North Media - Looking forward with new 2022/23 ambitions
Ending 2020 with solid growth and DPS of DKK 5/share New ambitions include DKK 200m investment option Changes of board and ownership structure Solid YE’20, guidance for ’21e in line with our estimates This evening, North Media announced Q4 revenue of DKK 274m (11% vs. ABGSC at DKK 247m), EBIT (bsi. ) of DKK 58m (-2% vs. ABGSC at DKK 59m) along with return on securities of DKK 56m (15% vs.
ABGSC at DKK 49m) and thus EBT of DKK 111m (9% vs. ABGSC at DKK 102m). Revenue and EBIT were thus at the high end of its 2020 guidance, as we expected.
The company has also provided guidance for 2021e, with revenue of DKK 985-1025m (ABGSCe DKK 1bn) and EBIT of DKK 230-255m (DKK 248m), thus in line with our estimates. Following a strong year, the management proposes DPS of DKK 5/share (ABGSCe DKK 4. 5).
Management also flags that the firm’s guidance is considered back-end loaded due to the ongoing COVID-19 pandemic. New 2022-23 ambitions with new investment programme In addition to the 2021 guidance, the company has provided ambitions for 2022-23e (see page 2). These include ~3% org.
growth, maintaining an EBIT margin of ~24% along with launching an investment/acquisitions programme of up to DKK 200m (in total), which will likely be targeted at digital service options. If these targets are achieved, the company will aim to pay a dividend of DKK 5/share a year. FK distribution targets flat growth development (stable volume decreases with ongoing price adjustments) and an EBIT margin stable at ~24% with potential for international expansion.
The digital service businesses aim for ~20% sales growth with the EBIT margin growing to 25% by 2023 (excl. M&A). We estimate -1 to 2% sales growth for 2022/23 with an EBIT margin of ~25%.
As a result, we believe the new targets are aligned with our estimates. Investor conference call tomorrow at 09:00 CET with ABGSC The board of directors recommends lawyer Ole Borch, to replace Mads Dahl Andersen as Chairman, who will remain as board.
