Axactor (Buy, TP: NOK5.00) - REOs starting to have an impact
We expect Q1 EBIT of EUR6.4m, up 51% from EUR4.2m in Q4 2017, and a net loss of EUR0.3m, reflecting one-off costs relating to the EUR150m bond issue. We have cut our 2018e EPS by 19%, mainly due to higher interest costs after the bond issue, but raised our 2019e EPS by 1% mainly due to high NPL acquisition activity (we estimate EUR90m) in Q1. We reiterate our BUY with a NOK5 target price, and see improved quarterly earnings through 2018 as Axactor builds scale providing a potential a share price trigger going forward.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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