Laurentian Bank of Canada reports 48.2% Net Income growth and 2.0% Revenue growth
06.12.2016 • About Laurentian Bank of Canada (
$LB) • By InTwits
Laurentian Bank of Canada reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Laurentian Bank of Canada doesn't have a profitable business model yet: FY2016 ROIC is 1.6%
- Laurentian Bank of Canada has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's in pair with industry average of 3.1%.
- CAPEX is quite volatile: 43.5 in FY2016, 14.6 in FY2015, 64.5 in FY2014, 96.7 in FY2013, 77.3 in FY2012
- The company has potentially unprofitable business model: ROIC is at 1.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Laurentian Bank of Canada ($LB) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,441 | 1,487 | 1,458 | 1,463 | 1,493 | 2.0% |
| Net Income | 141 | 119 | 140 | 102 | 152 | 48.2% |
Balance Sheet
|
|---|
| Cash | 91 | 83 | 126 | 109 | 124 | 13.4% |
| Short Term Debt | 1,350 | 1,464 | 1,562 | 1,840 | 1,707 | -7.2% |
| Long Term Debt | 6,481 | 5,420 | 5,311 | 5,943 | 7,444 | 25.3% |
Cash flow
|
|---|
| Capex | 77 | 97 | 64 | 15 | 44 | 197.9% |
Ratios
|
|---|
| Revenue growth | 7.7% | 3.2% | -1.9% | 0.3% | 2.0% | |
| Net Income Margin | 9.8% | 8.0% | 9.6% | 7.0% | 10.2% | 3.2% |
| CAPEX, % of revenue | 5.4% | 6.5% | 4.4% | 1.0% | 2.9% | 1.9% |
| ROIC | 2.1% | 1.7% | 2.0% | 1.2% | 1.6% | 0.3% |
| ROE | 11.4% | 8.7% | 10.1% | 6.9% | 9.2% | 2.3% |
Laurentian Bank of Canada ($LB) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 365 | 368 | 375 | 384 | 0.3% | 2.7% | 1.8% | 3.2% |
| Net Income | 43 | 46 | 45 | 18 | 19.1% | 11.0% | 2.2% | |
Balance Sheet
|
|---|
| Cash | 110 | 107 | 118 | 124 | -23.2% | 0.5% | 15.9% | 13.4% |
| Short Term Debt | 1,745 | 1,371 | 1,263 | 1,707 | -1.7% | -18.9% | -48.0% | -7.2% |
| Long Term Debt | 6,122 | 6,365 | 6,249 | 7,444 | 11.1% | 8.0% | 9.7% | 25.3% |
Ratios
|
|---|
| Net Income Margin | 11.7% | 12.4% | 12.0% | 4.8% | 1.8% | 0.9% | 0.0% | 9.8% |
Revenue and profitability
Laurentian Bank of Canada's Revenue increased on 2.0%. Revenue growth showed acceleration in FY16Q4 - it increased 3.2% YoY.
Net Income marign increased on 3.2 pp from 7.0% to 10.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.9% in FY2016. CAPEX/Revenue decreased on 3.6 pp from 6.5% in FY2013 to 2.9% in FY2016. It's average CAPEX/Revenue for the last three years was 2.8%.
Return on investment
The company operates at low ROIC (1.59%) and ROE (9.24%). ROIC showed almost no change in FY2016. ROE increased on 2.3 pp from 6.9% to 9.2% in FY2016.
Leverage (Debt)
Debt jumped on 17.6% while cash jumped on 13.4%.
Management team
Laurentian Bank of Canada's CEO is Francois Desjardins. Francois Desjardins is a founder and has 3 years tenure at the company. Laurentian Bank of Canada's CFO is Francois Laurin. Francois Laurin has 3 years tenure at the company.
Appendix 1: Peers in Financial
Below we provide Laurentian Bank of Canada benchmarking against other companies in Financial industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Grenville Strategic Royalty Corp ($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 |
|---|
