1923 Investments plc - Updated Financial Analysis Summary

June 27, 2022

On 27 June 2022, 1923 Investments plc published an updated Financial Analysis Summary. The following are the main highlights of the company’s expected financial performance and position in 2022:

Revenues are expected to surge by 26% (or +€44.8 million) to €216.9 million reflecting considerable growth across all business lines. Revenues from iSpot (which is the largest Apple Premium Reseller in Poland) are anticipated to increase by 23.4% (or +€29.4 million) to €154.8 million reflecting robust underlying growth which is also supported by the opening of two new stores. Moreover, revenues generated by Hili Logistics (+20.2%) and Harvest Technology (+46.6%) are also expected to increase sharply on the back of stronger demand supplemented by new contracts. Meanwhile, the forecasted revenue figure of €216.9 million also includes the initial contribution amounting to €1.84 million from the company’s agreement with iRiparo Srl which is a leading European chain engaged in the repair and sale of used electronics.
Despite the notable increase in revenues, EBITDA is expected to ease by 3.8% to €15.8 million as the reduction in profit margins of Harvest Technology coupled with the projected loss of iRiparo are anticipated to outweigh the higher EBITDA contribution of iSpot (+2.7% to €10.2 million) and Hili Logistics (+9% to €4.39 million).
After accounting for depreciation and amortisation charges of €6.48 million, share of profits in associates/joint ventures of €0.65 million, net finance costs of €3.65 million, and a tax charge of €1.92 million, 1923 Investments is forecasting a net profit of €4.36 million compared to €5.84 million reported in 2021.
In terms of financial position, total assets are projected to remain at just under €150 million whilst total liabilities are expected to drop by 4.3% to €92.7 million. In view of the much stronger expansion in the company’s equity base than the increase in borrowings, the gearing ratio is expected to ease to 51.8% from 53% as at the end of 2021. On the other hand, given the projected drop in EBITDA, the net debt-to-EBITDA multiple and the interest cover are anticipated to deteriorate slightly to 3.28 times (2021: 3.05 times) and 4.33 times (2021: 4.68 times) respectively.