We at Inderes have initiated coverage on the investment company Byggmästaren.
Who is Byggmästaren?
Byggmästaren invests in, owns, and develops a number of business groups with the goal of creating long-term value for shareholders as well as for society and other stakeholders.
The focus is mainly on investments in Sweden and the rest of the Nordic region, primarily small and medium-sized companies, both listed and unlisted.
In this initial analysis, analyst @christoffer.jennel writes that we view the second largest holding, Green Landscaping, and the relatively new holding, DP Patterning, as key value drivers with attractive upside at current valuations. We assess that the remaining portfolio holdings, including the largest holding Safe Life, are fairly valued.
Although Byggmästaren has delivered strong shareholder returns in the long term since its IPO in 2014 (16% annual total return), the last few years have shown weaker performance compared to competitors and relevant benchmark indices, reflecting strategic changes and challenging market conditions in parts of the portfolio.
Christoffer has written a company report on Byggmästaren following Q1
Byggmästaren’s Q1 report showed a slight increase in net asset value (NAV) per share to SEK 67.6 (2% q/q), mainly due to a significant upward revaluation of DP Patterning (“DPP”) following its very strong Q1 results, which more than offset the continued share price pressure on Green Landscaping. The total shareholder return (TSR) was -14% (SIXRX: -1%), leading to the P/NAV discount widening to 22% (Q4’25: 8% / 5-year average: 9%). We consider the NAV development to be resilient in varying market conditions, and the company has 465 MSEK in available liquidity, which provides significant room for maneuver for new investments. Following the report and the Q1 results of the core investments, we have slightly cut our fair value range to SEK 52–76 per share (from SEK 54–77), where we have balanced the significant increase in DPP’s valuation against a more cautious near-term profitability outlook for Green. We still consider the current P/NAV discount excessive, which creates an attractive risk-adjusted upside for the share. We are upgrading our recommendation to Buy (prev. Accumulate) as the discount has widened further, while cutting our target price to SEK 65 (from SEK 66).
Byggmästaren’s CEO Tomas is coming to a ROAST next Thursday! For Finns, the company may feel more familiar if I mention that Kari Stadigh is the 2nd largest and Georg Ehrnrooth is the 3rd largest owner.
Here are Christoffer Jennel’s comments as Byggmästaren’s portfolio company Team Olivia sells its Danish operations to Carelink Gruppen.
Byggmästaren announced that its portfolio company Team Olivia, in which it holds approximately a 17.5% stake, has signed an agreement to sell its Danish operations to Carelink Gruppen. We see this as a logical continuation of Team Olivia’s ongoing streamlining process, which transforms the company into a purely Swedish personal assistance provider. The transaction is expected to close at the end of Q3’24, and it likely paves the way for a cash distribution to Byggmästaren later this year. Since Team Olivia is an unlisted holding valued at Byggmästaren’s reported value in our calculated Net Asset Value (NAV), the announcement does not trigger immediate changes to our forecasts.
Renato Rios has written about Byggmästaren’s recent acquisitions.
Byggmästaren announced that its largest portfolio company, Safe Life, completed four acquisitions in the second quarter of 2024, adding approximately EUR 20 million in annual revenue. In our view, these acquisitions demonstrate that Safe Life’s “buy and build” strategy remains highly active after Bridgepoint became the majority owner last year. The additions also fit logically into the group’s ongoing transition toward recurring revenue. The announcement does not trigger immediate forecast changes, as our valuation framework for Safe Life already assumes a steady pace of acquisitions. However, considering the EUR 20 million in revenue acquired in Q2 alone, we are reviewing whether the forecast range for revenue from future acquisitions should be raised.
Here is a new company report on Byggmästaren regarding Q2 from Jennel
Byggmästaren’s Q2 net asset value (NAV) per share fell by approximately 5% from the previous quarter to 64.5 SEK, as the roughly 38% decline in Green Landscaping’s share price more than offset the resilient unlisted core holdings. Total shareholder return was flat (approx. 0% quarter-on-quarter vs. SIXRX: +9%), with the share at 51.5 SEK, which narrowed the P/NAV discount to approximately 20% (Q1’26: ~22%; 5-year average 9%). The key change this quarter is a roughly 25% cut to the fair value of Green. Revenue once again exceeded expectations, but EBITA profitability fell short of expectations for the second consecutive quarter, leverage rose to 3.4x, and the CEO resigned after the quarter. Together, these led us to lower our margin, cash flow, and M&A assumptions, as well as expand the risk premium. This was partially offset by DP Patterning’s result, which was again clearly higher than our forecasts, leading to a roughly 45% increase in our fair value, although it was not enough to counter the decline caused by Green. Thanks to a strong liquidity position*, a 50 MSEK buyback program, and the evaluation of several candidates for the fourth core holding, we believe Byggmästaren remains well-positioned to capitalize on the elevated discount. Reflecting the lower valuation for Green, we cut our fair value range to 50-74 SEK (previously 52-76 SEK) and our target price to 63 SEK (previously 65 SEK), while reiterating our Buy rating.
Wow, that DPP growth. It seems to be scaling really fast. It’s already 13.5% of the NAV, and the trend is upward. Green’s valuation might be near its bottom. There is cash on hand for new acquisitions.
Byggmästaren is at quite an interesting stage; there is potential.
