Q1 2015 - Ouch!Hi All,
Normally, I would wait until I've had an opportunity to analyze MD&A prior to commenting, however, as I made a rather bold prediction a few weeks ago, I thought I would touch on some of the numbers that have just been released.
In the past year, DCI has only made a single significant transaction, EZE ATM in Australia, bringing on 1,325 ATMs for A$12.8 Million. I estimated the overall declines in revenue, due to a number of systemic factors, would not be completely offset by this purchase, and I therefore forecast that EBITDA would decrease year over year about 15%, from $19.37 Million to $16.8 Million. I was wrong. EBITDA actually decreased down to $16.6 Million.
Other key metrics are lower as well. From Q1 2014 to Q1 2015:
- Gross profit has decreased 9.8%;
- Gross profit margin has decreased by 3.9%; and
- Net loss jumped 72%, up to (-$2.9 Million).
As I've stated on numerous occasions, DCI has systemic issues which makes it difficult for them to grow interally, or even maintain the status quo. Unless DCI is actively and aggressively borrowing money and buying out their competition, their business will slowly and steadily decrease.
We'll see what the MD&A provides, however, there are still a couple a major hurdles that need to be overcome before the decline in revenue slows to a more manageable number.
More to follow....