Great Canadian Gaming Corp is an attractive growth stock: revenue grew 11.6% annually over the last three years
14.03.2017 • About Great Canadian Gaming Corp (
$GC) • By InTwits
Great Canadian Gaming Corp is a growth stock in Consumer, Cyclical industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Great Canadian Gaming Corp showed fast growth in the last financial year. Great Canadian Gaming Corp's revenue surged on 22.4% in FY2016. The growth also happened in EBITDA of 15.1% for the same period.
If we look for the longer period the company showed fast revenue growth of 11.6% from 2013 to 2016 annually. EBITDA surged on 5.20% from 2013 to 2016 annually.
Great Canadian Gaming Corp ($GC) financials for the last 5 years
| mln. CAD | 2012 | 2013 | 2014 | 2015 | 2016 |
|---|
| Revenue | 409 | 407 | 447 | 463 | 566 |
|---|
| Revenue growth, % | | -0.3% | 9.6% | 3.7% | 22.4% |
|---|
| SG&A, % | 23.8% | 23.6% | 22.8% | 25.9% | 27.8% |
|---|
| EBITDA | 69 | 167 | 179 | 169 | 195 |
|---|
| EBITDA growth, % | | 143.7% | 7.0% | -5.5% | 15.1% |
|---|
| EBITDA margin, % | 16.8% | 41.1% | 40.1% | 36.6% | 34.4% |
|---|
| Net Income | -28 | 63 | 78 | 75 | 76 |
|---|
| Net Income margin, % | -6.75% | 15.5% | 17.6% | 16.1% | 13.4% |
|---|
| |
| CAPEX | 25 | 25 | 15 | 15 | 39 |
|---|
| CAPEX/Revenue, % | 6.21% | 6.09% | 3.31% | 3.24% | 6.85% |
|---|
| Debt | 440 | 441 | 442 | 443 | 478 |
|---|
| Cash | 121 | 193 | 331 | 208 | 229 |
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| Net Debt/EBITDA | 4.6x | 1.5x | 0.6x | 1.4x | 1.3x |
|---|
| |
| ROIC, % | 2.2% | 15.1% | 15.5% | 14.3% | 15.2% |
|---|
| ROE, % | -7.9% | 21.5% | 22.2% | 19.1% | 19.8% |
|---|
Profitability and return on investment
EBITDA margin declined slightly from 36.6% in FY2015 to 34.4% in FY2016. If we look for the longer period EBITDA margin dropped on 6.70 pp from 41.1% in 2013 to 34.4% in 2016.
Great Canadian Gaming Corp shows attractive ROIC at 15.2% for the last 12 months which assumes stable development model. During the last three years it increased slightly - it was 15.1% in FY2013. It's average ROIC for the last three years was 15.0%.
The company showed big decline in Net Income margin of 2.70 pp from 16.1% to 13.4% in 2016. In the longer period Net Income margin dropped on 2.10 pp from 15.5% in 2013 to 13.4% in 2016.
Great Canadian Gaming Corp operates at ROE of 19.8%. It's average level of ROE for the last three years was 20.4%.
Capital expenditures (CAPEX)
To this fast growth the company had to invest in CAPEX.Great Canadian Gaming Corp's CAPEX/Revenue was 6.85% in FY2016. Great Canadian Gaming Corp's CAPEX/Revenue surged on 0.761 pp from 6.09% in 2013 to 6.85% in 2016. Average CAPEX/Revenue for the last three years was 4.47%.
Leverage (Debt)
Having such a fast growth profile the company keeps medium debt level at 1.3x Net Debt/EBITDA. If we look for the longer period Great Canadian Gaming Corp showed big decline in leverage of 0.20x from 1.48x in 2013 to 1.28x in 2016.
Valuation vs. comparable companies
The market closed today at 8.8x EV/EBITDA for Great Canadian Gaming Corp which is 60.1% lower than 22.1x Consumer, Cyclical peer group avearge calculated on the basis of 111 companies. The company trades at 19.4x P/E which is 52.8% lower than 41.1x Consumer, Cyclical industry avearge calculated based on 25 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 11.0x EV/(EBITDA-CAPEX) which is not surprisingly 730% higher than 1.3x Consumer, Cyclical industry avearge calculated based on 14 companies.
Management team
Great Canadian Gaming Corp is run by Rod N Baker as a CEO and by Andreas Michael Thompson as a CFO.
