(News Bulletin 247) – The house builder announced half-year results in line with expectations in a still complicated market environment. Relieved of its main source of losses, Hexaom confirms its outlook for the current year, which includes an improvement in its profitability.

For the moment, Hexaom is ignoring the difficulties of the single-family home market. The former Maisons France Confort jumped 12% to 14.55 euros after half-yearly accounts which showed no signs of deterioration. The company also confirms its objectives for 2023. Which is an achievement in a real estate market in crisis.

Hexaom achieved good operational performance in a context marked by high inflation and pressure on construction costs. The Alençon company thus published an operating profit up 4.3% to 21.6 million euros over the half-year, for a turnover already published of 552 million euros, up 10.3%. .

The corresponding margin thus stands at 3.9% to be almost stable on a comparable basis compared to last year (4.1%). This margin level is therefore “in line” with TP ICAP Midcap’s expectations.

“Satisfactory” margins

In detail, margins in the construction of individual houses (CMI), which is Hexaom’s core business – are holding up at 3.4%. “Given the context, this margin level is rather satisfactory and at the very top of the sector standards currently,” notes Florian Cariou, the TP ICAP Midcap analyst in charge of covering the stock.

The margins of diversification activities are increasing, “despite equally complicated contexts”, underlines the research office. The margin of the promotion activity increased by 2 basis points (0.02 percentage points) to 5.5%, which TP ICAP Midcap recalls “close to the current standards of the majors”, while that of the B2C Renovation division appreciates at 7.1% compared to 5.3% last year.

A little further down in the accounts, the exit from the scope of the Atelier des Compagnons which constituted a major source of losses was beneficial for the company. The renovation branch for businesses had greatly weakened the Hexaom group, because it had been penalized by the continued increase in the costs of materials and labor for its end customers while the contracts, signed before the Covid crisis , escaped any price indexation.

The difficulties of the Atelier des Compagnons went so far as to push Hexaom’s 2022 accounts into the red, a historic first for the group. In the meantime, the Atelier des Compagnons was placed in receivership before seeing this procedure converted into judicial liquidation. It is for this reason that the group wanted to postpone the publication of its half-year results until October 4 after the market close.

Relieved of this burden, Hexaom posted a clearly positive net result, close to 15 million euros in the first half, compared to a break-even result last year, due to the marked difficulties of the Atelier des Compagnons.

“Hexaom published half-year results last night, logically back in the green given the deconsolidation of its only significant source of loss, the Atelier des Compagnons being in liquidation,” recalls Florian Cariou.

A healthy financial structure

Above all, Hexaom has a very appreciable safety mattress to withstand lean periods. TP ICAP Midcap, for its part, praises the financial structure “still very healthy” of the house builder with a net cash flow of 71.5 million euros at the end of June, allowing it to “resist the difficult years that lie ahead”.

Hexaom operates in a very complicated individual home market, with households having difficulty obtaining credit in an environment of high rates. At the end of August, the group noted a collapse in order intake of 45% in volume and 40% in value, a level which is in line with “the trend observed on the market”, specifies the research office.

“In this very difficult market context, the group intends to gain market share thanks to its leadership position, its financial solidity (customers looking for reliable players), its mid/high-end offering and its presence throughout of the territory,” explains Hexaom.

Unsurprisingly, the former Maisons France Confort anticipates a marked drop in its 2024 production, between 25% and 30%, completely in line with TP ICAP Midcap’s current expectations. “The group’s ability to adapt its cost structure should, in our opinion, enable it to resist,” adds the research office.

And for the current year, Hexaom confirms its objective of like-for-like growth in turnover between 5 and 7% with an improvement in profitability. TP ICAP Midcap expects an increase of 4.3% in sales for this year. For the design office, the exit of Ateliers des Compagnons following its liquidation will have “a very accretive impact on the group’s results”.

“The group’s ability to withstand a difficult context”, encourages Florian Cariou to remain a buyer on the file, given a discounted valuation. With the exit of Ateliers des Compagnons from the Hexaom scope, it “mechanically” raises its price target to 25 euros compared to 22 euros previously. A target which shows a potential upside of 70% at current prices.