Kingsway Financial Services Inc revenue surged on 10.4% in 2016
08.03.2017 • About Kingsway Financial Services Inc (
$KFS) • By InTwits
Kingsway Financial Services Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kingsway Financial Services Inc doesn't have a profitable business model yet: 2016 ROIC is -1.6%
- Kingsway Financial Services Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
- The company has unprofitable business model: ROIC is at -1.6%
- It operates with high leverage: Net Debt/EBITDA is 7.9x while industry average is 6.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kingsway Financial Services Inc ($KFS) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 159.6 | 172.3 | 158.2 | 160.0 | 176.6 | 10.4% |
| Net Income | -52.1 | -36.9 | -12.8 | 1.1 | 0.8 | -27.5% |
Balance Sheet
|
|---|
| Cash | 80.8 | 98.6 | 71.2 | 51.7 | 36.5 | -29.5% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 190.1 | |
| Long Term Debt | 47.5 | 42.8 | 40.7 | 39.9 | 43.6 | 9.3% |
Cash flow
|
|---|
| Capex | 0.2 | 1.1 | 0.0 | 0.2 | 0.6 | 217.7% |
Ratios
|
|---|
| Revenue growth | -30.2% | 7.9% | -8.2% | 1.1% | 10.4% | |
| Net Income Margin | -32.6% | -21.4% | -8.1% | 0.7% | 0.5% | -0.2% |
| CAPEX, % of revenue | 0.1% | 0.7% | 0.0% | 0.1% | 0.4% | 0.2% |
| ROIC | -14.0% | -14.9% | 0.6% | -3.1% | -1.6% | 1.6% |
| ROE | -55.3% | -73.3% | -36.0% | 2.0% | 0.8% | -1.1% |
Kingsway Financial Services Inc ($KFS) key quoterly financial indicators
| mln. $ | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 37 | 41 | 46 | 53 | -16.3% | 5.1% | 18.8% | 38.3% |
| Net Income | -1 | -1 | 2 | 1 | -165.9% | -127.1% | | |
Balance Sheet
|
|---|
| Cash | 41 | 40 | 31 | 36 | -35.5% | -53.7% | -59.5% | -29.5% |
| Short Term Debt | 0 | 0 | 191 | 190 | | | | |
| Long Term Debt | 37 | 36 | 39 | 44 | -10.0% | -14.2% | -2.7% | 9.3% |
Ratios
|
|---|
| Net Income Margin | -3.9% | -1.2% | 3.4% | 2.3% | -9.0% | -6.1% | 5.5% | 8.1% |
Revenue and profitability
The company's Revenue surged on 10.4%. Revenue growth showed acceleration in 16Q4 - it increased 38.3% YoY.
Net Income marign showed almost no change in 2016.
Capital expenditures (CAPEX) and working capital investments
Kingsway Financial Services Inc's CAPEX/Revenue was 0.37% in 2016. The company showed almost no change in CAPEX/Revenue from 2013 to 2016.
Return on investment
The company operates at negative ROIC (-1.57%) and low but positive ROE (0.83%). ROIC increased slightly on 1.6 pp from -3.1% to -1.6% in 2016. ROE decreased slightly on 1.1 pp from 2.0% to 0.83% in 2016.
Leverage (Debt)
Debt surged on 486% while cash dropped on 29.5%.
Appendix 1: Peers in Financial
Below you can find Kingsway Financial Services 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 ($MRC) | | 27.2% | 9.2% | 58.8% | 4.6% |
| |
|---|
| Median (53 companies) | | 7.0% | 9.1% | 3.6% | 5.1% |
|---|
| Kingsway Financial Services Inc ($KFS) | | 7.9% | -8.2% | 1.1% | 10.4% |
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 ($SVI) | 150.5% | 73.3% | 79.1% | 21.4% | |
| |
|---|
| Median (55 companies) | 0.6% | 0.5% | 0.7% | 0.7% | 0.9% |
|---|
| Kingsway Financial Services Inc ($KFS) | 0.1% | 0.7% | 0.0% | 0.1% | 0.4% |
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 ($MIC) | 11.9% | 9.6% | 9.7% | 9.5% | 9.4% |
| |
|---|
| Median (55 companies) | 4.8% | 4.3% | 4.3% | 3.5% | 3.2% |
|---|
| Kingsway Financial Services Inc ($KFS) | -14.0% | -14.9% | 0.6% | -3.1% | -1.6% |
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 (28 companies) | 5.3x | 4.6x | 4.7x | 6.0x | 7.8x |
|---|
