Killam Properties Inc Net Income jumped on 96.7% in 2016 and EBITDA Margin increased slightly on 0.59 pp from 53.5% to 54.1%
14.02.2017 • About Killam Properties Inc (
$KMP) • By InTwits
Killam Properties Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Killam Properties Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 89.0%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 106 in 2016, 78.5 in 2015, 215 in 2014, 164 in 2013, 110 in 2012
- The company has potentially unprofitable business model: ROIC is at 5.0%
- It operates with high leverage: Net Debt/EBITDA is 10.9x while industry average is 6.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Killam Properties Inc ($KMP) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 135.8 | 143.5 | 149.6 | 168.1 | 176.5 | 5.0% |
| EBITDA | 75.4 | 79.2 | 79.9 | 89.9 | 95.4 | 6.1% |
| Net Income | 51.7 | 39.8 | 29.8 | 34.6 | 68.0 | 96.7% |
Balance Sheet
|
|---|
| Cash | 56.7 | 27.7 | 18.8 | 11.7 | 24.7 | 111.2% |
| Short Term Debt | 105.4 | 96.4 | 98.0 | 99.6 | 46.7 | -53.1% |
| Long Term Debt | 624.6 | 699.1 | 876.7 | 945.0 | 1,016.0 | 7.5% |
Cash flow
|
|---|
| Capex | 109.7 | 163.8 | 214.6 | 78.5 | 105.7 | 34.6% |
Ratios
|
|---|
| Revenue growth | 7.2% | 5.6% | 4.2% | 12.4% | 5.0% | |
| EBITDA growth | 6.7% | 5.0% | 0.9% | 12.6% | 6.1% | |
| EBITDA Margin | 55.5% | 55.2% | 53.4% | 53.5% | 54.1% | 0.6% |
| Net Income Margin | 38.1% | 27.7% | 19.9% | 20.6% | 38.5% | 18.0% |
| CAPEX, % of revenue | 80.7% | 114.1% | 143.5% | 46.7% | 59.9% | 13.2% |
| ROIC | 5.4% | 5.3% | 4.8% | 4.9% | 5.0% | 0.1% |
| ROE | 9.6% | 6.8% | 4.8% | 5.2% | 9.6% | 4.3% |
| Net Debt/EBITDA | 8.9x | 9.7x | 12.0x | 11.5x | 10.9x | -0.6x |
Killam Properties Inc ($KMP) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 42 | 44 | 45 | 44 | 6.5% | 5.9% | 4.2% | 3.6% |
| EBITDA | 20 | 25 | 26 | 24 | 5.9% | 7.3% | 1.7% | 10.4% |
| Net Income | 45 | 0 | 18 | 5 | 548.8% | -94.8% | 56.7% | -37.4% |
Balance Sheet
|
|---|
| Cash | 16 | 17 | 20 | 25 | -21.7% | 20.4% | 26.3% | 111.2% |
| Short Term Debt | 103 | 105 | 47 | 47 | 5.1% | 5.8% | -52.5% | -53.1% |
| Long Term Debt | 954 | 983 | 989 | 1,016 | 5.0% | 6.7% | 5.5% | 7.5% |
Ratios
|
|---|
| EBITDA Margin | 48.2% | 56.4% | 57.3% | 54.0% | -0.3% | 0.7% | -1.4% | 3.3% |
| Net Income Margin | 105.7% | 1.0% | 39.6% | 10.5% | 88.3% | -19.9% | 13.3% | -6.8% |
Revenue and profitability
The company's Revenue increased on 5.0%. Revenue growth showed slow down in 16Q4 - it was 3.6% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.59 pp from 53.5% to 54.1% in 2016.
Net Income marign surged on 18.0 pp from 20.6% to 38.5% in 2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 59.9% in 2016. CAPEX/Revenue dropped on 54.3 pp from 114% in 2013 to 59.9% in 2016. It's average CAPEX/Revenue for the last three years was 83.4%.Killam Properties Inc investments to CAPEX were large: 111% of EBITDA.
Return on investment
The company operates at low ROIC (4.98%) and ROE (9.57%). ROIC showed almost no change in 2016. ROE increased on 4.3 pp from 5.2% to 9.6% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 10.9x and Debt / EBITDA is 11.1x. Net Debt / EBITDA dropped on 0.6x from 11.5x to 10.9x in 2016. Debt increased slightly on 1.7% while cash jumped on 111%.
Appendix 1: Peers in Financial
Below we provide Killam Properties 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) | | 7.5% | 9.1% | 3.0% | 5.8% |
|---|
| Killam Properties Inc ($KMP) | | 5.6% | 4.2% | 12.4% | 5.0% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Olympia Financial Group Inc ($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 ($FN) | 67.8% | 76.5% | 77.1% | 74.6% | |
| |
|---|
| Median (36 companies) | 39.5% | 32.1% | 38.2% | 30.0% | 42.2% |
|---|
| Killam Properties Inc ($KMP) | 55.5% | 55.2% | 53.4% | 53.5% | 54.1% |
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 ($FCR) | 127.9% | 76.1% | 73.8% | 56.7% | 79.7% |
| StorageVault Canada Inc ($SVI) | 150.5% | 73.3% | 79.1% | 21.4% | |
| Morguard Corp ($MRC) | 114.3% | 71.2% | 11.4% | 21.1% | 16.3% |
| |
|---|
| Median (55 companies) | 0.5% | 0.5% | 0.6% | 0.7% | 0.6% |
|---|
| Killam Properties Inc ($KMP) | 80.7% | 114.1% | 143.5% | 46.7% | 59.9% |
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 ($MIC) | 11.9% | 9.6% | 9.7% | 9.5% | 9.4% |
| |
|---|
| Median (55 companies) | 4.4% | 3.3% | 3.9% | 2.8% | 3.0% |
|---|
| Killam Properties Inc ($KMP) | 5.4% | 5.3% | 4.8% | 4.9% | 5.0% |
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 ($EQB) | 11.8x | 10.2x | 9.8x | 12.3x | 13.7x |
| |
|---|
| Median (27 companies) | 5.2x | 4.4x | 4.5x | 5.6x | 6.0x |
|---|
| Killam Properties Inc ($KMP) | 8.9x | 9.7x | 12.0x | 11.5x | 10.9x |
