WOOD Flash – Duna House: a good set of 3Q24 numbers; postcard from WOOD' s Winter Wonderland conference

In this flash note, we review Duna House’s (DH) 3Q24 results (which were solid), and summarise the takes from our meeting with the company during our Winter Wonderland conference, held in Prague, last week (3-6 December). DH's recent results continue to be fuelled by tailwinds from real estate sales and – as of late – the inflection of the Italian market, where the mortgage market has started to pick up, after 2Y of declines. In the past 3Y, DH has paid out EUR 25m of dividends to its shareholders. We estimate that, in the next 2Y (2025-26E), DH could pay out over EUR 20m of dividends (a c.13-15% dividend yield p.a. in the next 2Y). We estimate that around half of this amount may be financed by the net proceeds from asset sales, with the rest via the FCF generated from the brokerage business. Alternatively, the company may spend the disposal proceeds on M&A, either entering a new market, or strengthening its presence in some of the countries where it operates already (we see the largest potential in Italy, DH's main market currently). In case of a sizeable acquisition, DH may also tap the market for new equity. Currently, the two founders control 78% of the shares. DH's long-term goal is to increase the free float to around 50%, doubling it from the current levels. This could boost the liquidity of the shares (LTM ADTV of only c.EUR 50k).