Company Report: Homemaid AB

I have explored Swedish stock markets lately, especially smaller companies with growth potential, moderate valuation levels and which business is easy to understand. I found a company named Homemaid.

Homemaid AB is Swedish company, listed in Aktie Torget (Ticker HOME B) which offers all types of household services and office services. Company has started 1997. Headquarter is located Halmstad, Sweden and it has about 200 employees. In 2005 company expanded and bought laundry business and in 2013 company acquired Veteran pool which has 36 offices in Sweden. Veteran pool extends the household services range and it offers gardening, craft and care for over 9000 registered veterans.

The good and at the same time risk about the business is Swedish government RUT- tax deduction program. RUT- is tax deduction for household services. Homemaid AB is one of the benefiting companies. At the end of 2013, about 500000 Swedish households bought RUT- services about 14000 companies. Deduction amount is 50000 SEK and it is political decision what changes are made in RUT-program. At the moment current government is  not made any changes.

Valuation 

Homemade is currently very moderately valued at  P / E about 10.

Company's net sales  has growth steadily last years

• 2014 8% 
• 2013 7%

Earnings per share growth

• 2014 0,89 SEK
• 2013 0,79 SEK
• 2012 0,19 SEK 

Equity ratio 44.1%
Gearing -9%

Dividends 

 

Current  dividend is 0,75 SEK per share and yield, based on current stock price 8.8 SEK, is 8,5%. Pay out ratio is high but the business is not capital intensive and the company has low gearing. 2013 dividend was 0,40 SEK per share.


I think company can perform well in the coming years. 8-10% yearly organic growth is probable and they can also make some new acquisitions. At current valuation, It is difficult to see very much of the downside. I think One minus is a small trading volume but that is expected companies like this. I might do purchase in near future.

Walde