May News Compilation
Toya - B&M - ESAUTOMOTION
Toya SA: An Exceptional First Quarter
Revenue: The company reported revenue growth of 18.5%, reaching PLN 231.9 million.
Margins: After experiencing pressure beginning in 2022, margins have normalized, settling at nearly their historical average. The reported margins were a gross margin of 33.44%, EBITDA of 15.7%, and EBIT of 13.5%.
Net profit: Net profit reached PLN 24.57 million, marking a 51.7% increase compared to Q1 2024. This substantial growth is directly attributable to margin normalization.
The company's balance sheet is strong with net cash in the amount of PLN 6,2 M.
Cash flow generation was PLN 0.46 million , positive but weak due to working capital.
Capital Allocation: Currently, there are no announcements regarding the return of dividends. Furthermore, despite having an authorized share repurchase program, the company has not yet executed it.
Conclusion
I was pleasantly surprised by the results. In the analysis posted in April (https://10baggernewsletter.substack.com/p/toya-sa) , we anticipated that an increase in inventories could be a clue that they expected a year of strong growth and that the margins would eventually normalize. Both occurred in the last quarter, but growth has been much higher than expected.
If we extrapolate this growth and these margins to the full year, the company is trading at a P/E ratio of just 5.6. This price seems ridiculous to me, considering the company has the potential to maintain double-digit growth and consistently generate ROICs above 15%. A return to dividend payments or execution of the share repurchase program could significantly re-rate the stock.
B&M European Value Retail S.A - New CEO and preliminary results
The search for a new CEO has ended with the appointment of Tjeerd Jegen. Tjeerd brings international retail experience, having held leadership roles at Ahold Delhaize, Metro, Tesco, Woolworths, HEMA and Takko Fashion for over 25 years.
The company also reported a 3.7% increase in sales thanks to the opening of new stores and a good performance in France with LFL sales up 2.6%. On the negative side, LFL sales in the UK declined by 3.1% reflecting the weakness in UK retailing.
Subject to approval by shareholders at the AGM on 22 July 2025 a final dividend of 9.7p per ordinary share has been proposed, bringing the full year dividend to 15.0p
per share (2024: 14.7p) in addition to the 15.0p special dividend paid in February 2025 , offering a dividend yield in excess of 10% at current prices.
In next month's news update the company will have already published its annual report and we will review the results.
Esautomotion: Q1 2025 Financial Update. Has the bottom been reached?
Revenue: The company generated €7.2 million in revenue during the first quarter, which is a 9% decline from Q1 of 2024. While the decline in revenue is negative news, there are signs that we've reached the bottom when we compare the results with those from the previous year.
Strong Balance Sheet: Esautomotion maintains a healthy balance sheet, with a net cash position of €4.3 million.
The company is optimistic about 2025. They state that they did not lose any customers in 2024 and acquired new ones who will generate revenue in 2025 :
“Entry of numerous new customers in 2024, for which it is physiological to expect a full order intake after approximately one year, considering the technical times related to implementation, technological tests, commercial validations and subsequent definitive adoption in the production lines.”