First Capital Realty Inc Net Income surged on 87.7% in 2016 and Revenue increased on 3.0%
14.02.2017 • About First Capital Realty Inc (
$FCR) • By InTwits
First Capital Realty Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- First Capital Realty Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 82.8%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 166 in 2016, 383 in 2015, 685 in 2014, 460 in 2013, 417 in 2012
- The company has potentially unprofitable business model: ROIC is at 4.6%
- It operates with high leverage: Net Debt/EBITDA is 10.3x while industry average is 6.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
First Capital Realty Inc ($FCR) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 579.3 | 631.6 | 648.4 | 656.6 | 676.3 | 3.0% |
| EBITDA | 343.6 | 365.8 | 374.8 | 375.3 | 386.8 | 3.1% |
| Net Income | 392.9 | 214.9 | 196.7 | 203.9 | 382.7 | 87.7% |
Balance Sheet
|
|---|
| Cash | 64.0 | 5.0 | 17.4 | 9.2 | 12.2 | 33.3% |
| Short Term Debt | 1,787.9 | 2,236.0 | 2,522.5 | 2,788.3 | 2,747.9 | -1.4% |
| Long Term Debt | 1,597.2 | 1,366.6 | 1,166.3 | 1,058.0 | 1,264.3 | 19.5% |
Cash flow
|
|---|
| Capex | 740.7 | 480.5 | 478.6 | 372.2 | 539.1 | 44.8% |
Ratios
|
|---|
| Revenue growth | 10.0% | 9.0% | 2.7% | 1.3% | 3.0% | |
| EBITDA growth | 7.8% | 6.5% | 2.5% | 0.1% | 3.1% | |
| EBITDA Margin | 59.3% | 57.9% | 57.8% | 57.2% | 57.2% | 0.0% |
| Net Income Margin | 67.8% | 34.0% | 30.3% | 31.0% | 56.6% | 25.5% |
| CAPEX, % of revenue | 127.9% | 76.1% | 73.8% | 56.7% | 79.7% | 23.0% |
| ROIC | 5.3% | 5.1% | 5.0% | 4.8% | 4.6% | -0.2% |
| ROE | 13.7% | 6.5% | 5.8% | 5.7% | 9.8% | 4.0% |
| Net Debt/EBITDA | 9.7x | 9.8x | 9.8x | 10.2x | 10.3x | 0.1x |
First Capital Realty Inc ($FCR) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 168 | 168 | 168 | 173 | 2.7% | 0.8% | 4.5% | 4.9% |
| EBITDA | 95 | 96 | 100 | 96 | 5.5% | 1.4% | 6.1% | 1.1% |
| Net Income | 67 | 170 | 88 | 58 | 45.9% | 79.9% | 257.4% | 48.2% |
Balance Sheet
|
|---|
| Cash | 8 | 10 | 81 | 12 | -65.5% | -16.4% | 777.5% | 33.3% |
| Short Term Debt | 2,629 | 2,808 | 3,009 | 2,748 | 0.5% | 7.5% | 11.5% | -1.4% |
| Long Term Debt | 1,050 | 1,078 | 1,022 | 1,264 | -3.5% | 0.6% | -6.2% | 19.5% |
Ratios
|
|---|
| EBITDA Margin | 56.4% | 57.4% | 59.4% | 55.6% | 1.5% | 0.3% | 0.9% | -2.1% |
| Net Income Margin | 39.8% | 101.2% | 52.7% | 33.4% | 11.8% | 44.5% | 37.3% | 9.8% |
Revenue and profitability
The company's Revenue increased on 3.0%. Revenue growth showed acceleration in 16Q4 - it increased 4.9% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.0 pp from 84.6% to 80.7% in 2016.
Net Income marign surged on 25.5 pp from 31.0% to 56.6% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 the company had CAPEX/Revenue of 79.7%. CAPEX/Revenue increased on 3.6 pp from 76.1% in 2013 to 79.7% in 2016. Average CAPEX/Revenue for the last three years was 70.1%.First Capital Realty Inc investments to CAPEX were large: 139% of EBITDA.
Return on investment
The company operates at low ROIC (4.57%) and ROE (9.77%). ROIC showed almost no change in 2016. ROE increased on 4.0 pp from 5.7% to 9.8% in 2016.
Leverage (Debt)
Debt level is 10.3x Net Debt / EBITDA and 10.4x Debt / EBITDA. Net Debt / EBITDA jumped on 0.1x from 10.2x to 10.3x in 2016. Debt increased on 4.3% while cash jumped on 33.3%.
Management team
Adam Elliot Paul is a the company's CEO. Adam Elliot Paul is a founder and has spent 3 years at the company. The company's CFO Kay Brekken has spent 4 years at the company.
Appendix 1: Peers in Financial
Below we provide First Capital Realty Inc 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 (53 companies) | | 7.0% | 9.1% | 3.6% | 5.8% |
|---|
| First Capital Realty Inc ($FCR) | | 9.0% | 2.7% | 1.3% | 3.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Olympia Financial Group Inc ($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 ($FN) | 67.8% | 76.5% | 77.1% | 74.6% | |
| |
|---|
| Median (36 companies) | 39.5% | 32.1% | 38.2% | 30.0% | 42.2% |
|---|
| First Capital Realty Inc ($FCR) | 59.3% | 57.9% | 57.8% | 57.2% | 57.2% |
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% |
| 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% | |
| Morguard Corp ($MRC) | 114.3% | 71.2% | 11.4% | 21.1% | 16.3% |
| |
|---|
| Median (55 companies) | 0.5% | 0.5% | 0.6% | 0.7% | 0.6% |
|---|
| First Capital Realty Inc ($FCR) | 127.9% | 76.1% | 73.8% | 56.7% | 79.7% |
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 ($MIC) | 11.9% | 9.6% | 9.7% | 9.5% | 9.4% |
| |
|---|
| Median (55 companies) | 4.4% | 3.3% | 3.9% | 2.8% | 3.0% |
|---|
| First Capital Realty Inc ($FCR) | 5.3% | 5.1% | 5.0% | 4.8% | 4.6% |
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 ($EQB) | 11.8x | 10.2x | 9.8x | 12.3x | 13.7x |
| |
|---|
| Median (27 companies) | 5.2x | 4.4x | 4.5x | 5.6x | 6.0x |
|---|
| First Capital Realty Inc ($FCR) | 9.7x | 9.8x | 9.8x | 10.2x | 10.3x |
