Richelieu Hardware Ltd revenue jumped on 12.6% in 2016 and EBITDA Margin decreased slightly on 0.52 pp from 11.7% to 11.2%
19.01.2017 • About Richelieu Hardware Ltd (
$RCH) • By InTwits
Richelieu Hardware Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Richelieu Hardware Ltd is a growth stock: FY2016 revenue growth was 12.6%, 5 year revenue CAGR was 10.0% at FY2016 ROIC 21.8%
- EBITDA Margin is relatively stable: 11.2% in FY2016 vs. 11.7% in FY2015 vs. 12.6% in FY2012
- Richelieu Hardware Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
- The company has highly profitable business model: ROIC is at 21.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Richelieu Hardware Ltd ($RCH) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 565.8 | 586.8 | 646.9 | 749.6 | 844.5 | 12.6% |
| Gross Profit | 71.2 | 70.4 | 77.4 | 87.7 | 94.4 | 7.7% |
| EBITDA | 71.2 | 70.4 | 77.4 | 87.7 | 94.4 | 7.7% |
| Net Income | 45.4 | 46.4 | 52.4 | 58.7 | 62.8 | 6.9% |
Balance Sheet
|
|---|
| Cash | 51.6 | 46.2 | 33.7 | 29.5 | 43.0 | 45.9% |
| Short Term Debt | 1.7 | 1.4 | 3.4 | 2.2 | 4.3 | 93.1% |
| Long Term Debt | 0.8 | 0.0 | 2.0 | 1.3 | 0.5 | -60.4% |
Cash flow
|
|---|
| Capex | 4.8 | 3.5 | 5.5 | 11.0 | 10.5 | -4.8% |
Ratios
|
|---|
| Revenue growth | 8.0% | 3.7% | 10.2% | 15.9% | 12.6% | |
| EBITDA growth | 6.0% | -1.1% | 10.0% | 13.3% | 7.7% | |
| Gross Margin | 12.6% | 12.0% | 12.0% | 11.7% | 11.2% | -0.5% |
| EBITDA Margin | 12.6% | 12.0% | 12.0% | 11.7% | 11.2% | -0.5% |
| Net Income Margin | 8.0% | 7.9% | 8.1% | 7.8% | 7.4% | -0.4% |
| CAPEX, % of revenue | 0.8% | 0.6% | 0.9% | 1.5% | 1.2% | -0.2% |
| ROIC | 22.8% | 21.4% | 22.7% | 22.8% | 21.8% | -1.0% |
| ROE | 16.9% | 16.2% | 17.5% | 17.5% | 16.6% | -0.9% |
| Net Debt/EBITDA | -0.7x | -0.6x | -0.4x | -0.3x | -0.4x | -0.1x |
Richelieu Hardware Ltd ($RCH) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 189 | 217 | 220 | 218 | 18.6% | 13.9% | 10.4% | 9.0% |
| EBITDA | 17 | 23 | 26 | 29 | 6.4% | 5.5% | 6.3% | 11.6% |
| Net Income | 11 | 15 | 17 | 19 | 6.3% | 5.2% | 6.1% | 9.6% |
Balance Sheet
|
|---|
| Cash | 0 | 0 | 21 | 43 | -100.0% | -97.7% | 0.3% | 45.9% |
| Short Term Debt | 4 | 2 | 4 | 4 | 19.0% | 4.0% | 53.9% | 93.1% |
| Long Term Debt | 1 | 2 | 0 | 1 | -38.2% | -24.7% | -92.8% | -60.4% |
Ratios
|
|---|
| Gross Margin | 8.8% | 10.6% | 11.8% | 13.2% | -1.0% | -0.9% | -0.4% | 0.3% |
| EBITDA Margin | 8.8% | 10.6% | 11.8% | 13.2% | -1.0% | -0.9% | -0.4% | 0.3% |
| Net Income Margin | 5.7% | 7.1% | 7.9% | 8.8% | -0.7% | -0.6% | -0.3% | 0.1% |
Revenue and profitability
Richelieu Hardware Ltd's Revenue jumped on 12.6%. Revenue growth showed slow down in FY16Q4 - it was 9.0% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 38.7 pp from -41.2% to -2.5% in FY2016.
Gross Margin decreased slightly on 0.52 pp from 11.7% to 11.2% in FY2016.
Net Income marign showed almost no change in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.2% in FY2016. The company's CAPEX/Revenue increased slightly on 0.65 pp from 0.59% in FY2013 to 1.2% in FY2016. It's average level of CAPEX/Revenue for the last three years was 1.2%.
Return on investment
The company operates at high and attractive ROIC (21.84%) while ROE is a bit lower (16.59%). ROIC decreased slightly on 0.98 pp from 22.8% to 21.8% in FY2016. ROE decreased slightly on 0.89 pp from 17.5% to 16.6% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.4x and Debt / EBITDA is 0.1x. Net Debt / EBITDA dropped on 0.1x from -0.3x to -0.4x in FY2016. Debt surged on 35.9% while cash surged on 45.9%.
Appendix 1: Peers in Consumer, Cyclical
Below you can find Richelieu Hardware Ltd benchmarking vs. other companies in Consumer, Cyclical 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 |
|---|
| 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 |
|---|
