TSX:SCU

Stock Analysis Report

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Executive Summary

The Second Cup Ltd. operates as a specialty coffee retailer in Canada. More Details


Snowflake Analysis

Imperfect balance sheet and overvalued.

Share Price & News

How has Second Cup's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SCU's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0%

SCU

-2.3%

CA Hospitality

-1.6%

CA Market


1 Year Return

-37.1%

SCU

-28.5%

CA Hospitality

-7.8%

CA Market

Return vs Industry: SCU underperformed the Canadian Hospitality industry which returned -28.5% over the past year.

Return vs Market: SCU underperformed the Canadian Market which returned -7.8% over the past year.


Shareholder returns

SCUIndustryMarket
7 Day0%-2.3%-1.6%
30 Day2.3%1.0%-2.8%
90 Day25.0%0.2%5.5%
1 Year-37.1%-37.1%-26.0%-28.5%-4.6%-7.8%
3 Year-66.0%-66.0%-5.5%-13.5%7.6%-2.8%
5 Year-63.3%-63.3%52.4%35.2%40.9%19.2%

Price Volatility Vs. Market

How volatile is Second Cup's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Second Cup undervalued compared to its fair value and its price relative to the market?

0.69x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate SCU's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate SCU's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: SCU is unprofitable, so we can't compare its PE Ratio to the CA Hospitality industry average.

PE vs Market: SCU is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SCU's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: SCU is good value based on its PB Ratio (0.7x) compared to the CA Hospitality industry average (1x).


Next Steps

Future Growth

How is Second Cup forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

62.5%

Forecasted Consumer Services industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Second Cup has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Second Cup performed over the past 5 years?

19.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SCU is currently unprofitable.

Growing Profit Margin: SCU is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: SCU is unprofitable, but has reduced losses over the past 5 years at a rate of 19.7% per year.

Accelerating Growth: Unable to compare SCU's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SCU is unprofitable, making it difficult to compare its past year earnings growth to the Hospitality industry (-6.7%).


Return on Equity

High ROE: SCU has a negative Return on Equity (-31.52%), as it is currently unprofitable.


Next Steps

Financial Health

How is Second Cup's financial position?


Financial Position Analysis

Short Term Liabilities: SCU's short term assets (CA$11.8M) do not cover its short term liabilities (CA$24.7M).

Long Term Liabilities: SCU's short term assets (CA$11.8M) do not cover its long term liabilities (CA$65.6M).


Debt to Equity History and Analysis

Debt Level: SCU's debt to equity ratio (0.2%) is considered satisfactory.

Reducing Debt: SCU's debt to equity ratio has reduced from 44.9% to 0.2% over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: SCU has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: SCU has less than a year of cash runway if free cash flow continues to grow at historical rates of 8.3% each year.


Next Steps

Dividend

What is Second Cup current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate SCU's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate SCU's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if SCU's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if SCU's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: SCU is not paying a notable dividend for the Canadian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of SCU's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.0yrs

Average management tenure


CEO

Steve Pelton

1.25yrs

Tenure

CA$536,282

Compensation

Mr. Steven J. Pelton, Sr., also known as Steve, is Chief Executive Officer and President of The Second Cup Ltd since June 5, 2019 and serves as its Non-Independent Director since June 5, 2019. Mr. Pelton s ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD401.40K) is above average for companies of similar size in the Canadian market ($USD176.89K).

Compensation vs Earnings: Insufficient data to compare Steve's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Steven Pelton
President1.25yrsCA$536.28k2.25%
CA$ 463.7k
Ba Le
Chief Financial Officer3.25yrsCA$260.96k0.23%
CA$ 46.6k
Paul Pascal
Vice President of Operations0.92yrno datano data
Mangala D'Sa
Vice President of Marketing & Innovation0.67yrno datano data
Tara Ramsay
Vice President of People1yrno datano data

1.0yrs

Average Tenure

Experienced Management: SCU's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Steven Pelton
President1.25yrsCA$536.28k2.25%
CA$ 463.7k
Michael Bregman
Independent Chairman6.75yrsCA$150.00kno data
Aaron Serruya
Independent Director3.08yrsCA$25.00k0.55%
CA$ 112.5k
Alan Simpson
Independent Director6.75yrsCA$25.00k0.30%
CA$ 61.2k
Alton McEwen
Independent Director6.75yrsCA$30.00k0.57%
CA$ 117.3k
Stephen Kelley
Independent Director1.08yrsCA$12.35kno data
Michael Serruya
Independent Director3.08yrsCA$25.00k0.55%
CA$ 112.5k
Melinda Lee
Non-Independent Director2.5yrsCA$78.01k0.13%
CA$ 26.3k

3.1yrs

Average Tenure

57yo

Average Age

Experienced Board: SCU's board of directors are considered experienced (3.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 14.6%.


Top Shareholders

Company Information

The Second Cup Ltd's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Second Cup Ltd
  • Ticker: SCU
  • Exchange: TSX
  • Founded: 1975
  • Industry: Restaurants
  • Sector: Consumer Services
  • Market Cap: CA$20.624m
  • Shares outstanding: 22.92m
  • Website: https://www.secondcup.com

Number of Employees


Location

  • The Second Cup Ltd
  • 6303 Airport Road
  • 2nd Floor
  • Mississauga
  • Ontario
  • L4V 1R8
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SCUTSX (The Toronto Stock Exchange)YesCommon SharesCACADDec 2004
SCUP.FOTCPK (Pink Sheets LLC)YesCommon SharesUSUSDDec 2004

Biography

The Second Cup Ltd. operates as a specialty coffee retailer in Canada. The company offers coffee products and beverages. As of December 28, 2019, it operated approximately 212 franchised and 32 company own ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/09/24 05:30
End of Day Share Price2020/09/23 00:00
Earnings2020/06/27
Annual Earnings2019/12/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.