Investors House

Country:
Sector:
Market cap (m):
Finland
Construction and Real Estate
EUR 30.74
Bloomberg:
Reuters:
Website:
INVEST FH
INVEST.HE
Share price (close):
EUR 4.83

Latest Reports

23 AUG 2022
Commissioned Research: Expanding Service business through M&A
Investors House reported Q2 revenue of EUR 1.9m, 5% below our estimate, mainly owing to Services. Net operating income (NOI) was EUR 0.6m, 29% below our EUR 0.9m forecast, as Real Estate posted elevated property costs. Adjusted EBIT including associates was EUR 0.5m, 37% below our EUR 0.8m estimate. The Q2 EPRA result was EUR 0.4m and declined by 48% y/ y owing to divestments conducted in Q4 2021. The share of revenue from Services was 57%. Investors House has succeeded in streamlining its operations and balance sheet by distributing Ovaro shares and an extra dividend of EUR 1 per share, which has reduced the EPRA NRV discount to 16% from 25% after the Q1 report and from 40% after the Q4 2021 report. Marketing material commissioned by Investors House.

22 AUG 2022
Commissioned Research: Flash comment: Q2 -Somewhat weak operational result as company is awaiting attractive investment opportunities
Investors House reported Q2 revenues of EUR 1.9m, 5% below our estimate, mainly owing to weaker top line in Services while Real Estate top line was as we expected. Net operating income was EUR 0.6m, 29% below our EUR 0.9m estimate as Real Estate-segment NOI was weak, 26% below our estimate. Services-segment EBIT was 30% below our estimate. The Q2 operative result (EPRA) was EUR 0.4m, down 48% y/y and was a result of significant disposals in the Real Estate-segment in Q4 2021. Reported EBIT of EUR 0.5m included no fair value changes. The 2022 guidance is intact: the operating result to decline significantly owing to divestments conducted in Q4 2021. EPRA NRV was EUR 6.46 per share, down from EUR 6.74 at the end of Q1 2022. EPRA NRV declined 20% from EUR 8.11 a year ago as an extra dividend of EUR 1.0 was distributed. The Services business accounted for 57% of sales and Real Estate for 43% compared to 54% and 46% a year ago, respectively. Equity ratio remained strong at 55%. Investors House trades at a 16% discount to EPRA NRV and the discount has declined from 25% after the Q1 report. The company has a very strong cash position following recent Real Estate divestments and is patiently waiting for new investment opportunities. We expect a slightly negative share price reaction on Investors House’s Q2 report.

17 MAY 2022
Commissioned Research: No hurry to conduct M&A in current market
Investors House reported Q1 revenue of EUR 1.8m, 16% below our estimate, mainly owing to Services, while net operating income (NOI) was EUR 0.7m, 8% below our EUR 0.8m forecast. Adjusted EBIT including associates was EUR 0.6m, 16% below our EUR 0.7m estimate. The Q1 EPRA result was EUR 0.3m and improved by 187% y/ y. The share of revenue from Services was 56%. Investors House has succeeded in streamlining its operations and balance sheet by distributing Ovaro shares and an extra dividend of EUR 1 per share, which has reduced the EPRA NRV discount to 25% from 40% after the Q4 report. Marketing material commissioned by Investors House.

16 MAY 2022
Commissioned Research: Flash comment: Stable Q1 and outlook for 2022 unchanged
Investors House reported Q1 revenues of EUR 1.8m, 16% below our estimate, mainly owing to weaker top line in Services. Net operating income was EUR 0.7m, 8% below our EUR 0.8m estimate. The Q1 operative result (EPRA) was EUR 0.3m, up 187% y/y. Reported EBIT of EUR 0.4m included EUR -0.1m of negative fair value changes while we calculate that the adjusted EBIT was EUR 0.6m, 16% below our estimate, explained by lower EBIT of Services. The 2022 guidance is intact: the operating result to decline significantly owing to divestments conducted in Q4 2021. On divisional level, Real Estate top line was above our estimates while Services sales were clearly below. It is worth noting that quarterly result in Services fluctuates owing to e.g. transaction timing. EPRA NRV was EUR 6.74 per share, down from EUR 8.27 at the end of Q4 2021. EPRA NRV declined 15% from EUR 7.90 a year ago as an extra dividend of EUR 1.0 was distributed. The Services business accounted for 56% of sales and Real Estate for 44% compared to 58% and 42% a year ago, respectively. Solidity declined to 54% from 58% in Q4 2021 owing to the extra dividend. Investors House trades at a 25% discount to EPRA NRV and the discount has declined from 40% after the Q4 report. We expect a neutral share price reaction on Investors House’s Q1 report.

