Hammond Manufacturing Co Ltd reports 7.5 pp EBITDA Margin decline from 7.5% to in 2016
03.03.2017 • About Hammond Manufacturing Co Ltd (
$HMM.A) • By InTwits
Hammond Manufacturing Co Ltd reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts: It operates with medium-size leverage: Net Debt/EBITDA is 2.2x while industry average is 2.2x.
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Hammond Manufacturing Co Ltd ($HMM.A) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 92.4 | 92.9 | 105.3 | 117.2 | 115.7 | -1.2% |
| Gross Profit | 25.3 | 27.5 | 32.4 | 37.1 | | -100.0% |
| SG&A | 17.5 | 19.1 | 26.2 | 30.2 | | -100.0% |
| EBITDA | 4.8 | 6.1 | 8.1 | 8.8 | | -100.0% |
| Net Income | 1.7 | 2.3 | 3.6 | 3.6 | 0.7 | -80.7% |
Balance Sheet
|
|---|
| Cash | 0.4 | 0.8 | 0.3 | 0.3 | | -100.0% |
| Short Term Debt | 11.6 | 10.6 | 7.3 | 16.7 | | -100.0% |
| Long Term Debt | 1.9 | 1.2 | 0.4 | 0.7 | | -100.0% |
Cash flow
|
|---|
| Capex | 2.8 | 1.3 | 1.9 | 17.1 | | -100.0% |
Ratios
|
|---|
| Revenue growth | 8.1% | 0.6% | 13.3% | 11.3% | -1.2% | |
| EBITDA growth | -4.1% | 25.8% | 33.3% | 9.0% | | |
| Gross Margin | 27.4% | 29.6% | 30.8% | 31.7% | | -31.7% |
| EBITDA Margin | 5.2% | 6.5% | 7.7% | 7.5% | 0.0% | -7.5% |
| Net Income Margin | 1.8% | 2.4% | 3.5% | 3.0% | 0.6% | -2.4% |
| SG&A, % of revenue | 18.9% | 20.5% | 24.9% | 25.8% | | -25.8% |
| CAPEX, % of revenue | 3.1% | 1.4% | 1.8% | 14.6% | | -14.6% |
| ROIC | 6.4% | 8.2% | 12.7% | 12.2% | | -12.2% |
| ROE | 5.5% | 7.0% | 10.2% | 8.8% | | -8.8% |
| Net Debt/EBITDA | 2.7x | 1.8x | 0.9x | 2.0x | | -2.0x |
Hammond Manufacturing Co Ltd ($HMM.A) key quoterly financial indicators
| mln. CAD | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 32 | 28 | 28 | 28 | 4.1% | -3.4% | -6.7% | 1.0% |
| EBITDA | 3 | 0 | 1 | 2 | 4.2% | -89.7% | -54.1% | -17.8% |
| Net Income | 2 | -1 | -0 | -0 | 108.3% | -165.1% | -142.0% | -112.5% |
Balance Sheet
|
|---|
| Cash | 1 | 4 | 1 | 1 | 52.8% | 333.9% | 85.0% | 133.5% |
| Short Term Debt | 23 | 23 | 20 | 19 | 178.0% | 116.0% | 69.5% | 14.5% |
| Long Term Debt | 1 | 6 | 6 | 6 | -6.6% | 478.8% | 546.6% | 729.6% |
Ratios
|
|---|
| Gross Margin | 31.5% | 26.0% | 27.2% | 28.2% | -0.3% | -4.2% | -4.5% | -4.9% |
| EBITDA Margin | 8.1% | 0.7% | 3.6% | 6.8% | 0.0% | -5.7% | -3.7% | -1.6% |
| Net Income Margin | 5.4% | -2.2% | -1.1% | -0.5% | 2.7% | -5.4% | -3.4% | -4.4% |
Revenue and profitability
The company's Revenue decreased slightly on 1.2%. Annual revenue decline showed slowdown in FY16Q4 - revenue increased slightly on 1.0%.
Net Income marign decreased on 2.4 pp from 3.0% to 0.59% in FY2016.
Management team
Robert Frederick Hammond is a the company's CEO. Robert Frederick Hammond is a founder and has spent 40 years at the company. Hammond Manufacturing Co Ltd's CFO Alexander Stirling has spent 11 years at the company.
