Panostaja Oyj Business Review Q1 March 14, 2024 at 10.00 a.m.
Panostaja Oyj's Business Review November 1, 2023-January 31, 2024
Measures to improve profitability continue
November 2023-January 2024 (3 months) in brief:
- Net sales increased in one of our four segments. Net sales for the Group as a whole dropped by 6.1% to MEUR 33.3 (MEUR 35.5).
- EBIT improved in one of the four segments. The entire Group's EBIT declined from the reference period, standing at MEUR -0.4 (MEUR 0.1).
- Grano's net sales for the review period dropped by 8% from the reference period. EBIT totaled MEUR 0.2 (MEUR 0.8).
- Earnings per share (undiluted) were -1.6 cents (-1.5 cents).
CEO Tapio Tommila:
"In the first quarter of the financial period, the market environment remained challenging and customer caution with regard to procurement decisions continued to be high. The general economic slump was evident particularly in the relatively poor demand of our largest segment Grano before the turn of the year and the slow realization of profits from Oscar Software's deals in terms of customer acquisition. Grano's net sales for the review period dropped by 6.1%.
In the first quarter, we continued the measures to improve profitability. Grano began change negotiations in January to improve the company's profitability and strengthen its competitiveness in the long term. The planned structural and organizational changes as well as other streamlining measures are expected to yield annual cost savings of about MEUR 4.5. At Hygga, the improvement of the clinic business continued thanks to measures to boost productivity, even though the market situation for private business remained fairly poor. At CoreHW, we were able to bring challenging design projects to the final phases, which frees up specialists for other design projects. At Oscar Software, the delays in the investment decisions of customers was evident in the poor development of expert sales, which dragged down the profitability of the review period. That said, the growth of the ARR software business continued. Overall, the EBIT for the review period declined from the reference period, standing at MEUR -0.4 (MEUR 0.1).
The phase in the corporate acquisition market is slow, and the number of available targets and closed deals is significantly lower than normal. We are actively focusing on generating our own project flow and focusing on exploring new corporate acquisition opportunities in our target sectors, in accordance with our goals."
Financial Development November 1, 2023-January 31, 2024
| Key Figures MEUR | Q1 | Q1 | 12 months |
| 11/23- 1/24 | 11/22- 1/23 | 11/22- 10/23 | |
| Net sales, MEUR | 33.3 | 35.5 | 136.2 |
| EBIT, MEUR | -0.4 | 0.1 | -1.1 |
| Profit before taxes, MEUR | -1.1 | -0.5 | -4.3 |
| Profit/loss for the financial period, MEUR | -1.1 | -0.7 | -3.6 |
| Distribution: | |||
| Shareholders of the parent company | -0.9 | -0.8 | -2.9 |
| Minority shareholders | -0.2 | 0.1 | -0.8 |
| Earnings per share, undiluted, EUR | -0.02 | -0.01 | -0.05 |
| Interest-bearing net liabilities | 38,9 | 40.1 | 42.4 |
| Gearing ratio, % | 75.3 | 69.8 | 80.5 |
| Equity ratio, % | 36.9 | 39.8 | 37.5 |
| Equity per share, EUR | 0.60 | 0.71 | 0.62 |
| Distribution of net sales by segment MEUR | Q1 | Q1 | 12 months |
Net sales | 11/23- 1/24 | 11/22- 1/23 | 11/22- 10/23 |
| Grano | 26.3 | 28.5 | 109.1 |
| Hygga | 2.0 | 1.7 | 7.8 |
| CoreHW | 2.0 | 2.2 | 7.9 |
| Oscar Software | 2.9 | 3.1 | 11.5 |
| Others | 0.0 | 0.0 | 0.0 |
| Eliminations | 0.0 | 0.0 | -0.1 |
| Group in total | 33.3 | 35.5 | 136.2 |
| Distribution of EBIT by segment MEUR | Q1 | Q1 | 12 months |
EBIT | 11/23- 1/24 | 11/22- 1/23 | 11/22- 10/23 |
| Grano | 0.2 | 0.8 | 1.9 |
| Hygga | 0.1 | -0.2 | -0.1 |
| CoreHW | -0.2 | -0.1 | -1.2 |
| Oscar Software | 0.1 | 0.2 | 0.4 |
| Others | -0.6 | -0.6 | -2.2 |
| Group in total | -0.4 | 0.1 | -1.1 |
Panostaja Group's business operations for the current review period are reported in five segments: Grano, Hygga, CoreHW, Oscar Software and Others (parent company and associated companies).
One associated company, Gugguu Group Oy, provided a report for the review period. The impact on profit/loss of the reported associated companies in the review period was MEUR -0.0 (MEUR -0.0), which is presented in a separate row in the consolidated income statement.The development of Gugguu's net sales and EBIT has been commented on more specifically in the Segments section.
Outlook for the 2024 Financial Period
As regards the corporate acquisition market, new opportunities are available and the market is active.SMEs will still need to utilize ownership arrangements and growth opportunities, but the consistently high market liquidity and the high price expectations of sellers, which tend to follow changes in economic trends with some delay, make the operating environment challenging for corporate acquisitions.We will continue exploring new possible investment targets in accordance with our strategy and assess divestment possibilities as part of the ownership strategies of the investment targets.
It is thought that the demand situation for different investments will develop in the short term as follows:
- The demand for Grano, Oscar Software, CoreHW and Hygga will remain satisfactory.
The demand situation presented above involves uncertainties relating to any geopolitical and macroeconomic impacts that are difficult to anticipate. In addition to this, uncertainties related to the prevalent labor market situation have increased. The effects of the war in Ukraine and the related economic sanctions and geopolitical tensions will increase economic uncertainty in Finland and abroad, which may negatively impact segment demand or the availability of materials, and thereby material prices and delivery capabilities. If strengthened and prolonged, the inflation may have a negative impact on the purchasing power of consumers and the willingness of companies to make investments, which may weaken the demand situation of our segments from the estimate provided above.
Panostaja Oyj
Board of Directors
For further information, contact CEO Tapio Tommila, +358 (0)40 527 6311
Panostaja Oyj
Tapio Tommila
CEO
All forecasts and assessments presented in this business report are based on the current outlook of Panostaja and the views of the management of the various investments with regard to the state of the economy and its development. The results attained may be substantially different.
This is not an interim report compliant with the IAS 34 standard. The company observes the six-monthly reporting practice prescribed in the Finnish Securities Markets Act and publishes business reports for the initial three and nine months of each year, presenting the key information on the company's financial development. The financial information presented in the business report has not been audited.
Panostaja is an investment company developing Finnish companies in the growing service and software sectors as an active shareholder. The company aims to be the most sought-after partner for business owners selling their companies as well as for the best managers and investors. Together with its partners, Panostaja increases the Group's shareholder value and creates Finnish success stories.
Panostaja has a majority holding in four investment targets. Grano Oy is the most versatile expert of content services in Finland. Hygga Oy is a company providing health care services and the ERP system for health care providers. CoreHW provides high added value RF IC design services. Oscar Software provides ERP systems and financial management services.
