Lehto Group Plc's half year financial report January-June 2016
Lehto Group Plc's half year financial report January-June 2016
Lehto Group Plc Stock Exchange release 18 August 2016, 8:00 a.m. EET
Net sales increased by 44.6%, operating profit came to 9.9% of net sales
Summary
| GROUP | 4-6/2016 | 4-6/2015 | 1-6/2016 | 1-6/2015 | 1-12/2015 |
| Net sales, EUR million | 78.3 | 46.7 | 140.5 | 97.2 | 275.6 |
| Change in net sales, % | 67.5% | 45.7% | 44.6% | 33.1% | 61.1% |
| Operating profit, EUR million | 10.0 | 1.8 | 14.0 | 6.1 | 27.2 |
| Operating profit, % of net sales | 12.7% | 3.9% | 9.9% | 6.3% | 9.9% |
| Profit for the period, EUR million | 8.0 | 1.2 | 11.0 | 4.2 | 21.2 |
| Order backlog at period end, EUR million | 237.2 | 184.1 | 237.2 | 184.1 | 195.0 |
| Earnings per share, EUR | 0.16 | 0.02 | 0.22 | 0.09 | 0.52 |
| Cash and other liquid assets, EUR million | 74.1 | 9.5 | 74.1 | 9.5 | 24.6 |
| Interest-bearing liabilities, EUR million | 18.9 | 19.4 | 18.9 | 19.4 | 17.0 |
| Equity ratio, % | 63.1% | 21.9% | 63.1% | 21.9% | 37.2% |
| Net gearing ratio, % | -58.4% | 64.1% | -58.4% | 64.1% | -22.9% |
Group net sales during the first half-year grew by 44.6%, compared to the previous year's corresponding period, to EUR 140.5 (97.2) million. The Group's profitability remained at a good level and operating profit was EUR 14.0 (6.1) million, i.e. 9.9% (6.3%) of net sales. Net sales grew in all service areas. The strongest growth was experienced in the Housing service area, where net sales more than doubled compared to those of the corresponding period in the previous year. In the review period, the number of completed construction sites included 9 housing premises, 10 business premises and 14 social care and educational premises. The Group's cash and other liquid assets grew to EUR 74.1 million, mainly due to the successful listing.
After the beginning of the year, the order backlog increased to EUR 237.2 million at the end of the review period (EUR 195.0 million on 31 December 2015). Growth in the order backlog was generated by new business premises orders in particular, as well as by new orders received in the Social care and educational premises service area.
| Net sales by service area, EUR million | 1-6/2016 | 1-6/2015 | Change | 1-12/2015 | |
| Business premises | 49.0 | 45.4 | 7.9% | 109.8 | |
| Housing | 53.2 | 25.3 | 110.0% | 69.5 | |
| Social care and educational premises | 24.4 | 16.2 | 50.2% | 38.4 | |
| Building renovation | 14.0 | 10.2 | 36.5% | 58.0 | |
| Total | 140.5 | 97.2 | 44.6% | 275.6 |
Lehto's CEO Hannu Lehto:
"A major effort in the first half-year involved the company's listing on the stock exchange. Upon the listing, we gained around 4,600 new shareholders and trading in the shares on the prelist of the Helsinki Stock Exchange commenced on 28 April 2016. The listing was a heavy but rewarding project that helped us to clarify our strategy and sharpen our competitiveness. I want to use this opportunity to thank all of you who invested in our company, as well as all those who participated in our listing project. The funds received at the IPO will enable continuous development of our operations and secure capital demanded for growth.
Our business developed positively in the first half of 2016. Our net sales grew by 44.6% and all service areas were growing. The operating profit was at the expected level, i.e. 9.9% of net sales. During the review period, the number of completed projects included 9 residential buildings, 10 business premises projects, 14 social care and educational premises projects, and several building renovation projects.
We continued the development of modular solutions and concepts, and our new building component factory, which is being built in Oulainen, reached its roof height. Production in the new factory will be started during the third quarter of the year and will provide increased capacity, particularly in our housing service area. In addition, we believe that factorymade modules and components improve the quality of building, reduce costs and speed up the construction site phase during building.
Our business is growing and expanding. In circumstances like this, supply of skilled labour becomes more important and we must therefore aim at making Lehto ever more attractive as a working place for building professionals."
Outlook for 2016
For the strategy period 2016-2020, Lehto's target for average annual growth in net sales is around 10-15%.
It is estimated that growth in net sales in 2016 will be at least in accordance with the average growth target and operating profit will be around 8-10% of net sales. In the second half-year 2016, net sales and operating profit, in euros, are expected to be higher than in the first half-year.
Key factors affecting net sales and operating profit are the recognition based on delivery of developer contracting housing production, the number of apartments sold, as well as starts and sales of social care and educational premises and other business premises projects.
Invitation to press conference
Lehto will arrange a press conference on its first half-year review 2016 for the press, analysts and institutional investors on Thursday 18 August 2016 at 10 am in the company office in Vantaa, address Äyritie 12 B. The press conference can be viewed via a direct webcast at lehto.fi/en/investors. The direct webcast will start at 10 am Finnish time.
You can also participate through a telephone conference, which will begin at 10 am on 18 August. To participate, please call five minutes before the conference begins, using one of the following numbers.
- 09 2319 5437 (from Finland)
- +46 (0) 8 50520424 (from Sweden)
- +44 (0) 20 3003 2666 (from the UK, Standard International Access)
- Participation password: Lehto
For more information:
Veli-Pekka Paloranta, CFO
+358 400 944 074
Lehto Group in brief
Lehto Group is a Finnish construction and real estate group focusing on economically driven construction. The company's mission is to be an innovative reformer of the construction industry. The company has divided its operations into four service areas: Business Premises, Housing, Social Care and Educational Premises and Building Renovation. Lehto Group currently operates in Finland and is geographically concentrated in growth centres which form a significant part of the construction volume. The company's headquarters are located in Kempele. The company's net sales in financial year 2015 was approx. EUR 276 million and the company employed 423 people at the end of the financial year 2015.
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