Axactor (Buy, TP: NOK5.00) - Scale effects set to kick in
Axactor reported Q1 results somewhat softer than we and the market had anticipated. While EBIT of EUR4.8m missed our estimate of EUR6.4m, the growth in gross collections from REOs showed a significant uptick from EUR2.0m in the previous quarter to EUR8.7m in Q1. As the ERC has nearly doubled in the past six months, we expect considerable growth in collections and increased scale benefits going forward. We have reduced our 2019–2020 EPS estimates by 7%, mainly as a result of higher amortisation assumptions from a higher share of REOs. We maintain our BUY and NOK5 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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