Empir Group - Goodwill amortisation ends challenging 2020
LOI to divest part of Apply Group Estimate revisions stem from divestment There will be more focus on Portify in 2021 Q4: Adj. EBIT of SEK -2. 1m (-0. 3m) vs.
ABGSCe at SEK -1m Empir Q4 net sales of SEK 48. 4m (-23% y-o-y) were in line with ABGSCe. The reported earnings were burdened by a goodwill amortization of SEK 20.
2m, as some subsidiaries suffered a problematic year during the pandemic. Adj. EBIT was SEK -2.
1m (-0. 3m) slightly below ABGSCe at SEK -1m. The deviation stems from the Apply segment.
Looking forward, Empir has signed a letter of intent to divest the IT/Telecom part of Apply to Infracom for a total fee of SEK 54m. The deal is expected to be finalized before 31 March. Frontwalker on the other hand sees a recovering market going into 2021 and management thinks it can start to grow organically again.
Empir currently owns 51% of that business. Frontwalker set to recover in 2021 We have included the divestment in our revised forecast, which explains the negative revisions on sales and EBIT. A challenge for Empir is that the operational units have less volume now, which means that the group’s overhead costs eat a proportionally high amount of the results generated.
We think there is the possibility to decrease the group costs somewhat, and we are forecasting costs to decline gradually to SEK 9m annually by 2023. The current CEO, Lars Save, has also declared that he will step down in order to retire. A recruitment process is under way, but Lars will be operational until a suitable replacement has been identified, or at the latest by 30 September.
A strong cash position following divestment Following the divestment of the IT/Telecom part of Apply, there will be even more focus on how Portify/Miljöbilscentralen will develop. They offer a fleet management system that is internally developed and has seen strong growth from customers within the public sector. We believe the business is close to being profitable.
We also note that Empir will have a s.
