Catella
Catella - Expect Q4 EBIT will not be enough today (ABG Sundal Collier)
2020-02-21 08:32
Q4’19 EBIT of SEK 122m, 31% above ABGSCe
AUM, which drives estimates, however 5% below ABGSC
Expect share to trade down today on lower DPS
Strong Q4’19 EBIT beat, 31% above ABGSC estimateCatella reported an Q4’19 EBIT of SEK 122m (60m), 31% above ABGSC estimates, and up more than 100% y-o-y, given weak Q4’18. The strong EBIT result is driven by the performance of the Property Investment Management and Corporate Finance segment. However, what is negative is that Catella continues to see net outflows from the important Systematic Macro fund on the back of weak performance of the fund during H2’19. The AUM in Systematic Macro is down 9% q-o-q, with net outflows of SEK ~4bn in Q4. Focus on the investor call at 09.00 will of course be on if the outflows has continued into 2020 and their strategic plan for the fund going forward, and their thoughts of potentially selling the business segment. The Property investment management segment came in roughly in line with our estimates, however the AUM was flat q-o-q which was lower than we had expected, coming in at SEK 100.5bn in total. The DPS was announced to be SEK 0.9, which is 0.3 SEK lower than last year of SEK 1.20, which probably will disappoint the market. However, this should come as no surprise since this is stipulated terms by the bond holders and should be known by the market.
Q4 details: adj. AUM -2% q-o-q and 5% below ABGSCe
Catella reported sales of SEK 722m (-1% vs. ABG at SEK 732m). The EBITDA came in at SEK 157m (28% vs. ABG at SEK 123m), while EBIT came in at SEK 122m (31% vs. ABG at SEK 92m), which is equivalent to an EBIT Margin: 16.9% (4.2% higher than ABG at 12.7%). The AUM came in at SEK 171bn, -7% q-o-q (-2% q-o-q adjusting for Systematic equity that is being closed) and was 5% below ABG at SEK 181bn. It seems that we have been too optimistic on our AUM assumptions, which we need to review.
Share price view
The stock has performed well into the numbers, up 14% last month but since AUM is lower than expected -
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