^
Original-Research: Cenit AG - from GBC AG
Classification of GBC AG to Cenit AG
Company Name: Cenit AG
ISIN: DE0005407100
Reason for the research: Research Comment
Recommendation: BUY
Target price: 20.55 EUR
Target price on sight of: 31.12.2024
Last rating change:
Analyst: Cosmin Filker, Marcel Goldmann
Q1 2024: Strong start to the current financial year; forecast confirmed;
price target and rating confirmed
CENIT AG has made a good start to the current fiscal year. With sales of EUR
50.55 million (previous year: EUR 43.42 million), the previous year's figure
was significantly exceeded by 16.4%. Even though inorganic effects
contributed to this increase, we assume that a significant part of the
sales growth is also of organic origin. The companies acquired in the past
financial year 2023 (mip, PI, ABC and CCE) were not yet or only partially
included in the first quarter of the previous year. According to our
calculations, the inorganic effect should amount to around EUR 4.0 million.
Adjusted, CENIT AG thus achieved organic sales growth of EUR 3.13 million or
7.2%. For the second time in a row, a new sales record was achieved on the
basis of the first quarter.
Based on the significant increase in sales, CENIT AG also reported a
significant improvement in EBIT to EUR 0.69 million (previous year: EUR 0.01
million), which corresponds to an EBIT margin of 2.4% (previous year:
0.0%). CENIT AG generated earnings after taxes of EUR 0.03 million (previous
year: EUR -0.07 million) despite a significant increase in financial
expenses.
Particularly noteworthy is the strong increase in operating cash flow to EUR
12.54 million (previous year: EUR 8.69 million), which contributed to an
increase in total cash flow to EUR 9.32 million (previous year: EUR 4.72
million). In addition to the increase in operating earnings, the operating
cash flow benefited from a significant decrease in working capital,
primarily due to a sharp rise in contract liabilities. This includes
payments received for services still to be rendered in the course of the
financial year. Cash flow should therefore 'normalise' again over the
course of the year.
As expected, CENIT's management has confirmed its guidance with the
publication of the Q1 figures. Sales of EUR 195 to EUR 202 million and EBIT of
EUR 11.7 to EUR 12.2 million are still expected. In terms of sales, the first
quarter is fully in line with the guidance with sales of EUR 50.55 million.
However, the generally higher contribution to sales in the second half of
the year must be taken into account here, meaning that the confirmed
guidance can be categorised as conservative. The distribution of earnings
also follows the seasonal distribution of sales, meaning that EBIT is
expected to rise in the following quarters, particularly towards the end of
the year. In this respect, Q1 EBIT is still of little significance for the
development of the year as a whole.
In view of the fact that Q1 was in line with expectations and the confirmed
guidance, we are sticking to our forecasts. As before, our estimates do not
include any inorganic effects, which nevertheless remain an integral part
of our corporate planning. In order to achieve the 'CENIT 2025' plan, we
anticipate two to three acquisitions per year, which should contribute
around EUR 40 to EUR 50 million to sales. By the beginning of 2025, the annual
sales level should thus be increased to between EUR 240 million and EUR 250
million. The company has cash and cash equivalents totalling EUR 33.62
million and therefore sufficient financial scope to implement its inorganic
growth strategy.
In light of our unchanged forecasts and the unchanged valuation model, we
are leaving our price target unchanged at EUR 20.55. The rating remains BUY.
You can download the research here:
http://www.more-ir.de/d/29751.pdf
Contact for questions
++++++++++++++++
Disclosure of potential conflicts of interest pursuant to Section 85 WpHG and Art. 20 MAR The company analysed above has the following potential conflict of interest: (5a,6a,7,11); A catalogue of potential conflicts of interest can be found at:
https://www.gbc-ag.de/de/Offenlegung.htm
+++++++++++++++
Date and time of completion of the study: 15/05/24 (12:24 pm)
Date and time of the first dissemination of the study: 15/05/24 (2:00 pm)
-------------------transmitted by EQS Group AG.-------------------
The issuer is solely responsible for the content of this research.
The result of this research does not constitute investment advice
or an invitation to conclude certain stock exchange transactions.
°