7 MAR 2022
Commissioned Research: Strong balance sheet set for M&A and JVs
Investors House reported Q4 revenue of EUR 3.0m, in line with our estimate, while net operating income (NOI) was EUR 1.3m, 17% below our EUR 1.5m forecast. Adjusted EBIT including associates was EUR 2.0m, 20% above our EUR 1.7m estimate. However, there were net positive one-offs of EUR 0.3m, so when adjusting for these, EBIT was broadly in line with our estimate. The Q4 operating result was EUR 1.0m and improved by 102% y/y. The share of revenue from Services increased y/y to 81%, from 63%. The EUR 46m Kukkula JV in Jyväskylä should start to generate rental income in 2022. We estimate a EUR 0.7-0.8m positive impact on the associated companies line annually, although the long-term potential is more interesting from developing the area, mostly for residential use. With a growing pipeline and a growing Services business, we see good potential for further value creation. Marketing material commissioned by Investors House.

3 JAN 2022
Commissioned Research: Flash comment: Large EUR 1 extra dividend and strategy for 2023 confirmed
Investors House announced today that it will propose an extra dividend of EUR 1 (~16% dividend yield) for the EGM on 24 January. After recent asset divestments, Investors House has a cash position of EUR 23m, and EUR 23m of potential loan capacity. Additionally, EUR 2.8m will be used to repay debt and EUR 2.8m to be invested in equity stake in the Kukkula JV in Jyväskylä. This leaves Investors House with EUR 34m of potential investment ammo and in addition, Investors House has authorisation to issue 5m new shares if needed. At the CMD today, Investors House reiterated its 2023 strategy, which aims at a profitability development which enables an increasing dividend. The company will also focus on recurring revenues, which is supported by the fact that service income is now higher than income from property leases. In the coming years, Investors House will focus on development projects on its own or with partners, and on increasing property service business. Furthermore, Investors House will maintain its equity ratio above 45%; in Q3 2021 equity ratio was 49%. Investors House will provide a new guidance for 2022 in conjunction with the Q4 report on 3 March. The CMD does not trigger any estimate changes and we will update our numbers once the EUR 1 extra dividend proposal is approved by the EGM on 24 January.

26 NOV 2021
Commissioned Research: Speeding up capital recycling
On 25 November, Investors House announced the divestment of associated company IVH Kampus to Swedish real estate company Nyfosa for a total consideration of EUR 56.3m. Investors House owns 48% of IVH Kampus and will receive net proceeds of some EUR 15m from the divestment, taking its cash position to EUR 23m. We estimate a negative impact on Investors House's associates line of slightly more than EUR 1m annually, with a -21% impact on our adjusted EBIT for 2022E-23E. The company will use part of the funds to finance the EUR 46m Kukkula JV in Jyväskylä, Finland, of which it owns one-third. Although the negative EPS impact is ~30% in the near term, we believe the dividend growth story is intact and new investments will gradually contribute to earnings. We keep our fair value range unchanged at EUR 5.7-8.0 per share. Marketing material commissioned by Investors House.

25 NOV 2021
Commissioned Research: Flash comment: Divests associated company IVH Kampus and issues a positive profit warning for 2021
Investors House issued a positive profit warning today (25 November) following the sale of associated company IVH Kampus. Investors House now expects the operative result for 2021 to improve significantly from 2020 (previously: operative result to improve). Investors House announced it will sell its associated company IVH Kampus to Swedish real estate company Nyfosa. Investors House owns 48% of IVH Kampus. The transaction will bring Investors House service fees of one-off nature although the divestment will reduce associated company income, which will improve the operative result in Q4 as the deal is expected to close in the quarter. Investors House will continue to manage the IVH Kampus properties for an undisclosed period. The transaction results in realised value changes of EUR -0.7m. The transaction will improve Investors House’s cash position by EUR 15m (after repayment of associated company loans) which will increase the cash position to EUR 23m.The transaction highlights Investors House’s ambition to accelerate recycling of capital and the company recently announced the Kukkula JV in Jyväskylä, Finland, where Investors House owns one-third and will develop the area over the coming 10-15 years to develop e.g. residentials in the Jyväskylä region together with its JV partners. The announced transaction will lower the associated income from 2022 by over EUR 1m annually, we estimate, but will improve the financial position considerably to focus on development projects and continue to expand the service business.

16 NOV 2021
Commissioned Research: Transaction level high; JV moves forward
Investors House reported Q3 revenue of EUR 2.4m, 8% below our EUR 2.6m estimate, while net operating income (NOI) was EUR 1.1m, 17% below our EUR 1.3m forecast. Adjusted EBIT including associates was EUR 1.5m, 12% below our EUR 1.7m estimate. The Q2 operative result was EUR 0.9m and improved by 2% y/y. The share of revenue from Services increased y/y to 54%, from 36%. The EUR 46m Kukkula JV in Jyväskylä should start to generate rental income in 2022. We estimate a EUR 0.7m positive impact on the associated companies line annually, although the long-term potential is more interesting from developing the area, mostly for residential use. With a growing pipeline and a growing Service business, we see good potential for further value creation. Marketing material commissioned by Investors House.

