Sievi Capital Plc
Stock exchange release 29 April 2021 at 8:00 am EEST
Sievi Capital Plc’s Business Review January–March 2021
Return on equity at a very strong level
This is the summary of the Business Review for January–March 2021.The full Business Review is attached to this release and is also available on the company’s website at www.sievicapital.fi.
Operating profit was EUR 3.7 (-4.6) million
Net profit for the period was EUR 3.5 (-3.7) million
Earnings per share (undiluted and diluted) were EUR 0.06 (-0.06)
Net asset value per share at the end of the review period was EUR 1.39 (1.14)
Return on equity for rolling 12 months was 23.2% (10.7%)
Gearing at the end of the review period was -13.2% (-22.7%)
Figures in parentheses are figures from the corresponding period in the previous year, unless indicated otherwise. Information in the Business Review is unaudited. Sievi Capital does not consolidate the data of its subsidiaries into Group-level calculations line item by line item but recognises investments in the companies at fair value through profit or loss.
CEO Päivi Marttila:
”The year 2021 started in our target companies under varying circumstances. The coronavirus pandemic made it difficult for our target companies to do business early in the year, which had an impact on the development of the companies in the first quarter. In spite of this, two of the four companies' EBITDA for January–March improved from the previous year. All target companies made good progress in implementing their business plans and the companies' short-term outlooks currently seem positive.
Sievi Capital's result for the first quarter was strong. As a result of several favourable quarters, Sievi Capital’s return on equity for rolling 12 months was very strong, 23.2%, at the end of the review period. This is well above our long-term minimum target level. The good return on equity is the result of successful investment decisions and the strong performance of our target companies over the past 12 months in the exceptional market environment.
In the M&A market, activity is currently at a high level. Several companies are seeking change in their ownership structures and partners for the next development phase. There is also a large number of players on the market looking for investments, and the competition for good investments is fierce. Sievi Capital's promise of partnership for potential target companies is strong, and we have a solid track record of successful development of our target companies. We are convinced that thanks to this and our active deal flow work, we will be able to invest in 1–2 new target companies annually in accordance with our goals despite the fierce competition.”
Sievi Capital will continue to explore new investment opportunities in line with its strategy. The company plans to make an average of 1–2 new investments per year but the number of investments made may vary from year to year. For existing investments, the active development of the companies’ business operations will continue. Exit planning and the assessment of exit opportunities will also continue.
Sievi Capital does not consolidate the data of its subsidiaries into Group-level calculations line item by line item but recognises investments in the companies at fair value through profit or loss. Changes in the fair values of the investments have a material impact on Sievi Capital’s results. In addition to the target companies’ own development, factors that influence the development of the fair values of the investments include, for instance, the general development of different sectors and national economies as well as changes in their outlooks, the development of stock market and interest rates and other factors beyond Sievi Capital’s control. Furthermore, the coronavirus pandemic increases uncertainty when it comes to anticipating development.
Sievi Capital’s financial target is a return on equity of at least 13%, the achievement of which the company considers to be realistic in the long term. Due to the nature of the business, the company’s short-term result development is subject to volatility that is difficult to predict. Therefore, Sievi Capital does not provide an estimate of the result development in 2021.
SIEVI CAPITAL PLC
CEO Päivi Marttila, tel. +358 400 285 358
Nasdaq Helsinki Ltd
Sievi Capital is a listed (Nasdaq Helsinki) private equity investment company that invests in small and medium-sized Finnish companies. Sievi Capital acts in close partnership with management and co-owners in target companies and actively supports growth, performance and value creation.