Panostaja Oyj´s Interim Report: November 1, 2017-July 31, 2018
Panostaja Oyj Interim Report September 6, 2018, 10:00 a.m.
May 1, 2018-July 31, 2018 (3 months)
- As a result of corporate acquisitions during the previous financial period, Grano's net sales for the review period increased by 39% from the corresponding period last year. EBIT increased to MEUR 1.8 from MEUR 1.4 in the reference period.
- Panostaja acquired a majority shareholding in Oscar Software, a company providing SMEs with ERP systems and financial management services.
- Panostaja paid off all of the parent company’s interest-bearing liabilities in the amount of MEUR 22.3 and made an agreement on a new MEUR 15.0 corporate acquisition limit.
- Net sales increased in five of the nine segments. Overall, the Group’s net sales for the review period increased by 52% to MEUR 52.3 (MEUR 34.5).
- EBIT improved in four of nine segments, and the entire Group’s EBIT weakened slightly from the reference period, standing at MEUR 1.4 (MEUR 1.6).
- Earnings per share (undiluted) were 0.0 cents (1.6 cents)
November 1, 2017-July 31, 2018 (9 months)
- Net sales increased in four of the nine business segments. Overall, the Group’s net sales for the review period increased by 37% to MEUR 143.1 (MEUR 104.3).
- EBIT improved in four of the nine segments, and the EBIT of the entire Group increased from MEUR 2.1 to MEUR 5.1.
- Panostaja divested itself of KotiSun and recorded a profit of MEUR 32.9 before taxes for the sale.
- Panostaja secured a majority shareholding in Carrot Palvelut Oy.
- Earnings per share (undiluted) were 51.3 cents (-3.3 cents).
CEO Juha Sarsama: Parent company achieves a debt-free balance, ensuring investment capacity
“During the review period, Panostaja paid off all of the parent company’s interest-bearing liabilities in the amount of MEUR 22.3 and made an agreement on a new MEUR 15.0 corporate acquisition limit to replace the previous limit. We optimized our capital structure, which will enable Panostaja to operate with a debt-free parent company balance, under normal circumstances. The corporate acquisition limit increases the flexibility of our financial structure and secures our readiness to make investments even between divestments. In our opinion, the debt-free parent company balance ensures that we can optimally seize identified investment opportunities and create value creation over the long term in accordance with our strategy. This payoff of the parent company’s debts will also significantly reduce Panostaja’s risk. The risk reduction is mirrored by Panostaja’s equity return requirement. As part of the capital structure reform, we have also updated Panostaja’s long-term financial goals.
Immediately at the start of the financial period, Panostaja obtained a majority shareholding in Oscar Software, a company specializing in ERP system development and the provision of various business services. Our shared journey with Oscar Software is off to a good start, and we see the company’s growth prospects as very interesting in the growing markets for ERP systems and financial management services.
The combined net sales of the Panostaja segments increased by more than 50% during the review period. The strong growth stems from new segments and the effect of the corporate acquisitions made by Grano during the previous financial period. Despite the increase in total net sales, the development of net sales was weaker than expected in many segments over the course of the financial period. Grano’s net sales during the period were weighed down by the continuously uneven demand for print products. Carrot’s low net sales resulted from the margin of the company’s industrial business in the Uusimaa region, which was lower than estimated, and the discontinuation of operations. For Selog, too, the third quarter was weak in terms of net sales due to customers requiring less installation work than was anticipated and the changes in the company’s key personnel hindering the ability to reach the set goals. We will also be continuing our measures to reverse the development of the net sales of CoreHW and Helakeskus.
The failure of the net sales development to meet our expectations was also mirrored by our EBIT, which dropped to MEUR 1.4 in the review period from MEUR 1.6 in the reference period. Grano’s net sales were encumbered by the installation operations of large prints and illuminated advertisements as the significantly increased volumes and large concurrent projects led to losses. Carrot’s net sales were hampered by the discontinuation of the poorly developing industrial operations in Uusimaa and the costs of the corporate acquisition that took place in the spring.
The corporate acquisitions market remained active in the period under review. As a result of the interest we have garnered thanks to our recent new investments and our own active examinations, our project flow has become even more diverse and a wide range of new investment targets are available for investigation. The competition for good investments has remained stiff, and the sellers often expect high payouts. However, the markets continue to provide opportunities for both new select acquisitions and divestments, and we will continue to actively explore new corporate acquisition opportunities.”