Appendix 1: Peers in Industrial
Below we provide Hammond Manufacturing Co Ltd benchmarking against other companies in Industrial industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Progressive Waste Solutions Ltd ($BIN) | | 16.1% | 7.8% | 1.8% | 59.4% |
| Baylin Technologies Inc ($BYL) | | 16.5% | -44.0% | -4.1% | 47.5% |
| CCL Industries Inc ($CCL.B) | | 44.4% | 36.8% | 17.5% | 30.8% |
| Stantec Inc ($STN) | | 17.9% | 13.3% | 14.4% | 30.5% |
| Avigilon Corp ($AVO) | | 72.6% | 41.9% | 17.7% | 22.2% |
| |
|---|
| Median (51 companies) | | 5.3% | 9.9% | 7.7% | 3.2% |
|---|
| Hammond Manufacturing Co Ltd ($HMM.A) | | 0.6% | 13.3% | 11.3% | -1.2% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pure Technologies Ltd ($PUR) | 77.9% | 78.0% | 77.5% | 75.6% | |
| WSP Global Inc ($WSP) | 81.1% | 83.2% | 81.0% | 74.0% | 76.7% |
| Avigilon Corp ($AVO) | 49.3% | 54.2% | 56.6% | 57.4% | 52.0% |
| Stantec Inc ($STN) | 55.0% | 54.7% | 54.9% | 54.5% | 54.1% |
| IWG Technologies Inc ($IWG) | 53.3% | 54.0% | 49.0% | 47.8% | 54.9% |
| |
|---|
| Median (49 companies) | 23.4% | 23.4% | 20.9% | 21.5% | 22.2% |
|---|
| Hammond Manufacturing Co Ltd ($HMM.A) | 27.4% | 29.6% | 30.8% | 31.7% | |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Canadian National Railway Co ($CNR) | 46.5% | 45.9% | 46.8% | 50.9% | 54.3% |
| Canadian Pacific Railway Ltd ($CP) | 26.1% | 32.4% | 43.7% | 48.9% | 51.6% |
| Badger Daylighting Ltd ($BAD) | 25.7% | 25.9% | 27.9% | 24.6% | 24.2% |
| IWG Technologies Inc ($IWG) | 12.7% | 25.5% | 20.0% | 24.0% | 26.9% |
| Winpak Ltd ($WPK) | 19.5% | 18.6% | 18.7% | 22.7% | 23.5% |
| |
|---|
| Median (53 companies) | 10.5% | 8.4% | 8.6% | 9.5% | 11.1% |
|---|
| Hammond Manufacturing Co Ltd ($HMM.A) | 5.2% | 6.5% | 7.7% | 7.5% | |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Newalta Corp ($NAL) | 21.7% | 34.5% | 35.1% | 42.0% | 9.6% |
| Cargojet Inc ($CJT.A) | 7.0% | 6.3% | 54.1% | 41.3% | |
| Algoma Central Corp ($ALC) | 15.9% | 7.3% | 5.0% | 27.4% | 58.2% |
| Canadian Pacific Railway Ltd ($CP) | 20.2% | 20.2% | 21.9% | 22.7% | 19.0% |
| Canadian National Railway Co ($CNR) | 17.4% | 18.7% | 18.9% | 21.5% | 22.4% |
| |
|---|
| Median (54 companies) | 3.2% | 3.7% | 4.4% | 3.7% | 4.3% |
|---|
| Hammond Manufacturing Co Ltd ($HMM.A) | 3.1% | 1.4% | 1.8% | 14.6% | |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IBI Group Inc ($IBG) | 4.8% | -9.0% | 11.6% | 21.9% | 26.2% |
| IWG Technologies Inc ($IWG) | 17.0% | 36.3% | 23.4% | 27.2% | 25.7% |
| Winpak Ltd ($WPK) | 20.4% | 18.0% | 18.3% | 22.6% | 21.8% |
| Toromont Industries Ltd ($TIH) | 28.8% | 25.8% | 24.3% | 23.5% | 21.7% |
| Intertape Polymer Group Inc ($ITP) | 12.3% | 13.7% | 22.5% | 23.0% | 21.0% |
| |
|---|
| Median (55 companies) | 12.2% | 9.7% | 11.0% | 8.3% | 9.0% |
|---|
| Hammond Manufacturing Co Ltd ($HMM.A) | 6.4% | 8.2% | 12.7% | 12.2% | |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Conifex Timber Inc ($CFF) | | 2.7x | 6.1x | 35.9x | 3.6x |
| Ag Growth International Inc ($AFN) | 2.9x | -0.1x | 2.1x | 14.1x | |
| Cargojet Inc ($CJT.A) | 1.5x | 1.5x | 31.5x | 12.9x | |
| Progressive Waste Solutions Ltd ($BIN) | 4.5x | 3.3x | 2.9x | 10.6x | 3.8x |
| Finning International Inc ($FTT) | 2.3x | 1.8x | 1.4x | 9.4x | 2.5x |
| |
|---|
| Median (49 companies) | 1.5x | 1.5x | 1.3x | 1.0x | 1.9x |
|---|
| Hammond Manufacturing Co Ltd ($HMM.A) | 2.7x | 1.8x | 0.9x | 2.0x | |
