Intact Financial Corp reports 23.4% Net Income decline while 5.2% Revenue growth
08.02.2017 • About Intact Financial Corp (
$IFC) • By InTwits
Intact Financial Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Intact Financial Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's in pair with industry average of 4.9%.
- CAPEX is quite volatile: 610 in FY2016, 426 in FY2015, 292 in FY2014, 159 in FY2013, 144 in FY2012
- The company has potentially unprofitable business model: ROIC is at 3.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Intact Financial Corp ($IFC) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 7,074 | 7,371 | 7,961 | 8,092 | 8,511 | 5.2% |
| Net Income | 571 | 431 | 782 | 706 | 541 | -23.4% |
Balance Sheet
|
|---|
| Cash | 172 | 99 | 89 | 141 | 168 | 19.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 1,143 | 1,143 | 1,143 | 1,143 | 1,393 | 21.9% |
Cash flow
|
|---|
| Capex | 73 | 98 | 97 | 89 | 120 | 34.8% |
Ratios
|
|---|
| Revenue growth | 28.9% | 4.2% | 8.0% | 1.6% | 5.2% | |
| Net Income Margin | 8.1% | 5.8% | 9.8% | 8.7% | 6.4% | -2.4% |
| CAPEX, % of revenue | 1.0% | 1.3% | 1.2% | 1.1% | 1.4% | 0.3% |
| ROIC | 4.4% | 2.8% | 5.4% | 4.8% | 3.7% | -1.1% |
| ROE | 13.3% | 9.2% | 16.1% | 13.4% | 9.6% | -3.8% |
Intact Financial Corp ($IFC) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 2,064 | 2,129 | 2,215 | 2,103 | 1.2% | 6.9% | 9.7% | 3.1% |
| Net Income | 152 | 93 | 125 | 171 | -14.6% | -53.3% | -4.6% | -13.6% |
Balance Sheet
|
|---|
| Cash | 221 | 174 | 137 | 168 | 18.8% | 8.1% | -25.9% | 19.1% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 1,392 | 1,392 | 1,392 | 1,393 | 21.8% | 21.8% | 21.8% | 21.9% |
Ratios
|
|---|
| Net Income Margin | 7.4% | 4.4% | 5.6% | 8.1% | -1.4% | -5.6% | -0.8% | -1.6% |
Revenue and profitability
The company's Revenue increased on 5.2%. Revenue growth showed slow down in 16Q4 - it was 3.1% YoY.
Net Income marign decreased on 2.4 pp from 8.7% to 6.4% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.4% in 2016. Intact Financial Corp's CAPEX/Revenue showed almost no change from 2013 to 2016. It's average CAPEX/Revenue for the last three years was 1.2%.
Return on investment
The company operates at low ROIC (3.69%) and ROE (9.62%). ROIC decreased slightly on 1.1 pp from 4.8% to 3.7% in 2016. ROE decreased on 3.8 pp from 13.4% to 9.6% in 2016.
Leverage (Debt)
Debt jumped on 21.9% while cash surged on 19.1%.
Management team
Charles Brindamour is a the company's CEO. Charles Brindamour is a founder and has spent 10 years at the company. Intact Financial Corp's CFO Louis Marcotte has spent 5 years at the company.
Appendix 1: Peers in Financial
Below you can find Intact Financial Corp benchmarking vs. other companies in Financial industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Grenville Strategic Royalty Corp ($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 (53 companies) | | 7.5% | 9.1% | 3.6% | 5.7% |
|---|
| Intact Financial Corp ($IFC) | | 4.2% | 8.0% | 1.6% | 5.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Olympia Financial Group Inc ($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 (55 companies) | 0.5% | 0.5% | 0.6% | 0.7% | 0.6% |
|---|
| Intact Financial Corp ($IFC) | 1.0% | 1.3% | 1.2% | 1.1% | 1.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| CI Financial Corp ($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 (55 companies) | 4.8% | 4.3% | 3.9% | 2.8% | 3.0% |
|---|
| Intact Financial Corp ($IFC) | 4.4% | 2.8% | 5.4% | 4.8% | 3.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Element Financial Corp ($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 |
|---|