Key Figures
| MEUR | Q3 | Q3 | 9 months | 9 months | 12 months |
| 5/18- 7/18 | 5/17– 7/17 | 11/17- 7/18 | 11/16- 7/17 | 11/16- 10/17 | |
| Net sales, MEUR | 52.3 | 34.5 | 143.1 | 104.3 | 150.7 |
| EBIT, MEUR | 1.4 | 1.6 | 5.1 | 2.1 | 2.9 |
| Profit before taxes, MEUR | 0.8 | 1.3 | 3.5 | 1.0 | 1.2 |
| Profit/loss for the financial period, MEUR | 0.5 | 1.8 | 28.7 | 1.5 | 6.9 |
| Earnings per share, undiluted (EUR) | 0.00 | 0.02 | 0.51 | -0.03 | 0.03 |
| Equity per share (EUR) | 1.06 | 0.53 | 1.06 | 0.53 | 0.59 |
| Operating cash flow (MEUR) | 3.7 | 1.9 | 3.9 | 7.9 | 15.6 |
| Division of the net sales by segment MEUR | Q3 | Q3 | 9 months | 9 months | 12 months |
| Net sales | 5/18- 7/18 | 5/17– 7/17 | 11/17- 7/18 | 11/16- 7/17 | 11/16- 10/17 |
| Grano | 32.1 | 23.1 | 100.9 | 71.8 | 105.3 |
| KL-Varaosat | 3.7 | 3.5 | 10.6 | 9.9 | 13.5 |
| Selog | 2.5 | 2.9 | 6.8 | 8.0 | 10.8 |
| Helakeskus | 1.9 | 2.2 | 6.0 | 6.7 | 8.9 |
| Megaklinikka | 1.3 | 1.6 | 4.0 | 4.6 | 6.0 |
| Heatmasters | 1.3 | 1.3 | 3.5 | 3.5 | 5.3 |
| CoreHW | 0.7 | 2.5 | 1.0 | ||
| Carrot | 6.7 | 6.7 | |||
| Oscar Software | 2.1 | 2.1 | |||
| Others | 0.0 | 0.0 | 0.0 | 0.0 | -0.1 |
| Eliminations | -0.1 | 0.0 | -0.1 | -0.1 | |
| Group in total | 52.3 | 34.5 | 143.1 | 104.3 | 150.7 |
| Division of EBIT by segment MEUR | Q3 | Q3 | 9 months | 9 months | 12 months |
| EBIT | 5/18- 7/18 | 5/17– 7/17 | 11/17- 7/18 | 11/16- 7/17 | 11/16- 10/17 |
| Grano | 1.8 | 1.4 | 5.8 | 4.4 | 6.3 |
| KL-Varaosat | 0.4 | 0.3 | 0.9 | 0.7 | 1.0 |
| Selog | 0.2 | 0.3 | 0.4 | 0.5 | 0.8 |
| Helakeskus | 0.1 | 0.2 | 0.2 | 0.4 | 0.5 |
| Megaklinikka | 0.1 | 0.0 | -0.1 | -1.5 | -1.6 |
| Heatmasters | 0.2 | 0.0 | 0.1 | -0.3 | -0.2 |
| CoreHW | -0.1 | -0.6 | 0.0 | ||
| Carrot | -0.2 | -0.2 | |||
| Oscar Software | 0.0 | 0.0 | |||
| Others | -1.0 | -0.7 | -1.3 | -2.3 | -4.0 |
| Group in total | 1.4 | 1.6 | 5.1 | 2.1 | 2.9 |
Panostaja Group’s business operations for the current review period are reported in ten segments: Grano, Selog, Helakeskus, KL-Varaosat, Heatmasters, Megaklinikka, CoreHW, Carrot, Oscar Software and Others (parent company and associated companies).
In the review period, two associated companies, Ecosir Group Oy and Spectra Yhtiöt Oy, issued reports to the parent company. The result of the reported associated companies has developed well and its impact on profit/loss in the review period was MEUR 0.3 (MEUR 0.2), which is presented on a separate row under the EBIT in the consolidated income statement. During the period under review, Panostaja sold its shareholding in Juuri Partners Oy, which is a capital investment company making minority investments.
Outlook for the 2018 Financial Period
The corporate acquisitions market remained generally active in the period under review, and the availability of new opportunities has been good. The need to exploit ownership arrangements and growth opportunities in SMEs will continue, and as our own activity complements the supply of possible acquisitions from outside, there are plenty of possibilities for corporate acquisitions on the market. Panostaja aims to implement its growth strategy by means of controlled acquisitions in current investments, and new potential investments are also being actively studied. Divestment possibilities will also continue to be assessed actively as part of the ownership strategies of the investment targets.
The demand situation for different investments is thought to develop in the short term as follows:
- The demand for Selog, Helakeskus, CoreHW, KL-Varaosat and Carrot will remain good. The demand for the new segment, Oscar Software, will remain good.
- The demand for Grano and Heatmasters will remain satisfactory
- Demand for Megaklinikka will remain weak
Panostaja Oyj
Board of Directors
For further information, contact CEO Juha Sarsama: tel. +358 (0)40 774 2099
Panostaja Oyj
Juha Sarsama
CEO
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