Here are Ate’s pre-earnings comments as Administer releases its results next week Wednesday.
We reiterate our Add recommendation for Administer and fine-tune the target price to 3.1 euros (previously 3.2 EUR). Administer will report its Q3 results on Wednesday, 5.11. at 8:30 a.m. We have revised our forecasts for the end of the year and the coming years slightly downwards, reflecting the continued weak market situation. In the big picture, however, the changes are relatively small, and we see good opportunities for the company to continue its earnings turnaround during next year. In addition, the company is making a major Sarastia acquisition, which, if successful, offers significant earnings growth potential. Although there are also clear risks associated with market recovery and Sarastia, we see the risk-reward ratio in the lowly valued stock as interesting.
Administer reported softer-than-expected Q3 figures this morning. The weak economic situation weighed on development in practically all of the company’s business operations, and the initiated cost adjustments did not keep pace with the decline in revenue. However, Administer has continued cost adjustments across the group and expects the profitability trend to improve again starting from Q4. Based on customer payroll data, the company already sees small signs of improvement in the market situation. This would help in continuing profitability improvement next year, in addition to which the integration of the large Sarastia acquisition will be a significant project shaping next year. Based on the Q3 figures, however, there is downward pressure on our forecasts today.
00:00 Introduction
00:14 Development in different business operations in Q3
01:06 Econia’s difficulties
01:43 Sillan’s revenue decline
02:16 EmCen’s development
02:51 Revenue decline came as a surprise
03:57 Efficiency measures
04:26 Sarastia acquisition
05:51 Integration plan and Sarastia’s profitability potential
07:05 Change in Procurement Act and Sarastia deal timeline
08:29 Outlook
09:39 “How does the whole package stay together?”
The decline in revenue seen in Q3 came as a surprise, and in light of the company’s comments, achieving growth in Q4 will also be challenging. As a result, our previous assumption of a gradual recovery already in Q4’25-Q2’26 was cut, and this was reflected in a downward revision of revenue forecasts for the coming years. With weaker growth, the earnings leverage we previously expected will also be smaller. With the lowered forecasts, the stock’s valuation is no longer as attractive with 2026 multiples, and hopes for a more significant improvement in earnings shift to 2027, when stronger results from the Sarastia integration are also likely to start being seen. Visibility a few years out is still so weak that at this point, we remain on a waiting stance regarding the stock, monitoring profitability improvement and the Sarastia integration.
Kyösti Kakkonen accuses Administer’s major owners of greed in Talouselämä:
"Veteran investor Kyösti Kakkonen has a clear vision for the companies to be purged from his portfolio. Both construction consulting firm Solwers and financial and payroll management company Administer are getting a piece of his mind.
‘Both companies have betrayed their shareholder promises as early as the listing phase.’
According to Kakkonen, the companies were listed at overinflated prices. Since the IPO, the share price has dropped significantly.
‘The listing prices were not based on economic realism, but on the greed of the major owners,’ Kakkonen says."
In the IPO, among the largest owners, only Bocap, owned by Kakkonen’s spouse Julianna Borsos, made an exit.
Well, Gordon Gekko would surely have noted: well done.
Here are Atte’s comments on how the competition authority has also approved the acquisition of Sarastia’s financial and payroll management business for wellbeing services county customers.
Here are Atte’s comments on how Administer intends to invest even more in housing company services.
Administer announced on Monday that it is consolidating the group’s housing company services by establishing a new company. The new company is based on the business of Good House Oy, founded in 2014, and Administer’s ownership stake in the company is 80%. Good House founder Kimmo Karvinen has been appointed CEO of the new company.
Here are Atte’s advance comments as Administer reports its Q4 results on Wednesday, March 4th.
The company’s earnings release can be followed here at 11:00. We expect the company’s revenue to have decreased from the comparison period, weighed down by the weak market situation, as Econia’s staffing services, in particular, remain under pressure. Regarding profitability, however, we forecast a clear improvement from the weak comparison period, as the previously initiated efficiency measures should begin to show more clearly in the figures. The greatest interest in the report is focused on the 2026 guidance and outlook. Administer’s growth will receive significant support this year from the Sarastia acquisition, which is expected to be completed at the beginning of April, and its successful integration will be a key focus this year.
