Capacent: New strategy is clicking into gear - ABG
This is a third party research report and does not necessarily reflect our views or values
Demand increasing in all segments
We raise both sales and margin assumptions
Fair value range of SEK 57-84 (45-68)
Capacent reported Q2 sales of SEK 59.3m (+30% y-o-y) with both the Swedish and Finnish operations showing a clear improvement over last year. In Sweden, we saw strong sales from Management Consulting (MC) and Capasearch, whereas Capacify posted a third consecutive quarter above SEK 15m in sales, and ended the quarter with a record high order book. Group sales were 11% better than we expected, and the deviation was mainly driven by the Swedish operations. Adj. EBIT was SEK 7.9m (-2.4m), 31% ahead of ABGSCe at SEK 6m and corresponding to an EBIT margin of 13.3%. The deviation was entirely driven by the Swedish operations, where MC showed signs of a sustained improvement in profitability since last year’s restructuring, with a Q2 EBIT margin of 21.4%. Capasearch also showed impressive profitability, with an EBIT margin of 35.7% in Q2; we consider this to represent a breakthrough for that part of the business given the sales increase of over 100% y-o-y.
Our positive revisions and a raised view towards ‘22e lead us to upgrade our fair value range to SEK 57-84 (45-68). The share is trading at a P/E of 6.8x and a dividend yield of 9.5% on our forecast for 2022.
We raise both sales and margin assumptions
Fair value range of SEK 57-84 (45-68)
Capacent reported Q2 sales of SEK 59.3m (+30% y-o-y) with both the Swedish and Finnish operations showing a clear improvement over last year. In Sweden, we saw strong sales from Management Consulting (MC) and Capasearch, whereas Capacify posted a third consecutive quarter above SEK 15m in sales, and ended the quarter with a record high order book. Group sales were 11% better than we expected, and the deviation was mainly driven by the Swedish operations. Adj. EBIT was SEK 7.9m (-2.4m), 31% ahead of ABGSCe at SEK 6m and corresponding to an EBIT margin of 13.3%. The deviation was entirely driven by the Swedish operations, where MC showed signs of a sustained improvement in profitability since last year’s restructuring, with a Q2 EBIT margin of 21.4%. Capasearch also showed impressive profitability, with an EBIT margin of 35.7% in Q2; we consider this to represent a breakthrough for that part of the business given the sales increase of over 100% y-o-y.
Our positive revisions and a raised view towards ‘22e lead us to upgrade our fair value range to SEK 57-84 (45-68). The share is trading at a P/E of 6.8x and a dividend yield of 9.5% on our forecast for 2022.