15 NOV 2021
Commissioned Research: Flash Comment: Q3 operationally stable y/y and mix continues to improve
Investors House reported Q3 revenues of EUR 2.4m, compared to our EUR 2.6m estimate. Net operating income was EUR 1.1m versus our EUR 1.3m estimate. The Q3 operative result was EUR 0.9m, up 2% y/y. Reported EBIT of EUR 0.1m included e.g. EUR 0.9m of negative fair value changes due to the sale of a EUR 15.5m residential portfolio below accounted value. The 2021 guidance is reiterated: operating result will improve. On divisional level, Real Estate top line was slightly below our estimates while Services fell short most likely owing to lower AUM in Fund management. EPRA NRV was EUR 8.55 per share, up from EUR 8.11 at the end of Q2 2021. EPRA NRV increased from EUR 8.30 y/y and it is worth keeping in mind that EUR 0.8 dividend (0.27 cash and 0.53 Ovaro shares) has been distributed over the past 12 months. The Services business accounted for 54% of sales and Real Estate for 46% compared to 36% and 64% a year ago, respectively. The increase in Service share of sales comes from e.g. the acquisition of Juhola Asset Management. Investors House’s EUR 46m JV in Jyväskylä is progressing and will start generating rental income during Q4, although more focus will be on developing the area over the years to come Solidity remained strong at 49%. Investors House trades at a 33% discount to EPRA NRV. We expect a neutral to slightly positive share price reaction on Investors House’s Q3 report, mainly owing to the increased EPRA NRV, stable y/y performance and maintained positive guidance for 2021.

Equity analysts

Director
Senior Analyst, Sector Coordinator

Key persons

CEO: Petri Roininen

CFO: Matti Leinonen

Chairman: Tapio Rautiainen

Numbers
Export to Excel
Nordea
EURm
2018
2019
2020
2021
2022E
2023E
2024E
Total revenues
8,276.0
11,461.0
9,465.3
9,763.8
8,232.0
8,946.6
9,225.6
Ebitda (adj.)
3,611.00
5,273.00
333.36
4,585.76
2,860.81
3,065.56
3,188.72
Ebitda - margin
43.6%
46.0%
3.5%
47.0%
34.8%
34.3%
34.6%
EBIT (adj.)
3,611.0
5,273.0
333.4
4,585.8
2,860.8
3,065.6
3,188.7
EBIT (adj.) margin
43.6%
46.0%
3.5%
47.0%
34.8%
34.3%
34.6%
PTP (adj.)
3,020.0
4,060.0
-782.6
3,970.8
2,544.3
2,683.7
2,785.0
Net profit from cont oper (adj)
1,072.00
3,391.54
-1,103.50
3,810.70
2,164.73
2,361.62
2,450.83
Shareholders´ Equity
46,815.0
43,477.0
37,562.0
36,239.0
30,379.6
30,711.3
31,001.2
Net interest bearing debt
35,017.0
16,081.0
19,505.0
4,383.0
13,226.5
15,237.2
14,240.4
Net gearing
70.8%
36.0%
50.4%
11.9%
42.9%
48.9%
45.2%
Net debt/EBITDA
7.5
4.1
n.a.
n.a.
4.7
5.0
4.5
Free cash flow to equity
-4,909.7
-11,500.2
-2,205.4
13,687.5
-868.4
-94.2
3,036.9
Diluted number of shares in issue, year-end (m)
6,182.3
6,182.3
6,182.3
6,182.3
6,548.2
6,548.2
6,548.2
Nordea Markets estimates published on Aug 23, 2022
Source: Company data, Nordea estimates
Per share data and multiples
Export to Excel
Nordea
EUR and %
2018
2019
2020
2021
2022E
2023E
2024E
EPS (adj.)
0.17
0.48
-0.18
0.59
0.33
0.36
0.37
EPS (adj.) growth
-68.4%
176.0%
-137.3%
432.9%
-44.4%
9.1%
3.8%
DPS
0.23
0.25
0.27
0.29
0.31
0.33
0.35
BVPS
7.6
7.0
6.1
5.9
4.6
4.7
4.7
P/E (adj.)
34.6
13.5
n.a.
9.4
14.6
13.4
12.9
EV/Sales
9.04
4.99
5.90
5.31
7.02
6.69
6.38
EV/EBITDA (adj.)
20.71
10.84
167.64
11.31
20.21
19.52
18.45
EV/EBIT (adj.)
25.28
9.76
17.94
19.01
25.96
24.86
23.51
P/BV
0.79
0.92
0.94
0.95
1.04
1.03
1.02
Dividend yield
3.8%
3.9%
4.7%
5.2%
6.4%
6.8%
7.2%
FCF Yield bef A&D, lease adj
0.7%
3.9%
2.3%
-0.9%
6.7%
6.0%
9.6%
RoE
4.6%
3.7%
-3.8%
-2.3%
6.4%
7.7%
7.9%
ROIC
3.6%
5.7%
0.4%
n.a.
5.2%
5.1%
5.0%
Nordea Markets estimates published on Aug 23, 2022
Source: Company data, Nordea estimates

Source: Refinitiv