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SRV Group Plc has set new long-term financial objectives

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SRV GROUP PLCSTOCK EXCHANGE RELEASE     2 February 2023     8:10 EET

SRV Group Plc has set new long-term financial objectives

SRV Group Plc has set new long-term financial objectives that it seeks to achieve by the end of 2026. The company announces that it is continuing to implement its lifecycle-wise strategy as well as grow its revenue and improve the value of its project portfolio by stepping up the share of its production accounted for by developer-contracted and development projects.

Long-term financial objectives

The company’s operations are guided by the following long-term financial objectives that it aims to achieve by the end of 2026:

  • Operative operating profit: 6%
  • Revenue: EUR 900 million
  • The objective is to distribute a dividend equalling 30-50 per cent of the annual result, while taking into account the outlook and capital needs of the company

The objective for operative operating profit remains unchanged. A revenue objective has been set alongside it to reflect the target for growth. The objective for gearing was removed from the long-term financial objectives because, after the extensive financing arrangement carried out in the second quarter of 2022, gearing has been significantly below the earlier target level. The company  did not revise its dividends policy.

SRV’s President & CEO Saku Sipola says that the company believes that operative operating profit will reach the objective of six per cent by the end of 2026.

“In order to achieve this objective, we must put our revenue back on a growth track and increase the share of our project portfolio accounted for by developer-contracted housing projects, housing and business development projects and lifecycle projects. We already sought to achieve this turnaround in 2022. As our project development portfolio is in good shape, we would have had the potential to make this happen, but the significantly weakened demand among consumers and investors has delayed it,” says Sipola.

“In this market situation, the fact that our portfolio focuses on project management and alliance projects in business construction – which generate stable earnings – will carry us with relatively few risks over 2023, which we expect to be the most difficult year. We believe that as from 2024, we will once again be able to dedicate ourselves fully to overhauling our portfolio and pursuing growth.”

Sipola states that achieving the operating profit objective will call for particularly strong project development that generates value in cooperation with cities and customers.

“We have a strong project development portfolio for the years ahead and are working to grow it further,” says Sipola.

Towards a lifecycle-wise future

At the same time as the company has set itself new long-term financial objectives, it has also finetuned the objectives of its lifecycle-wise strategy and contents of its strategy programmes.

SRV’s strategic objectives are:

  • Mitigating climate change
  • Well-being of residents and users of premises
  • Sustainable income from real estate properties over their entire lifecycle
  • Excellent customer experience
  • Ensuring SRV’s long-term competitive advantage and profitable growth

“We seek to listen to our customers and other stakeholders to carry out lifecycle-wise construction, so that sustainable construction will create security for years and generations to come,” says Sipola.

The strategic spearhead programme Value Through Lifecycle-Wise Construction guides the company’s strategic development. In addition, the strategy still includes three strategic programmes:

  • Streamlining operations throughout the construction chain (previously also: Streamlining operations throughout the construction chain)
  • Best customer experience in the commercial premises market (previously: Leading market position in the commercial premises market)
  • Increasing profitability in housing construction (previously: Housing construction at the forefront of profitability)

SRV’s strategy is described at: https://www.srv.fi/en/srv-company/srv-as-a-company/strategy

More information on the company’s strategy will be provided at the briefing on the 2022 financial results, which will be held on 2 February 2023 as a webcast starting at 11:00 a.m. The webcast can be followed live at www.srv.fi/en/investors.

For further information, please contact:
Saku Sipola, President & CEO, tel. +358 (0)40 551 5953, saku.sipola@srv.fi
Jarkko Rantala, CFO, tel. +358 (0)40 674 1949, jarkko.rantala@srv.fi
Miia Eloranta, Senior Vice President, Communications and Marketing, tel. +358 (0)50 441 4221, miia.eloranta@srv.fi

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SRV in brief

SRV is a Finnish developer and innovator in the construction industry. We are building a more sustainable and responsible urban environment that fosters economic value and takes into consideration the wellbeing of both the environment and people. We call this approach lifecycle wisdom. Our genuine engagement and enthusiasm for our work comes across in every encounter – and listening is one of our most important ways of working. We believe that the only way to change the world is through discussion.

Our company, established in 1987, is listed on the Helsinki Stock Exchange. We operate in growth centres in Finland. In 2021, our revenue totalled EUR 932.6 million. In addition to about 1,000 SRV employees, we have a network of around 3,600 partners.

SRV – Building for life

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