Peers in Consumer, Cyclical
Below you can find Great Canadian Gaming Corp benchmarking vs. other companies in Consumer, Cyclical 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 539.9% | |
| Restaurant Brands International Inc ($QSR) | | | 4.6% | 238.0% | 2.3% |
| DHX Media Ltd ($DHX.A) | | 33.9% | 19.4% | 127.4% | 15.4% |
| Amaya Inc ($AYA) | 311.5% | 85.2% | 254.0% | 113.8% | |
| NYX Gaming Group Ltd ($NYX) | 65.2% | 52.8% | 45.8% | 91.8% | |
| |
|---|
| Median (71 companies) | 5.9% | 5.3% | 7.0% | 7.5% | 5.8% |
|---|
| Great Canadian Gaming Corp ($GC) | | -0.3% | 9.6% | 3.7% | 22.4% |
Top companies by Gross margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| NYX Gaming Group Ltd ($NYX) | 91.3% | 86.7% | 88.3% | 85.6% | |
| Imvescor Restaurant Group Inc ($IRG) | 94.2% | 89.7% | 84.9% | 84.3% | 79.9% |
| DEQ Systems Corp ($DEQ) | 77.5% | 78.4% | 84.7% | 82.7% | |
| Second Cup Ltd/The ($SCU) | 86.6% | 85.1% | 72.7% | 81.1% | |
| New Look Vision Group Inc ($BCI) | 71.8% | 72.6% | 72.6% | 78.7% | |
| |
|---|
| Median (62 companies) | 37.0% | 36.1% | 36.2% | 33.7% | 36.2% |
|---|
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Westshore Terminals Investment Corp ($WTE) | 49.7% | 65.9% | 60.9% | 59.6% | |
| Gamehost Inc ($GH) | 46.1% | 45.7% | 45.9% | 42.8% | |
| Imvescor Restaurant Group Inc ($IRG) | 27.9% | 27.3% | 25.5% | 35.9% | 31.7% |
| Whistler Blackcomb Holdings Inc ($WB) | 36.0% | 35.9% | 36.4% | 35.4% | |
| MTY Food Group Inc ($MTY) | 36.3% | 38.7% | 37.0% | 34.9% | 36.0% |
| |
|---|
| Median (66 companies) | 7.9% | 9.8% | 10.1% | 9.0% | 10.5% |
|---|
| Great Canadian Gaming Corp ($GC) | 16.8% | 41.1% | 40.1% | 36.6% | 34.4% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Holloway Lodging Corp ($HLC) | 8.2% | 6.7% | 14.8% | 26.7% | |
| 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% | |
| 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 (71 companies) | 2.6% | 2.7% | 2.3% | 2.6% | 3.3% |
|---|
| Great Canadian Gaming Corp ($GC) | 6.2% | 6.1% | 3.3% | 3.2% | 6.9% |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Partner Jet Corp ($PJT) | -51.6% | -50.8% | 85.1% | 51.1% | |
| Westshore Terminals Investment Corp ($WTE) | 24.0% | 37.8% | 35.0% | 38.3% | |
| BRP Inc/CA ($DOO) | 29.8% | 26.8% | 32.3% | 35.3% | 26.6% |
| Cara Operations Ltd ($CAO) | | | 24.7% | 35.1% | |
| Jean Coutu Group PJC Inc/The ($PJC.A) | 34.4% | 29.8% | 29.2% | 30.2% | 27.3% |
| |
|---|
| Median (71 companies) | 9.7% | 9.7% | 9.6% | 8.5% | 10.8% |
|---|
| Great Canadian Gaming Corp ($GC) | 2.2% | 15.1% | 15.5% | 14.3% | 15.2% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Poydras Gaming Finance Corp ($PYD) | | | | 39.7x | |
| Mountain China Resorts Holding Ltd ($MCG) | | | 317.1x | 29.0x | |
| Rainmaker Entertainment Inc ($RNK) | | | | 18.6x | |
| Holloway Lodging Corp ($HLC) | | 5.8x | 8.4x | 17.1x | |
| Discovery Air Inc ($DA.A) | 2.8x | 3.8x | 7.5x | 11.4x | 7.9x |
| |
|---|
| Median (56 companies) | 1.3x | 1.8x | 2.1x | 2.2x | 1.7x |
|---|
| Great Canadian Gaming Corp ($GC) | 4.6x | 1.5x | 0.6x | 1.4x | 1.3x |
