Blue Cap AG (DE:B7EG) is gearing up for further expansion by joining forces with like-minded counterpart, PartnerFonds, its new major shareholder (44%) and planned merger partner. Meanwhile it continues to please, both in terms of trading and its eye for transformative investment. H217 delivered strong momentum, notably at reinvigorated Neschen, with EBITDA up by a quarter (likely doubling y-o-y, as in H1, but for sale of Biolink). For 2018, guidance of progress across the board is complemented by the largest purchase to date (Knauer-Uniplast) and associated turnaround potential. Dividend initiation despite continued investment marks Blue Cap’s success.
H217 shows bumper first half was no fluke
Although H1 seemed a hard act to follow, the half to December broadly matched its doubling of EBITDA, after adjusting for the absence of Biolink profit (our estimate €2m). €11.2m for the full year comfortably beat the post-H1 consensus forecast of €9m, which had appeared cautious. Turnaround at newly included Neschen was again the driver but existing operations were enhanced in Adhesives, Medical Technology and Precious Metals Recycling. While post-H1 guidance did not quantify expected sales growth, it is creditable that H2 divisional trends were as management had indicated and consensus for FY17e of €140m was exceeded. Biolink’s sale for c €39m drove sharply lower net debt (€11m vs €40m in 2016).
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