Sportscene Group Inc reports 120% EBITDA growth and 2.5 pp EBITDA Margin growth from 2.5% to 5.0%
24.11.2016 • About Sportscene Group Inc (
$SPS.A) • By InTwits
Sportscene Group Inc reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sportscene Group Inc doesn't have a profitable business model yet: FY2016 ROIC is -0.4%
- EBITDA Margin is quite volatile: 5.0% in FY2016, 2.5% in FY2015, 10.3% in FY2014, 11.3% in FY2013, 11.1% in FY2012
- Sportscene Group Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.8%. At the same time it's in pair with industry average of 7.8%.
- CAPEX is quite volatile: 5.9 in FY2016, 3.2 in FY2015, 4.6 in FY2014, 2.0 in FY2013, 7.4 in FY2012
- The company has unprofitable business model: ROIC is at -0.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.1x while industry average is 2.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sportscene Group Inc ($SPS.A) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 84.295 | 67.355 | 75.425 | 77.922 | 84.551 | 8.5% |
| Gross Profit | 59.517 | 43.749 | 47.780 | 52.017 | 57.669 | 10.9% |
| SG&A | 50.128 | 39.730 | 43.779 | 48.622 | 53.535 | 10.1% |
| EBITDA | 9.389 | 7.588 | 7.801 | 1.921 | 4.224 | 119.9% |
| Net Income | 3.256 | 2.892 | 3.099 | -2.227 | -0.622 | |
Balance Sheet
|
|---|
| Cash | 10.729 | 3.878 | 8.528 | 3.059 | 1.888 | -38.3% |
| Short Term Debt | 2.648 | 2.109 | 2.052 | 7.407 | 1.908 | -74.2% |
| Long Term Debt | 14.554 | 10.748 | 14.531 | 6.614 | 13.015 | 96.8% |
Cash flow
|
|---|
| Capex | 7.411 | 1.993 | 4.594 | 3.192 | 5.946 | 86.3% |
Ratios
|
|---|
| Revenue growth | 5.0% | -20.1% | 12.0% | 3.3% | 8.5% | |
| EBITDA growth | -8.8% | -19.2% | 2.8% | -75.4% | 119.9% | |
| Gross Margin | 70.6% | 65.0% | 63.3% | 66.8% | 68.2% | 1.5% |
| EBITDA Margin | 11.1% | 11.3% | 10.3% | 2.5% | 5.0% | 2.5% |
| Net Income Margin | 3.9% | 4.3% | 4.1% | -2.9% | -0.7% | 2.1% |
| SG&A, % of revenue | 59.5% | 59.0% | 58.0% | 62.4% | 63.3% | 0.9% |
| CAPEX, % of revenue | 8.8% | 3.0% | 6.1% | 4.1% | 7.0% | 2.9% |
| ROIC | 11.8% | 8.6% | 8.3% | -4.5% | -0.4% | 4.2% |
| ROE | 10.9% | 8.9% | 9.1% | -6.7% | -2.0% | 4.7% |
| Net Debt/EBITDA | 0.7x | 1.2x | 1.0x | 5.7x | 3.1x | -2.6x |
Sportscene Group Inc ($SPS.A) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 21 | 22 | 20 | 22 | 19.2% | 10.8% | -8.2% | 15.4% |
| EBITDA | 1 | 1 | 1 | 1 | 24.6% | 22.1% | -16.4% | |
| Net Income | 0 | -0 | -0 | -0 | 812.0% | | -261.7% | |
Balance Sheet
|
|---|
| Cash | 6 | 5 | 5 | 2 | -7.1% | -8.8% | -32.8% | -38.3% |
| Short Term Debt | 2 | 2 | 2 | 2 | -34.8% | -18.4% | -13.7% | -74.2% |
| Long Term Debt | 13 | 13 | 12 | 13 | 0.2% | 5.7% | 1.1% | 96.8% |
Ratios
|
|---|
| Gross Margin | 66.3% | 70.0% | 70.8% | 65.8% | -1.2% | 7.1% | -0.6% | 1.1% |
| EBITDA Margin | 7.1% | 4.6% | 6.0% | 2.6% | 0.3% | 0.4% | -0.6% | 10.4% |
| Net Income Margin | 1.1% | -0.2% | -1.7% | -2.0% | 1.0% | 1.6% | -2.7% | 8.9% |
Revenue and profitability
Sportscene Group Inc's Revenue increased on 8.5%. Revenue growth showed acceleration in FY16Q4 - it increased 15.4% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 111 pp from -69.8% to 41.6% in 2016.
Gross Margin increased slightly on 1.5 pp from 66.8% to 68.2% in FY2016. SG&A as a % of Revenue increased slightly on 0.92 pp from 62.4% to 63.3% in FY2016.
Net Income marign increased on 2.1 pp from -2.9% to -0.74% in FY2016.
Capital expenditures (CAPEX) and working capital investments
Sportscene Group Inc's CAPEX/Revenue was 7.0% in FY2016. Sportscene Group Inc showed CAPEX/Revenue growth of 4.1 pp from 3.0% in FY2013 to 7.0% in FY2016. For the last three years the average CAPEX/Revenue was 5.7%.The company investments to CAPEX were large: 141% of EBITDA.
Return on investment
The company operates at negative ROIC (-0.37%) and ROE (-1.95%). ROIC increased on 4.2 pp from -4.5% to -0.37% in FY2016. ROE increased on 4.7 pp from -6.7% to -2.0% in FY2016.
Leverage (Debt)
Debt level is 3.1x Net Debt / EBITDA and 3.5x Debt / EBITDA. Net Debt / EBITDA dropped on 2.6x from 5.7x to 3.1x in FY2016. Debt increased on 6.4% while cash dropped on 38.3%.
Appendix 1: Peers in Consumer, Cyclical
Below we provide Sportscene Group Inc benchmarking against other companies in Consumer, Cyclical 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 |
|---|
| 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 |
|---|
