Holloway Lodging Corp reports 102% EBITDA growth while 3.9% Revenue decline
09.03.2017 • About Holloway Lodging Corp (
$HLC) • By InTwits
Holloway Lodging Corp reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Holloway Lodging Corp has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.1%. At the same time it's a lot of higher than industry average of 7.8%.
- CAPEX is quite volatile: 9.9 in 2016, 29.5 in 2015, 14.4 in 2014, 4.0 in 2013, 4.8 in 2012
- The company has potentially unprofitable business model: ROIC is at 3.7%
- It operates with high leverage: Net Debt/EBITDA is 8.6x while industry average is 2.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Holloway Lodging Corp ($HLC) key annual financial indicators
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 58.4 | 60.0 | 97.5 | 110.7 | 106.4 | -3.9% |
| EBITDA | | 18.7 | 29.4 | 13.5 | 27.2 | 102.0% |
| Net Income | 19.7 | 4.5 | 27.3 | -3.8 | -1.0 | |
Balance Sheet
|
|---|
| Cash | 1.3 | 0.9 | 3.5 | 2.0 | 1.2 | -41.5% |
| Short Term Debt | 1.5 | 1.0 | 88.1 | 89.0 | 89.8 | 1.0% |
| Long Term Debt | 111.7 | 107.6 | 162.8 | 143.8 | 144.9 | 0.8% |
Cash flow
|
|---|
| Capex | 4.8 | 4.0 | 14.4 | 29.5 | 9.9 | -66.6% |
Ratios
|
|---|
| Revenue growth | -24.6% | 2.7% | 62.7% | 13.5% | -3.9% | |
| EBITDA growth | | | 57.2% | -54.2% | 102.0% | |
| EBITDA Margin | 0.0% | 31.2% | 30.2% | 12.2% | 25.5% | 13.4% |
| Net Income Margin | 33.8% | 7.5% | 27.9% | -3.4% | -1.0% | 2.5% |
| CAPEX, % of revenue | 8.2% | 6.7% | 14.8% | 26.7% | 9.3% | -17.4% |
| ROIC | 4.5% | 5.1% | 6.2% | -0.1% | 3.7% | 3.8% |
| ROE | 37.3% | 5.3% | 27.1% | -3.4% | -1.0% | 2.4% |
| Net Debt/EBITDA | | 5.8x | 8.4x | 17.1x | 8.6x | -8.6x |
Holloway Lodging Corp ($HLC) key quoterly financial indicators
| mln. CAD | 16Q1 | 16Q2 | 16Q3 | 16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 22 | 28 | 32 | 25 | -22.8% | -3.3% | 6.3% | 5.4% |
| EBITDA | 4 | 8 | 11 | 4 | -37.1% | 51.3% | 8.3% | |
| Net Income | -3 | -0 | 5 | -2 | -150.4% | | 105.4% | |
Balance Sheet
|
|---|
| Cash | 2 | 1 | 1 | 1 | -47.0% | -37.5% | -11.0% | -41.5% |
| Short Term Debt | 89 | 89 | 90 | 90 | 0.8% | 0.9% | 0.9% | 1.0% |
| Long Term Debt | 150 | 160 | 146 | 145 | 5.0% | 12.8% | 3.3% | 0.8% |
Ratios
|
|---|
| EBITDA Margin | 17.6% | 30.0% | 35.1% | 15.1% | -4.0% | 10.8% | 0.6% | 52.1% |
| Net Income Margin | -15.6% | -0.5% | 15.0% | -9.4% | -39.6% | 2.7% | 7.2% | 42.4% |
Revenue and profitability
Holloway Lodging Corp's Revenue decreased on 3.9%. Annual revenue decline showed slowdown in 16Q4 - revenue increased on 5.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 13.4 pp from 12.2% to 25.5% in 2016.
Net Income marign increased on 2.5 pp from -3.4% to -0.98% in 2016.
Capital expenditures (CAPEX) and working capital investments
In 2016 Holloway Lodging Corp had CAPEX/Revenue of 9.3%. Holloway Lodging Corp's CAPEX/Revenue increased on 2.6 pp from 6.7% in 2013 to 9.3% in 2016. For the last three years the average CAPEX/Revenue was 16.9%.
Return on investment
The company operates at low but positive ROIC (3.73%) and negative ROE (-0.99%). ROIC increased on 3.8 pp from -0.11% to 3.7% in 2016. ROE increased on 2.4 pp from -3.4% to -0.99% in 2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 8.6x and Debt / EBITDA is 8.6x. Net Debt / EBITDA dropped on 8.6x from 17.1x to 8.6x in 2016. Debt increased slightly on 0.86% while cash dropped on 41.5%.
