 242 | 244 | -219 | 246 | 10.6% | 6.1% | -193.3% | -5.7% |
| Net Income | 61 | 62 | -387 | 75 | 7.8% | 5.3% | -703.8% | -4.4% |
Balance Sheet
|
|---|
| Cash | 38 | 31 | 55 | 62 | 131.2% | 71.5% | -25.3% | -61.8% |
| Short Term Debt | 73 | 65 | 39 | 67 | -72.0% | -77.2% | -86.2% | -77.6% |
| Long Term Debt | 3,138 | 3,082 | 3,000 | 2,838 | 20.5% | 15.2% | 13.3% | -4.8% |
Ratios
|
|---|
| EBITDA Margin | 44.8% | 44.3% | -40.4% | 45.3% | 0.8% | -0.9% | -85.8% | -4.9% |
| Net Income Margin | 11.3% | 11.2% | -71.7% | 13.7% | -0.1% | -0.3% | -84.1% | -1.3% |
Revenue and profitability
The company's Revenue increased on 6.5%. Revenue growth showed slow down in FY16Q4 - it was 4.5% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.91 pp from 9.4% to 10.4% in 2016.
Net Income marign dropped on 21.3 pp from 12.6% to -8.7% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 20.4%. CAPEX/Revenue decreased on 2.5 pp from 23.0% in FY2013 to 20.4% in FY2016. Average CAPEX/Revenue for the last three years was 20.6%.Cogeco Cable Inc invested a large share of EBITDA (86.5%) to CAPEX.
Return on investment
The company operates at low but positive ROIC (0.30%) and negative ROE (-11.65%). ROIC decreased on 8.9 pp from 9.2% to 0.30% in FY2016. ROE dropped on 27.4 pp from 15.8% to -11.7% in FY2016.
Leverage (Debt)
Debt level is 5.5x Net Debt / EBITDA and 5.7x Debt / EBITDA. Net Debt / EBITDA surged on 2.2x from 3.3x to 5.5x in FY2016. Debt dropped on 11.4% while cash dropped on 61.8%.
Management team
The company's CEO is Louis Audet. Louis Audet is a founder and has 25 years tenure at the company. Cogeco Cable Inc's CFO Patrice Ouimet has spent 4 years at the company.
Appendix 1: Peers in Communications
Below we provide Cogeco Cable Inc benchmarking against other companies in Communications 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 |
|---|
| 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 |
|---|
