Gulf & Pacific Equities Corp. :GUF-CA: Earnings Analysis: Q2, 2017 By the Numbers : August 30, 2017

Gulf & Pacific Equities Corp. reports financial results for the quarter ended June 30, 2017.

We analyze the earnings along side the following peers of Gulf & Pacific Equities Corp. – Morguard Corporation and First Capital Realty Inc. (MRC-CA and FCR-CA) that have also reported for this period.

Highlights

  • Summary numbers: Revenues of CAD 1.02 million, Net Earnings of CAD 0.08 million.
  • Gross margins narrowed from 59.88% to 55.39% compared to the same period last year, operating (EBITDA) margins now 7.19% from 15.42%.
  • Year-on-year change in operating cash flow of -112.43% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings rose compared to same period last year, despite decline in operating and pretax margins.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2017-06-30 2017-03-31 2016-12-31 2016-09-30 2016-06-30
Relevant Numbers (Quarterly)
Revenues (mil) 1.02 0.94 0.89 1.01 1.11
Revenue Growth (%YOY) -8.18 -6.59 23.93 -7.63 1.83
Earnings (mil) 0.08 0.07 -2.02 0.1 0.07
Earnings Growth (%YOY) 13.24 -43.63 -939.17 -42.65 160.08
Net Margin (%) 7.78 7.08 -227.93 9.52 6.31
EPS 0 0 -0.1 0 0
Return on Equity (%) 0.55 0.46 -13.25 0.59 0.43
Return on Assets (%) 0.76 0.63 -18.71 0.87 0.63

Access our Ratings and Scores for Gulf & Pacific Equities Corp.

Market Share Versus Profits

Revenues History
Earnings History

GUF-CA‘s change in revenue this period compared to the same period last year of -8.18% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that GUF-CA is holding onto its market share. Also, for comparison purposes, revenues changed by 8.28% and earnings by 18.96% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s earnings rose year-on-year. But this growth has not come as a result of improvement in gross margins or any cost control activities in its operations. Gross margins went from 55.39% to 59.88% for the same period last year, while operating margins (EBITDA margins) went from 7.19% to 15.42% over the same time frame.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings

GUF-CA‘s change in operating cash flow of -112.43% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Margins

Despite a decline in operating (EBIT) margins as well as a decline in pretax margins, the company’s earnings rose.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for Gulf & Pacific Equities Corp.

Company Profile

Gulf & Pacific Equities Corp. engages in the acquisition, managing, and development of anchored shopping malls in rural centers in Alberta and British Columbia. Its current portfolio consists of properties located in Northern Alberta which include Tri-City Mall located in Cold Lake, Alberta; St. Paul Shopping Centre, St. Paul, Alberta; and a stand alone property in Three Hills, Alberta. The company was founded by Anthony Jan Cohen on April 8, 1998 and is headquartered in Toronto, Canada.

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