Sakset fra DNB engelske analyser.

AXACTOR Bottom-line uptick in Q4 Axactor reported a bottom line of NOK4.4m in Q4, up from around zero in recent quarters. The result was boosted by revaluations of NPLs while REO collections were lower than we forecast, partly due to a market setback in October–November related to political issues in Spain. We have cut our 2019–2020e EPS by ~7% to account for the updated ERC curves with more REO collections being pushed further out in time. We find Axactor attractively valued at a 2020e P/E of 4.9x and we keep our BUY and NOK50 target price.
Solid NPL performance. Q4 saw strong collection growth on NPLs with EUR39.6m collected, close to a doubling from the EUR20.1m in Q4 2017 (EUR35m in Q3 2018). The collection performance was said to have been 5% better than set out in the business case, while the outperformance is broad-based with a tilt towards Nordic consumer finance portfolios. Axactor booked a positive revaluation of portfolios for NPLs of EUR3.2m, which was only partly offset by a EUR2.1m negative revaluation in the REOs segment.
NPV of cash flow from REOs reduced. The REO collection missed our Q4 estimate due to REO sales having been paused in October–November due to political uncertainty (resolved before the beginning of December, when the market picked up again). This related to the payment of stamp duty. Axactor said it would consider selling groups of properties in 2019 to speed up the cash flow generation from REOs, and that the underlying market, price levels and asset values remain largely intact.
2019–2020e EPS cut on updated collection curves. Axactor presented updated ERC curves, where in particular the collection on REOs is expected to come further out in time, implying lower collections in 2019–2020 than we previously assumed. This should also reduce total amortisation and collection costs somewhat. However, the net effect is a 7% reduction in our 2019–2020e EPS.
BUY and NOK50 target price reiterated. We find Axactor attractively valued at a 2020e EV/EBIT of ~9.5x, combined with our expectation of strong earnings growth and a healthy revenue mix with a relatively high share of Debt Collection earnings. We expect a significant bottom-line improvement through 2019e and 2020e, as the ERC of EUR1.6bn has nearly doubled over the past year, driving higher revenues, while costs have not increased correspondingly. We also expect significantly better quarterly results in 2019, as the platform established in recent years allows for higher margins from better utilisation, and economies of scale materialise due to high NPL investments.