Report
Xior Take a few steps back, to aim higher afterwards
The share price has been caught in a vicious circle due to its debt ratio, declining P/NTA and stock overhang (Basecamp deal). Over 1Q23, the debt ratio rose slightly above our expectation at 52.9%, while P/NTA fell below 70%. The company will address this situation with an additional EUR 170m of asset disposal on top of 60m already announced and reduce the debt ratio again below 50% over the next 12 months. In this note we look at a couple of options. The potential for much more small non-core assets is limited. However, Xior has a sizeable non-yielding pipeline and land bank. We believe that these could become a source of cash to fix the balance sheet and reduce the NTA discount. This would safeguard the long-term EPS potential without giving up too much short term profitability. The results next week 4/8 could give a timeline for these disposals. We believe that it would be wise to sacrifice some medium term EPS potential to guarantee the long term potential. This note shows that Xior has many options open to reduce debt%, if it can pull the trigger. We maintain our BUY Rating and target price of 44 Euro, close to NTA.
Underlying
Xior Student Housing N.V.
Xior Student Housing NV is a Belgium-based company active in the field of residential Real Estate. The Company's offer is mainly for students and it includes several types of rooms for rent, including a student house in Leiden.
Provider
KBC Securities
We are a financial services provider for several types of professional clients, each with distinct needs.
Wim Lewi
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