(News Bulletin 247) – The leisure vehicle specialist published a turnover slightly lower than expectations. But its current operating profit forecast for the financial year which has just ended is very good.

Trigano is one of those stocks whose publications are almost systematically followed by strong variations on the stock market, both upwards and downwards. Particularly in recent years during which the group has both benefited from strong demand for motorhomes, a real “health bubble” for traveling during the pandemic, and penalized by supply problems, particularly for chassis.

The publication delivered Thursday evening is no exception to the rule. Thus the Trigano share gained 9.9% around 11:10 a.m. this Friday, marking the second strongest increase in the SBF 120 index, behind Orpea which has become a hyper volatile stock.

The group, which closes its financial year at the end of August, has published its fourth quarter turnover. Over the period from June 1 to August 31, the leisure vehicle specialist generated revenues of 836.1 million euros, an increase of 13.2% in published data and 12.5% ​​on a perimeter and constant exchange rates.

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Good surprise on profitability

The leisure vehicle segment alone saw turnover increase by 14% on a like-for-like basis. “The confirmation of the improvement in receipts of rolling bases has enabled an increase in the production of motorhomes of just over 15% in volume. The level of sales shows an increase of 19.7%,” explains the company. Company

Leisure facilities, which should soon be strengthened by the acquisition of Beneteau’s mobile home division, on the other hand saw their revenues fall by 8.4% on a comparable basis. But this division only represents 5.5% of total turnover….

Invest Securites notes, however, that revenues are slightly below expectations, the consensus cited by the research office being at 876 million euros. Over the entire 2022-2023 financial year, Trigano’s turnover increased by 6.5% to 3.48 billion euros.

But the good surprise of the publication comes from the result forecast. For the completed 2022-2023 financial year, the company anticipates a current operating profit of more than 400 million euros, thanks to “growth in turnover associated with control of margins and overheads”.

TP ICAP Midcap calculates that this indication translates into a corresponding margin of approximately 11.5%, an increase of twenty basis points (0.20%) over one year, “beyond consensus expectations”.

“The Ebit margin generated in the second half of the year seems excellent (more than 12%), which is above our expectations (and this time at the top of consensus,” underlines Portzamparc.

“Despite still some disruptions, particularly in Italy, productivity is today much better with normalized chassis delivery rates,” notes the design office which considers the annual landing on margins “reassuring”. He also believes that cash generation should be “excellent”.

The company’s full results will be released on November 28.

An attractive valuation

Concerning its outlook for the next financial year, the company explains that “the first autumn shows confirmed with high attendance levels the keen interest of European consumers in leisure vehicles”. “While the increase in product prices and interest rates does not seem to affect the motorhome market, demand for caravans is however less sustained at the start of the season,” adds the company.

Trigano continues by affirming that it is “confident” in “its ability to increase its turnover for the 2023/24 financial year”. “The high level of order books for motorhomes gives it good visibility on its activity which should benefit from a further improvement in deliveries of rolling bases, the ramp-up of its production tools and the reconstitution of stocks distribution networks”, develops the company.

“Attentive to developments in its markets, Trigano will adapt, if necessary, its production capacity as well as the level of its costs to changes in demand,” she also warns.

Trion Reid, analyst at Berenberg, anticipates organic growth (on a comparable basis) of 7% for the financial year ending at the end of August 2024 and 3% for the following.

“Based on these estimates, the stock trades at attractive multiples of 7 times P/E (the earnings multiple implied by the stock price) and 4 times EV/Ebitda (the value “(Editor’s note) for the year 2024, with free cash flow and dividend yields of 9% and 3.4% respectively”, underlines the analyst. “We also note the strength of the balance sheet – we estimate that the group ended the fiscal year with more than €200 million in net liquidity – which allows for accretive M&A opportunities,” he adds.

“If Trigano’s 2024 growth ambitions are confirmed, the valuation is indeed very attractive,” adds TP ICAP Midcap, which calculates that the stock is trading at a 30% discount compared to its historical multiples.