Canaccord Genuity Group Inc reports 16.3% revenue growth in FY2018 and 2.3 pp EBITDA Margin decline from 10.0% to 7.6%
06 Jun 2018 • About Canaccord Genuity Group Inc (
$CF.) • By InTwits
Canaccord Genuity Group Inc reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Canaccord Genuity Group Inc spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 0.0%. Average EBITDA Margin for the same period was -2.9%
- Canaccord Genuity Group Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
- The company has potentially unprofitable business model: ROIC is 3.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 16.3%. During FY2014-FY2018 Revenue growth bottomed in FY2016 at -10.6% and was accelerating since that time. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.3 pp from 10.0% to 7.6% in FY2018.
SG&A as a % of Revenue decreased slightly on 0.77 pp from 9.0% to 8.2% in FY2018. During the last 5 years SG&A as a % of Revenue topped in FY2016 at 11.0% and was declining since that time.
Net Income margin decreased on 3.1 pp from 4.3% to 1.3% in FY2018.
Investments (CAPEX, working capital and M&A)
Canaccord Genuity Group Inc's CAPEX/Revenue was 0.62% in FY2018. CAPEX/Revenue showed almost no change from FY2015 to FY2018. It's average level of CAPEX/Revenue for the last three years was 0.85%.
Return on investment
The company operates at low ROIC (3.9%) and ROE (0.4%). ROIC decreased slightly on 1.0 pp from 4.9% to 3.9% in FY2018. ROE decreased on 4.1 pp from 4.4% to 0.38% in FY2018.
Leverage (Debt)
Debt level is -5.4x Net Debt / EBITDA and 5.6x Debt / EBITDA. Debt dropped on 40.5% while cash jumped on 27.3%.
Canaccord Genuity Group Inc has no short term refinancing risk: cash is higher than short term debt (271.2%).
Financial and operational results
FY ended 31 Mar 2018
Canaccord Genuity Group Inc ($CF.) key annual financial indicators| mln. CAD | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 855 | 881 | 788 | 880 | 1,023 | 16.3% |
| SG&A | 84 | 95 | 87 | 79 | 84 | 6.3% |
| EBITDA | | 36 | -328 | 88 | 78 | -10.9% |
| Net Income | 51 | -13 | -358 | 38 | 13 | -65.8% |
Balance Sheet
|
|---|
| Cash | 364 | 322 | 428 | 678 | 863 | 27.3% |
| Short Term Debt | 929 | 690 | 457 | 679 | 318 | -53.1% |
| Long Term Debt | 0 | 0 | 0 | 56 | 119 | 110.6% |
Cash flow
|
|---|
| Capex | 15 | 5 | 11 | 5 | 6 | 21.3% |
Ratios
|
|---|
| Revenue growth | 7.3% | 3.0% | -10.6% | 11.6% | 16.3% | |
| EBITDA growth | | | -1,007.3% | -126.7% | -10.9% | |
|
|---|
| EBITDA Margin | | 4.1% | -41.7% | 10.0% | 7.6% | -2.3% |
| SG&A, % of revenue | 9.8% | 10.8% | 11.0% | 9.0% | 8.2% | -0.8% |
| Net Income Margin | 6.0% | -1.5% | -45.5% | 4.3% | 1.3% | -3.1% |
| CAPEX, % of revenue | 1.8% | 0.6% | 1.3% | 0.6% | 0.6% | 0.0% |
|
|---|
| ROIC | 4.0% | 0.4% | -23.1% | 4.9% | 3.9% | -1.0% |
| ROE | 4.4% | -2.7% | -50.9% | 4.4% | 0.4% | -4.1% |
| Net Debt/EBITDA | | 10.2x | | 0.7x | -5.4x | -6.1x |
Peers in Financial Services
