Novaturas to buy back and distribute almost 76,000 of its shares to employees for EUR 0.25 million

Novaturas, the largest tour operator in the Baltics, has announced that it will make a contribution of almost EUR 0.25 million to buy back up to 1% of the company’s shares via the Nasdaq stock exchange. The company intends to distribute the purchased shares to employees over the next three years.

“In the tourism sector, employees are the backbone of the business. That is why we have clearly identified their engagement and well-being as a priority in Novaturas’ new growth strategy. Stock options are one of the motivational tools that are still rarely used in Lithuania, but are popular abroad and appreciated by employees, which increases engagement, helps retain existing talent and attract new talent. As we are focused on sustainable long-term growth of the company, we grant stock options to Novaturas employees in Lithuania, Latvia and Estonia,” says Vitalij Rakovski, CEO of Novaturas.

The company’s General Meeting of Shareholders approved the granting of stock options to 144 Novaturas Group employees in the middle of last year. A total of 75,997 shares of the company are to be granted by 2026. Novaturas buys back its shares on the stock exchange by auction from 14 to 20 September at a price of EUR 3.27 per share.

According to Mr Rakovski, Novaturas could to buy back its shares at any time until mid-2025. However, the decision to do so now is based on the market circumstances - the company’s strong financial performance in the first half of the year, its financial stability and its optimistic expectations for the future, based on third-party financial analysts’ assessments.

Swedbank’s financial analysts have assigned a 'buy' rating to Novaturas Group's shares, with a target recommended share price of EUR 4.5. This is approximately one-third higher than the current price of Novaturas shares on the stock exchange. Meanwhile, according to the latest estimate of analysts at Enlight research, a target recommended base share price is EUR 4.27 (approximately one-third higher). Enlight research estimates the share price ceiling at EUR 4.74 in the optimistic scenario and EUR 3.81 in the pessimistic scenario.

As practice shows, it is common for listed companies to take advantage of situations and buy back shares when the market price is below what the company’s management believes the company is worth or when there are reasonable expectations of growth potential. Buying back shares also increases value for the company’s shareholders by providing a greater share of profits per share. In addition, share buybacks often lead to a higher share price.

This year, Novaturas recorded a very successful first half of the year, with its half-year EBITDA exceeding that of the whole of the preceding half of 2019. In addition, the company has revised and improved its profitability forecast for this year for the second time: the Group has raised its EBITDA forecast from EUR 3-5 million to EUR 6-8 million, and its net profit from EUR 1-3 million to EUR 4-6 million*. 

In the first half of 2023, the company generated revenues of EUR 102.5 million, up 12% compared to this time last year. In January-June, the company served 124,000 travellers, a 3% decrease compared to 2022. However, at the launch of the 2024 summer season, the company announced that it expects a 15% growth in terms of the number of customers served next summer.

*These estimates were published prior to the decision of Vilnius Regional Court of 11 September in the case between the Company and UAB GetJet Airlines, in which the Company was awarded EUR 1.15 million in liquidated damages, together with interest at 8% per annum from 1 January 2021. This decision is not expected to have a material impact on operations. Furthermore, the judgment of the Court of First Instance is not final and not conclusive and can be appealed against to the Court of Appeal within 30 days. The Company will analyse this judgment and decide on possible further actions.

About the company

Novaturas Group is the largest and the only charter flights‘ local tour operator in the Baltic States, offering summer and winter trips to more than 30 destinations worldwide and more than 100 tours. In 2022, Novaturas Group recorded revenues of EUR 197 million and served 267 000 passengers in Lithuania, Latvia and Estonia. 

Vygantas Reifonas

CFO of AB Novaturas