Equity Financial Holdings Inc CAPEX surged on 1,533% in 2016 and Revenue jumped on 66.5%
16.02.2017 • About Equity Financial Holdings Inc (
$EQI) • By InTwits
Equity Financial Holdings Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Equity Financial Holdings Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2012-2016 was 0.0%. On average EBITDA Margin was -2.8% for the sames years0
- Equity Financial Holdings Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.7%. At the same time it's a lot of higher than industry average of 1.7%.
- CAPEX is quite volatile: 2.0 in 2016, 0.12 in 2015, 0.091 in 2014, 0.096 in 2013, 0.83 in 2012
- The company has potentially unprofitable business model: ROIC is at 2.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Equity Financial Holdings Inc ($EQI) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 8.081 | 16.889 | 21.267 | 17.849 | 29.722 | 66.5% |
| EBITDA | -1.585 | 0.505 | -3.007 | -1.667 | 3.093 | |
| Net Income | 0.534 | 41.782 | -2.919 | -2.157 | 1.690 | |
Balance Sheet
|
|---|
| Cash | 34.429 | 43.376 | 33.231 | 44.326 | 53.013 | 19.6% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.830 | 0.096 | 0.091 | 0.120 | 1.959 | 1,532.5% |
Ratios
|
|---|
| Revenue growth | -77.3% | 109.0% | 25.9% | -16.1% | 66.5% | |
| EBITDA growth | -112.5% | -131.9% | -695.4% | -44.6% | -285.5% | |
| EBITDA Margin | -19.6% | 3.0% | -14.1% | -9.3% | 10.4% | 19.7% |
| Net Income Margin | 6.6% | 247.4% | -13.7% | -12.1% | 5.7% | 17.8% |
| CAPEX, % of revenue | 10.3% | 0.6% | 0.4% | 0.7% | 6.6% | 5.9% |
| ROIC | -4.9% | -0.4% | -3.8% | -2.6% | 2.7% | 5.4% |
| ROE | 1.0% | 56.3% | -3.1% | -2.3% | 1.8% | 4.1% |
| Net Debt/EBITDA | | -85.9x | | | -17.1x | -17.1x |
Equity Financial Holdings Inc ($EQI) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 6 | 7 | 8 | 9 | 35.1% | 52.6% | 80.5% | 91.7% |
| EBITDA | 0 | 0 | 1 | 2 | | | | |
| Net Income | 0 | 0 | 0 | 1 | | | | |
Balance Sheet
|
|---|
| Cash | 42 | 57 | 57 | 53 | 14.4% | 18.7% | 44.3% | 19.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| EBITDA Margin | 7.1% | 3.7% | 9.2% | 18.0% | 9.9% | 27.5% | 19.8% | 19.1% |
| Net Income Margin | 2.7% | 0.7% | 5.2% | 11.3% | 9.1% | 23.8% | 18.4% | 17.5% |
Revenue and profitability
The company's Revenue surged on 66.5%. Revenue growth showed acceleration in 16Q4 - it increased 91.7% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 19.7 pp from -9.3% to 10.4% in 2016.
Net Income marign surged on 17.8 pp from -12.1% to 5.7% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Equity Financial Holdings Inc had CAPEX/Revenue of 6.6%. CAPEX/Revenue increased on 6.0 pp from 0.57% in 2013 to 6.6% in 2016. Average CAPEX/Revenue for the last three years was 2.6%.To secure this fast growth the company invested a large share of EBITDA (63.3%) to CAPEX.
Return on investment
The company operates at low ROIC (2.74%) and ROE (1.79%). ROIC increased on 5.4 pp from -2.6% to 2.7% in 2016. ROE increased on 4.1 pp from -2.3% to 1.8% in 2016.
Leverage (Debt)
The company has no debt. Cash jumped on 19.6%.
Appendix 1: Peers in Financial
Below you can find Equity Financial Holdings Inc 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) | | 7.0% | 9.0% | 3.6% | 5.1% |
|---|
| Equity Financial Holdings Inc ($EQI) | | 109.0% | 25.9% | -16.1% | 66.5% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Olympia Financial Group Inc ($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 ($FN) | 67.8% | 76.5% | 77.1% | 74.6% | |
| |
|---|
| Median (36 companies) | 43.9% | 35.0% | 41.4% | 36.2% | 45.4% |
|---|
| Equity Financial Holdings Inc ($EQI) | -19.6% | 3.0% | -14.1% | -9.3% | 10.4% |
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 ($SVI) | 150.5% | 73.3% | 79.1% | 21.4% | |
| |
|---|
| Median (55 companies) | 0.5% | 0.5% | 0.7% | 0.7% | 0.6% |
|---|
| Equity Financial Holdings Inc ($EQI) | 10.3% | 0.6% | 0.4% | 0.7% | 6.6% |
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 ($MIC) | 11.9% | 9.6% | 9.7% | 9.5% | 9.4% |
| |
|---|
| Median (55 companies) | 4.8% | 4.3% | 4.3% | 3.5% | 3.2% |
|---|
| Equity Financial Holdings Inc ($EQI) | -4.9% | -0.4% | -3.8% | -2.6% | 2.7% |
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 | 4.8x | 4.7x | 6.0x | 9.7x |
|---|
