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Amaya Inc Net Income dropped on 35.4% in 2016 while Revenue increased on 7.8%

22.03.2017 • About Amaya Inc ($AYA) • By InTwits

Amaya Inc reported 2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is quite volatile: 37.1% in 2016, 31.0% in 2015, 39.3% in 2014, 38.2% in 2013, 7.2% in 2012
  • Amaya Inc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.2%. At the same time it's in pair with industry average of 45.3%.
  • CAPEX is quite volatile: 6.8 in 2016, 16.1 in 2015, 17.0 in 2014, 16.9 in 2013, 6.7 in 2012
  • The company has potentially unprofitable business model: ROIC is at 6.4%
  • It operates with high leverage: Net Debt/EBITDA is 5.0x 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.

Amaya Inc ($AYA) key annual financial indicators

mln. $201220132014201520162016/2015
Gross Profit75
Net Income-7-28-7211136-35.4%
Balance Sheet
Short Term Debt6212334845.1%
Long Term Debt1231813,0112,4372,381-2.3%
Cash flow
Revenue growth311.5%85.2%254.0%113.8%7.8%
EBITDA growth-616.8%889.7%264.0%68.6%29.0%
Gross Margin98.4%0.0%
EBITDA Margin7.2%38.2%39.3%31.0%37.1%6.1%
Net Income Margin-9.3%-20.0%-1.4%19.6%11.8%-7.9%
SG&A, % of revenue96.0%84.1%65.8%68.4%64.7%-3.7%
CAPEX, % of revenue8.7%11.9%3.4%1.5%0.6%-0.9%
Net Debt/EBITDA17.9x1.8x13.5x6.6x5.0x-1.6x

Amaya Inc ($AYA) key quoterly financial indicators

mln. $16Q116Q216Q316Q4YoY change
Net Income56231345416.8%-85.2%-56.5%
Balance Sheet
Short Term Debt5970644850.2%123.6%43.7%45.1%
Long Term Debt2,4032,3792,3862,381-28.2%-10.0%-27.2%-2.3%
EBITDA Margin 36.4% 34.5% 39.4% 38.1%-2.9%-0.5%13.1%14.4%
Net Income Margin 19.3% 7.9% 4.7% 14.6%15.3%-64.3%-7.1%20.3%

Revenue and profitability

Amaya Inc's Revenue increased on 7.8%. Revenue growth showed slow down in 16Q4 - it was 5.9% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 38.1 pp from -42.4% to -4.2% in 2016.

SG&A as a % of Revenue decreased on 3.7 pp from 68.4% to 64.7% in 2016.

Net Income marign decreased on 7.9 pp from 19.6% to 11.8% in 2016.

Capital expenditures (CAPEX) and working capital investments

The company's CAPEX/Revenue was 0.59% in 2016. CAPEX/Revenue dropped on 11.4 pp from 11.9% in 2013 to 0.59% in 2016. For the last three years the average CAPEX/Revenue was 1.8%.

Return on investment

The company operates at low ROIC (6.40%) and ROE (9.55%). ROIC increased on 2.2 pp from 4.2% to 6.4% in 2016. ROE decreased on 7.2 pp from 16.7% to 9.6% in 2016.

Leverage (Debt)

Debt level is 5.0x Net Debt / EBITDA and 5.7x Debt / EBITDA. Net Debt / EBITDA dropped on 1.6x from 6.6x to 5.0x in 2016. Debt decreased slightly on 1.7% while cash decreased on 2.4%.

Management team

Amaya Inc's CEO is Rafael Ashkenazi "Rafi". Rafael Ashkenazi "Rafi" is a founder and has 2 years tenure at the company.

Appendix 1: Peers in Consumer, Cyclical

Below we provide Amaya Inc 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 ($CWX)2.1%4.6%8.6%18.6%
Median (35 companies)4.7%6.6%6.1%4.6%
Amaya Inc ($AYA)85.2%254.0%113.8%7.8%

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)34.1%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 ($CAO)9.6%22.6%32.6%
Median (38 companies)8.6%9.8%12.2%10.0%15.0%
Amaya Inc ($AYA)7.2%38.2%39.3%31.0%37.1%

Top companies by CAPEX/Revenue, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Holloway Lodging Corp ($HLC)8.2%6.7%14.8%26.7%9.3%
WestJet Airlines Ltd ($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 ($EIF)7.9%15.8%15.5%15.4%29.7%
Median (41 companies)2.7%2.9%3.3%3.5%5.0%
Amaya Inc ($AYA)8.7%11.9%3.4%1.5%0.6%

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 ($AC)37.0%23.2%28.4%18.8%
Median (41 companies)11.0%12.6%10.9%10.9%11.4%
Amaya Inc ($AYA)-2.7%6.7%4.0%4.2%6.4%

Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Holloway Lodging Corp ($HLC)5.8x8.4x17.1x8.6x
AutoCanada Inc ($ACQ)4.2x4.7x6.4x8.0x13.7x
Second Cup Ltd/The ($SCU)1.0x0.6x0.0x7.5x0.0x
Performance Sports Group Ltd ($PSG)2.6x3.5x12.2x6.5x
Canlan Ice Sports Corp ($ICE)2.7x3.2x3.6x6.3x
Median (34 companies)1.7x2.8x2.3x2.4x1.9x
Amaya Inc ($AYA)17.9x1.8x13.5x6.6x5.0x