With the new CEO, Aallon Group has built its own team responsible for mergers and acquisitions, which negotiates, finalizes, and integrates these deals. To my understanding, no new recruitments have been made for this, but rather internal role changes. These were also mentioned in the H1 report:
So nowadays, the CEO is not primarily handling these deals alone, getting their hands dirty. Aallon, however, already has a strong presence in every major city, and local players surely know the other local offices very well. It is often from this level that preliminary M&A explorations begin.
Discussions about Aallon and its share price development are quiet. I wonder if this is going anywhere or if it will just languish forever around the €10-10.5 mark? I have gradually increased my position over the years, and it is the fifth largest stock in my portfolio, with a weight of about 4% of the total portfolio. @Atte_Riikola, is there a new report on Aallon coming at some point?
A new report will be released at the latest in connection with the February financial statements, unless any larger acquisitions occur in the meantime. But in itself, Aallon Group’s performance is quiet and steady. In my view, the situation for the company remains similar to before: Finland’s weak economic outlook is dampening organic growth in the short term, but through acquisitions, the company’s growth pace is quite brisk. According to our forecasts, growth for 2025 would be around 16%.
In connection with the financial statements, of particular interest will be the development of the company’s profitability and how the organizational restructuring carried out last year has affected it. At the same time, the company merged subsidiaries, which should make running the group’s administration more efficient in the future. The foundations for organic earnings growth in the coming years are therefore strengthening as the company seeks more efficiency from its own operations and, presumably, the Finnish economy will provide at least a slight tailwind for growth at some point. I understand there are still plenty of potential acquisition targets in the market.
Based on our forecasts, Aallon Group’s adjusted P/E ratio for this year is around 10x, so expectations are very modest, provided that earnings development continues to move gradually in the right direction. In other words, if earnings grow in the coming years, I would be very surprised if the stock continued to hover at its current level.
