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10. December 2019 | 08:05 CET

Is TUI taking over? Homes & Holiday with turnaround and takeover potential

  • Tourism

Homes & Holiday AG has had a difficult time. Following the IPO in summer 2018, the forecast was adjusted in autumn 2018. The stocks of the specialist for holiday properties has not recovered from this to date. In an interview with 4investors, CEO Joachim Semrau explains that the cost-cutting measures are taking effect and that the break-even should be successful in the coming year. There is also a takeover potential. Is TUI taking advantage of this?

time to read: 2 minutes by Mario Hose


Business model realigned

Homas & Holiday has realigned itself in the current year. With the exception of Munich, all branches in Germany were closed and operational management concentrated on Mallorca. The number of employees was significantly reduced and franchise partners were exchanged. The Group is now concentrating fully on holiday properties in the Balearic Islands.

There the group belongs with the brand Porta Mallorquina to the prominent brokers and is with the reservation portal the No. 2 under the Finca landlords. In the second half of 2019, the cost reductions are expected to have a positive impact for the first time and then be fully felt in 2020. This is how the break-even should be achieved in the coming year.

Balearic Islands most attractive market in Europe

Homes & Holiday also offer sufficient growth opportunities on the Balearic Islands alone. Because holiday properties are in vogue: to fulfil a lifelong dream, as a capital investment and yield property. At the same time, more and more people are discovering holiday homes as an alternative to hotels and away from mass tourism. The location of the Balearic Islands in the heart of Europe is unique and attracts people from more than 100 nations to the islands.

From the apartment over the simple Finca on the country side up to the Luxury real estate with sea view is for each taste and purse something thereby. Semrau sees considerable potential. Foreigners alone would buy real estate worth over EUR 1.6 billion every year on the Balearic Islands. If Homes & Holiday were to handle only 10 percent of this, the volume would well triple.

In holiday rentals, turnover could increase tenfold

The potential for holiday rentals is huge. By acquisitions one would have exceeded within one year the critical size of 1,000 holiday houses - at present there are already approximately 1,300 - clearly. The integration of the new properties has been completed.

The market leader has a turnover of more than EUR 30 million per year and has only marginally more properties on offer. By way of comparison, Porta Holiday just generated EUR 300,000 in the first half of 2019. The growth will certainly not take place overnight, but in the medium term a turnover of EUR 8 to 10 million seems possible.

Takeover potential as an upside

The focus on the brokerage business and the letting on the exciting real estate market of the Balearic Islands bring take-over potential. The subsidiaries of Homes & Holiday are leaders there and the Group is debt-free. The market leader in holiday rentals in Mallorca Fincallorca has just been taken over by a Northern European travel group. Also the broker industry in Spain is in motion.

Thus the American star investor Warren Buffet has discovered the Spanish real estate business for itself and wants to become active here.

Conflict of interest & risk note

In accordance with §34b WpHG we would like to point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH may hold long or short positions in the aforementioned companies and that there may therefore be a conflict of interest. Apaton Finance GmbH may have a paid contractual relationship with the company, which is reported on in the context of the Apaton Finance GmbH Internet offer as well as in the social media, on partner sites or in e-mail messages. Further details can be found in our Conflict of Interest & Risk Disclosure.