Canadian Western Bank reports 42.1% Net Income decline while 7.1% Revenue growth
01.12.2016 • About Canadian Western Bank (
$CWB) • By InTwits
Canadian Western Bank reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Canadian Western Bank has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's in pair with industry average of 33.0%.
- CAPEX is quite volatile: 406 in 2016, 204 in 2015, 432 in 2014, 158 in 2013, 75.7 in 2012
- The company has business model with low profitability: ROIC is at 9.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Canadian Western Bank ($CWB) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 814 | 877 | 926 | 966 | 1,035 | 7.1% |
| Net Income | 187 | 202 | 230 | 325 | 188 | -42.1% |
Balance Sheet
|
|---|
| Cash | 60 | 90 | 17 | 31 | 30 | -3.6% |
| Short Term Debt | | | | 0 | 0 | |
| Long Term Debt | 425 | 625 | 625 | 625 | 325 | -48.0% |
Cash flow
|
|---|
| Capex | 28 | 28 | 38 | 41 | 39 | -6.4% |
Ratios
|
|---|
| Revenue growth | 9.3% | 7.7% | 5.6% | 4.3% | 7.1% | |
| Net Income Margin | 23.0% | 23.1% | 24.8% | 33.7% | 18.2% | -15.5% |
| CAPEX, % of revenue | 3.4% | 3.1% | 4.1% | 4.3% | 3.7% | -0.5% |
| ROIC | 12.4% | 12.1% | 12.4% | 11.6% | 9.7% | -1.9% |
| ROE | 15.0% | 14.2% | 14.8% | 19.1% | 9.2% | -9.9% |
Canadian Western Bank ($CWB) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 247 | 255 | 265 | 267 | 2.7% | 7.7% | 9.7% | 8.4% |
| Net Income | 54 | 34 | 50 | 51 | -3.7% | -38.8% | -68.9% | -5.7% |
Balance Sheet
|
|---|
| Cash | 31 | 26 | 48 | 30 | 185.8% | -61.1% | 495.7% | -3.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 325 | 325 | 325 | 325 | -48.0% | -48.0% | -48.0% | -48.0% |
Ratios
|
|---|
| Net Income Margin | 21.6% | 13.2% | 18.8% | 19.2% | -1.5% | -10.0% | -47.5% | -2.9% |
Revenue and profitability
The company's Revenue increased on 7.1%. Revenue growth showed acceleration in FY16Q4 - it increased 8.4% YoY.
Net Income marign dropped on 15.5 pp from 33.7% to 18.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 the company had CAPEX/Revenue of 3.7%. CAPEX/Revenue increased slightly on 0.59 pp from 3.1% in FY2013 to 3.7% in FY2016. It's average CAPEX/Revenue for the last three years was 4.0%.
Return on investment
The company operates at low ROIC (9.66%) and ROE (9.20%). ROIC decreased slightly on 1.9 pp from 11.6% to 9.7% in FY2016. ROE decreased on 9.9 pp from 19.1% to 9.2% in FY2016.
Leverage (Debt)
Debt dropped on 48% while cash decreased on 3.6%.
Management team
The company's CEO is Christopher H Fowler "Chris". Christopher H Fowler "Chris" is a founder and has 5 years tenure at the company. The company's CFO Carolyn Joan Graham has spent 4 years at the company.
Appendix 1: Peers in Financial
Below we provide Canadian Western Bank benchmarking against other companies in Financial industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Grenville Strategic Royalty Corp ($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 |
|---|
