AGF Management Ltd reports 16.1% EBITDA decline and 3.1 pp EBITDA Margin decline from 26.3% to 23.2%
24.01.2017 • About AGF Management Ltd (
$AGF.B) • By InTwits
AGF Management Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- AGF Management Ltd is a company in decline: FY2016 revenue growth was -5.0%, 5 years revenue CAGR was -6.5%
- EBITDA Margin is declining: 23.2% in FY2016 vs. 26.3% in FY2015 vs. 32.7% in FY2012
- AGF Management Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 6.3 in FY2016, 4.4 in FY2015, 1.4 in FY2014, 3.4 in FY2013, 9.5 in FY2012
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
AGF Management Ltd ($AGF.B) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 506.7 | 475.2 | 452.1 | 437.4 | 415.5 | -5.0% |
| EBITDA | 165.5 | 154.4 | 142.4 | 114.9 | 96.4 | -16.1% |
| Net Income | 52.3 | 22.4 | 61.3 | 48.0 | 42.4 | -11.7% |
Balance Sheet
|
|---|
| Cash | 371.3 | 369.9 | 261.5 | 48.7 | 43.1 | -11.5% |
| Short Term Debt | | | | 0.0 | 0.0 | |
| Long Term Debt | 308.4 | 307.9 | 308.2 | 268.8 | 188.2 | -30.0% |
Cash flow
|
|---|
| Capex | 9.5 | 3.4 | 1.4 | 4.4 | 6.3 | 43.3% |
Ratios
|
|---|
| Revenue growth | -12.8% | -6.2% | -4.9% | -3.3% | -5.0% | |
| EBITDA growth | -24.3% | -6.7% | -7.7% | -19.3% | -16.1% | |
| EBITDA Margin | 32.7% | 32.5% | 31.5% | 26.3% | 23.2% | -3.1% |
| Net Income Margin | 10.3% | 4.7% | 13.5% | 11.0% | 10.2% | -0.8% |
| CAPEX, % of revenue | 1.9% | 0.7% | 0.3% | 1.0% | 1.5% | 0.5% |
| ROE | 4.7% | 2.2% | 6.5% | 5.2% | 4.7% | -0.6% |
| Net Debt/EBITDA | -0.4x | -0.4x | 0.3x | 1.9x | 1.5x | -0.4x |
AGF Management Ltd ($AGF.B) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 99 | 106 | 108 | 102 | -7.9% | -5.5% | -5.3% | -1.1% |
| EBITDA | 23 | 22 | 24 | 28 | -22.7% | -31.6% | -20.2% | 18.4% |
| Net Income | 10 | 10 | 8 | 15 | -24.9% | -35.0% | -31.7% | 87.2% |
Balance Sheet
|
|---|
| Cash | 14 | 32 | 59 | 43 | -62.2% | -31.9% | 16.2% | -11.5% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 269 | 229 | 228 | 188 | 0.1% | -14.8% | -15.1% | -30.0% |
Ratios
|
|---|
| EBITDA Margin | 23.4% | 20.3% | 22.0% | 27.2% | -4.5% | -7.7% | -4.1% | 4.5% |
| Net Income Margin | 10.3% | 9.0% | 7.5% | 14.3% | -2.3% | -4.1% | -2.9% | 6.8% |
Revenue and profitability
AGF Management Ltd's Revenue decreased on 5.0%. Annual revenue decline showed slowdown in FY16Q4 - revenue decreased slightly on 1.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.5 pp from 13.0% to 16.5% in FY2016.
Net Income marign decreased slightly on 0.78 pp from 11.0% to 10.2% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.5% in FY2016. The company's CAPEX/Revenue increased slightly on 0.81 pp from 0.72% in FY2013 to 1.5% in FY2016. Average CAPEX/Revenue for the last three years was 0.95%.
Leverage (Debt)
Debt level is 1.5x Net Debt / EBITDA and 2.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 1.9x to 1.5x in FY2016. Debt dropped on 30.0% while cash dropped on 11.5%.
Management team
AGF Management Ltd's CEO Blake Charles Goldring is a founder and has spent 18 years at the company. The company's CFO is Adrian Basaraba. Adrian Basaraba has 2 years tenure at the company.
Appendix 1: Peers in Financial
Below you can find AGF Management Ltd benchmarking vs. other companies in Financial 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 |
|---|
| 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 |
|---|
