Axactor (Buy, TP: NOK50.00) - Set for growth in REO collections
We expect Axactor to report Q2 EBIT of NOK9.1m, on increasing collections of unsecured and REO portfolios. It signed a considerable amount of forward flow contracts in Q2, requiring future capex of close to ~EUR200m. Reported Q2 capex was however modest at EUR10m versus our EUR110m estimate, due to delayed collection versus our previous forecasts. This is the main reason we have cut our 2018e EPS by 29% and 2019e EPS by 16%. For 2020e, the timing effect is less important and our EPS is unchanged. We reiterate BUY and our NOK50 target price ahead of the report, due on 25 July at 07:00 CET.Axactor AB (publ), formerly known as Nickel Mountain Group publ AB, is a Sweden-based company, which is primarily involved in the credit management service industry. The Company is focused on non-performing loan (NPL) sector that includes credit card debt, private leasing, residual mortgages, consumer loans, mortgages, secured loans with collateral, small business loans, among others. The Company is active within the debt purchase and debt collection area. It specializes in the amicable collection, legal collection, surveillance and recovery services. Axactor AB (publ) operates through its wholly owned subsidiary ALD Abogados SL, which is a Spain-based legal debt collection platform. The Company has a portfolio pipeline in Spain, Germany and Italy, among others.
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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