Below we provide Canaccord Genuity Group Inc benchmarking against other companies in Financial Services 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Starvest ($SVE) | | -52.9% | -4.8% | 346.6% | |
| Henderson Group ($HGG) | 13.8% | 13.0% | -1.0% | 90.7% | |
| Arden Partners ($ARDN) | -21.3% | -31.0% | 6.8% | 78.9% | |
| Impax Asset Management Group ($IPX) | 10.3% | -3.1% | 6.8% | 55.2% | |
| Afh Financial Group ($AFHP) | 39.3% | 39.5% | 15.0% | 39.4% | |
| |
|---|
| Median (33 companies) | 7.5% | 2.7% | 6.8% | 12.9% | 30.7% |
|---|
| Canaccord Genuity Group Inc ($CF.) | | 3.0% | -10.6% | 11.6% | 16.3% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Record ($REC) | 99.6% | 99.3% | 99.0% | 98.8% | |
| London Capital Group Hldgs ($LCG) | 73.6% | 67.9% | 84.2% | 86.4% | |
| Schroders ($SDRC) | 77.7% | 78.3% | 79.9% | 80.0% | |
| First Property Group ($FPO) | 67.9% | 83.0% | 80.6% | 78.6% | |
| Walker Crips Group ($WCW) | 68.2% | 66.7% | 67.7% | 69.8% | |
| |
|---|
| Median (14 companies) | 51.3% | 52.5% | 59.3% | 51.4% | 45.3% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Real Estate Credit Investments Pcc ($RECP) | 77.0% | 80.3% | 79.3% | 79.5% | 81.8% |
| Hargreaves Lansdown ($HL.) | 58.7% | 51.2% | 57.5% | 69.3% | |
| Plus500 Ltd ($PLUS) | 63.5% | 48.2% | 46.0% | 59.3% | |
| First Property Group ($FPO) | 40.2% | 42.9% | 52.2% | 57.4% | |
| Livermore Investments Group Ltd ($LIV) | 78.8% | 83.5% | 71.9% | 56.8% | |
| |
|---|
| Median (30 companies) | 14.5% | 18.3% | 18.5% | 22.8% | 41.7% |
|---|
| Canaccord Genuity Group Inc ($CF.) | | 4.1% | -41.7% | 10.0% | 7.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Daishin Securities Co ($DSS) | 15.0% | 6.5% | 15.1% | 11.2% | |
| First Property Group ($FPO) | 0.3% | 0.1% | 6.4% | 8.5% | |
| Schroders ($SDRC) | 1.5% | 1.9% | 3.0% | 6.9% | |
| Leeds Group ($LDSG) | 0.6% | 0.9% | 11.5% | 5.6% | |
| Record ($REC) | 0.1% | 0.6% | 0.1% | 3.8% | |
| |
|---|
| Median (30 companies) | 0.7% | 1.0% | 0.8% | 1.0% | 0.9% |
|---|
| Canaccord Genuity Group Inc ($CF.) | 1.8% | 0.6% | 1.3% | 0.6% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Plus500 Ltd ($PLUS) | 164.3% | 116.5% | 118.9% | 143.2% | |
| Fulcrum Utility Services Ld ($FCRM) | | | 347.2% | 103.4% | 29.9% |
| Hargreaves Lansdown ($HL.) | 101.0% | 87.5% | 90.0% | 93.3% | |
| Guinness Peat Group ($GPG) | 10.0% | 13.7% | 23.8% | 28.8% | |
| Lighthouse Group ($LGT) | 8.6% | 14.6% | 25.7% | 26.6% | |
| |
|---|
| Median (34 companies) | 8.9% | 7.8% | 8.1% | 9.9% | 14.8% |
|---|
| Canaccord Genuity Group Inc ($CF.) | 4.0% | 0.4% | -23.1% | 4.9% | 3.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Daishin Securities Co ($DSS) | 10.7x | 8.0x | 13.4x | 12.7x | |
| First Property Group ($FPO) | 5.6x | 12.3x | 9.4x | 7.6x | |
| Leeds Group ($LDSG) | -0.5x | -0.3x | 1.4x | 2.6x | |
| S & U ($46IE) | 1.7x | 3.1x | 0.5x | 1.8x | 3.2x |
| Guinness Peat Group ($GPG) | -2.1x | -1.6x | -0.4x | 1.2x | |
| |
|---|
| Median (26 companies) | -2.1x | -1.2x | -1.2x | -1.6x | -0.6x |
|---|
| Canaccord Genuity Group Inc ($CF.) | | 10.2x | | 0.7x | -5.4x |
