WOOD Flash – Duna House: 3Q23 – doubling down on Italy with the Professione Casa acquisition

Duna House (DH) has reported its 3Q23 results, which – as expected – showed a slight deceleration in activity in the key Italian financial intermediation segment, due to seasonality and an overall continued softening of the local loan market. The Polish operations are performing ahead of expectations this year, as a function of a rebound in new mortgage origination, driven by the relaxation of the lending criteria and subsidised loans for first-time buyers. Hungary is in line with expectations, so far. Duna House expects earnings to reach the lower end of its guidance range. The full-year figures are due out at the end of February 2024; this is also when the company should make a dividend announcement. The Forest Hill residential project sales continue to generate cash inflows, and we may see the regular dividend boosted, again, by the proceeds from the real estate segment. That said, DH continues to screen the market for acquisition opportunities and, if a suitable target is found, the money may be reinvested into the business. Even against the backdrop of the recent slowdown, the last major deal – the acquisition of HGroup in Italy – was a very good step by management. We note that, recently, DH announced the purchase of a 10% stake in Professione Casa, striking a long-term cooperation agreement with the Italian real estate and financial brokerage.