Actic Group AB (Buy, TP: SEK56.00) - Lower organic ambition drives FCF
Actic’s membership and ARPM sweltered in the hot weather in Q2. Targeting slower organic club openings makes sense to us, and while we have trimmed our 2018–2020e EPS by 3–8%, lower capex and new opening costs translate into 14–16% increases in our FCF forecasts, bulking up the group’s financial muscle for acquired growth. We reiterate our BUY and SEK56 target price, with a 2018e FCF yield of 12.0% highlighting the main attraction in the investment case.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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