16. January 2020 | 09:31 CET
Buy Homes & Holiday: Analysts see significant upside potential
Homes & Holiday AG should significantly increase sales and earnings in the current year 2020. This is expected by the analysts of GBC Research in their current study. On the basis of the refocusing on the core business on the Balearic Islands, which began in 2019, GBC has valued the specialist for holiday properties using a DCF model and calculated a fair value of EUR 1.05 per share. Based on the current price level of around EUR 0.40 per share, the analysts see high potential and have given the share a Buy rating. The potential market potential is very high.
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Balearic Islands most attractive holiday property market in Europe
The holiday property specialist has an attractive market environment in the core region of the Balearic Islands. In 2018, properties with a total value of around EUR 4.00 billion were sold on this Spanish archipelago. The company has a good market position on the Balearic Islands in its brokerage and holiday rental business segments and thus a good starting position for further growth.
Significant improvement in turnover and earnings by 2021
Following the increased focus on the core region of the Balearic Islands and consolidation of the corporate structure, as well as the cost optimisation programme that has been initiated, the H&H Group is now back in growth mode. In parallel, significant improvements in operating results have already been achieved. GBC expects significant effects from the cost reduction programme, particularly in the 2020 financial year.
On this basis, the analysts expect sales growth in 2019e from EUR 2.22 million to EUR 2.78 million (2020e) and EUR 3.41 million (2021e). In the context of this expected dynamic development and setting economies of scale, the operating result (EBITDA) should also improve further to EUR -1.68 million (2019E), EUR 0.13 million (2020E) and EUR 0.42 million (2021E).
Business model realigned
Homas & Holiday has realigned itself in 2019. With the exception of Munich, all branches in Germany were closed and the operational management on Mallorca was bundled. The number of employees was reduced significantly and franchise partners were exchanged. The Group is now fully focused on holiday properties on the Balearic Islands. There, the group is one of the leading marketers with the Porta Mallorquina brand and is the number 2 among the Finca property developers with its booking portal portaholiday.de.