Trucking services group Eurowag shifts gear after acquisition drive

PRAGUE (Reuters) -Czech group WAG Payment Solutions (Eurowag) has shifted its focus from acquisitions to integrating them and tackling the fragmented nature of European trucking services, the company's founder and chief executive said.

The London-listed company's shares debuted in 2021 and have climbed 12% in the last year to trade at 98.6 pence, but CEO Martin Vohanka said there were still no plans to pay a dividend.

Vohanka, who started the group commonly known as Eurowag in 1995, said last year marked the end of an acquisition phase, which has been combined with investments in in-house technology.

It secured the 306 million euro ($336.32 million) purchase of Polish group Inelo, a provider of working time management services, and also bought Webeye, a Hungarian fleet management provider.

"Now we are fully focused on the integration of everything," Vohanka told Reuters.

Eurowag's platform brings services such as fuel and toll payments, fleet management, routing services and tax refunds under a single system.

So far Eurowag services more than 200,000 trucks, he said, leaving room for growth given that some 6 million trucks operate in the European Union.

The company says 90% of operators are small- and medium-sized, and make only limited use of technology.

As it retreats from acquisitions, Eurowag plans to use cash generation to cut debt after its leverage ratio passed the top-end target of 2.5 times adjusted earnings before interest, tax, depreciation and amortisation (EBITDA).

That means there are still no plans to pay a dividend.

"We were clear from the beginning that we are a growth company," Vohanka said.

Revenue has more than doubled since 2018, with growth continuing even after the Ukraine war and the COVID-19 pandemic have weighed on economies and added to inflation.

Eurowag reported a nearly 25% rise in net energy and services sales - its main revenue gauge that strips out energy costs - to 190.9 million euros ($210.09 million) in 2022. It forecasts a continued rise in the high teens or low twenties in the medium term.

Eurowag has sizable operations in 15 European markets, with major trucking market Poland and other states in central Europe providing almost half of revenues.

($1 = 0.9098 euros)

(Reporting by Jason Hovet; editing by Barbara Lewis)