Appendix 1: Peers in Consumer, Cyclical
Below we provide Holloway Lodging Corp benchmarking against other companies in Consumer, Cyclical 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 |
|---|
| New Flyer Industries Inc ($NFI) | | 38.6% | 21.0% | 6.1% | 47.8% |
| Hardwoods Distribution Inc ($HWD) | | 21.3% | 22.8% | 25.4% | 38.1% |
| Spin Master Corp ($TOY) | | 21.5% | 41.0% | 22.9% | 31.3% |
| Great Canadian Gaming Corp ($GC) | | -0.3% | 9.6% | 3.7% | 22.4% |
| CanWel Building Materials Group Ltd ($CWX) | | 2.1% | 4.6% | 8.6% | 18.6% |
| |
|---|
| Median (35 companies) | | 5.2% | 6.6% | 6.1% | 5.5% |
|---|
| Holloway Lodging Corp ($HLC) | | 2.7% | 62.7% | 13.5% | -3.9% |
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Innova Gaming Group Inc ($IGG) | 89.3% | 82.4% | 85.3% | 92.9% | 88.1% |
| Second Cup Ltd/The ($SCU) | 86.6% | 85.1% | 72.7% | 81.1% | |
| New Look Vision Group Inc ($BCI) | 71.8% | 72.6% | 72.6% | 78.7% | |
| Cara Operations Ltd ($CAO) | | 79.2% | 78.9% | 78.4% | |
| Canlan Ice Sports Corp ($ICE) | 71.6% | 69.7% | 70.7% | 78.2% | |
| |
|---|
| Median (37 companies) | 36.1% | 31.6% | 32.5% | 31.5% | 34.6% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Westshore Terminals Investment Corp ($WTE) | 49.7% | 65.9% | 60.9% | 59.6% | |
| Gamehost Inc ($GH) | 46.1% | 45.7% | 45.9% | 42.8% | 42.6% |
| Great Canadian Gaming Corp ($GC) | 16.8% | 41.1% | 40.1% | 36.6% | 34.4% |
| Restaurant Brands International Inc ($QSR) | | 51.1% | 20.8% | 33.9% | 44.4% |
| Cara Operations Ltd ($CAO) | | 9.6% | 22.6% | 32.6% | |
| |
|---|
| Median (38 companies) | 8.1% | 9.8% | 12.2% | 10.0% | 15.0% |
|---|
| Holloway Lodging Corp ($HLC) | | 31.2% | 30.2% | 12.2% | 25.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| WestJet Airlines Ltd ($WJA) | 7.9% | 19.5% | 18.6% | 22.5% | 22.4% |
| Westshore Terminals Investment Corp ($WTE) | 25.7% | 11.5% | 6.2% | 21.2% | |
| Innova Gaming Group Inc ($IGG) | 20.6% | 26.7% | 15.9% | 15.6% | 15.1% |
| Exchange Income Corp ($EIF) | 7.9% | 15.8% | 15.5% | 15.4% | 29.7% |
| Chorus Aviation Inc ($CHR.A) | 9.9% | 9.6% | 3.9% | 15.0% | 34.2% |
| |
|---|
| Median (41 companies) | 2.7% | 2.9% | 3.3% | 3.2% | 4.9% |
|---|
| Holloway Lodging Corp ($HLC) | 8.2% | 6.7% | 14.8% | 26.7% | 9.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Spin Master Corp ($TOY) | | 19.2% | 56.9% | 48.2% | 44.5% |
| Magna International Inc ($MG) | 16.3% | 18.6% | 25.2% | 21.9% | 21.2% |
| Linamar Corp ($LNR) | 12.9% | 17.0% | 21.7% | 23.7% | 19.8% |
| Sleep Country Canada Holdings Inc ($ZZZ) | | | 9.7% | 12.7% | 19.0% |
| Air Canada ($AC) | | 37.0% | 23.2% | 28.4% | 18.8% |
| |
|---|
| Median (41 companies) | 11.0% | 12.6% | 10.9% | 10.9% | 11.4% |
|---|
| Holloway Lodging Corp ($HLC) | 4.5% | 5.1% | 6.2% | -0.1% | 3.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| AutoCanada Inc ($ACQ) | 4.2x | 4.7x | 6.4x | 8.0x | 13.7x |
| Second Cup Ltd/The ($SCU) | 1.0x | 0.6x | 0.0x | 7.5x | 0.0x |
| Amaya Inc ($AYA) | 17.9x | 1.8x | 13.5x | 6.6x | 5.0x |
| Performance Sports Group Ltd ($PSG) | 2.6x | 3.5x | 12.2x | 6.5x | |
| Canlan Ice Sports Corp ($ICE) | 2.7x | 3.2x | 3.6x | 6.3x | |
| |
|---|
| Median (34 companies) | 1.9x | 2.5x | 2.3x | 2.4x | 1.9x |
|---|
| Holloway Lodging Corp ($HLC) | | 5.8x | 8.4x | 17.1x | 8.6x |
