Actic Group AB (Buy, TP: SEK43.00) - New CEO making his mark
Actic’s new CEO, Anders Carlbark, signalled focus on average revenue per member rather than membership growth, cutting into our 2019–2021e FCF generation. At the same time, a slower pace of organic club openings makes sense to us, particularly if balanced with attractive acquisitions, better utilising the underlying FCF capacity, which was re-established in 2018. We reiterate our BUY, but have cut our target price to SEK43 (48) with a 2019e FCF yield of 12.8% highlighting the attractive investment case in our view.Actic Group AB is a Sweden-based company, which is primarily engaged in the provision of a range of recreational services. The Company operates a net of over 150 gym clubs located in Sweden, Norway, Finland, Germany and Austria. Actic Group AB provides personalized programs for individuals and groups, swimming lessons, access to swimming facilities and a number of pre-scheduled fitness activities, among others. The Company's operational model bases on one-time visits and subscriptions/club memberships, with an emphasis on serving small to mid-sized town inhabitants in cooperation with local municipalities. It also provides online booking services for memberships and classes via Internet portal.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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