MaxFastigheter - Q1 was quiet, keep an eye on the bid
NOI of SEK 40m, up 22% y-o-y EO adj. rec PTP up 18% y-o-y & CEPS up 5% Small value uplifts and lower cash yield Slow activity illuminated by SEK 31m acquisition The quarter saw one transaction (Blandaren 1 in Karlstad), which added SEK 31m to the portfolio and SEK 2.7m in rental value, as it had access to the property from 1 February. As not much more revenue volume was added, net operating income (NOI) grew by 1.8% from the previous quarter and up 22% y-o-y. An already known EO item related to bond refinancing activities caused recurring pre-tax profit (rec.
PTP) to fall by 23% y-o-y (to SEK 11.7m), but adj. it increased by 18%, to SEK 18m. Cash earnings decreased by 54% y-o-y (48% q-o-q) but by 5.1% adjusted for the EO item.
MaxFast and Stenhus: apparent opportunity for synergies MaxFast’s property value uplifts came in almost unchanged, at SEK 0.3m, or 0.01%, vs. our forecast of 0.75%. As a result of low value uplifts and a record low L12m cash yield (CE/EPRA NAV) of 4.5%, EPRA NAVPS improved to SEK 49m, up 1% q-o-q and 10% y-o-y.
Adjusted for the EO item, net financials still grew by 30%, to SEK -16m in Q1, and the company also raised net financials by 9.5% in its earnings capacity. We believe the low business activity supports our thesis (see Fast comment from 3 March) that MaxFast will accept the bid from Stenhus Fastigheter. MaxFast offers size and an attractive mix of high yields (5.6%) and high occupancy (93%).
Stenhus has average funding costs of 1.8% (MaxFast 3.4%) and an unlevered balance sheet with 15% net LTV (MaxFast 60%). The deadline for acceptance of the bid is the second week of June. ‘21e P/CE of 15x is 30% below sector average of 22x The share rose ~22% on Stenhus’ bid on 3 March (from SEK 36.4 to 44.4) and has thereafter fallen slightly but remained fairly stable.
It is trading 30% below the sector average on the ‘21e P/CE (15x vs. 22x). On the 21e P/EPRA NAVPS, the share is trading at 0.78x, 24% below sector average of 1.02x..