Axactor (Buy, TP: NOK50.00) - Set for scale benefits to materialise
The bottom line was only just in the black in Q2, given the uptick in revenues and but increased costs. We have reduced our 2018–2020e net profit by EUR6m–7m, while we see positive signs from the solid collection performance on NPLs (5% higher than its business case) and REOs (42% better than business case). With the EUR93m REOs financing coming in place, we estimate Axactor’s current capex capacity to be around EUR450m, which when put to use could help extract scale benefits and improve margins going forward. We reiterate our BUY recommendation and NOK50 target price.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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