A 30c EPS for HK is perhaps a few years away, not now, but by then the track record will either have been established or it won’t. By then, the amount of debt will have decreased; that is also the company’s goal. The company will not distribute the entire profit; instead, a portion of it will be used for debt repayment—this is included in both the forecasts made for the company and in the company’s strategy.
Earnings fluctuate cyclically? Here I completely disagree; HK is a defensive company that has now improved its earnings for 12 (?) consecutive quarters in Europe’s worst operating environment, namely the Finnish market, in a country with record unemployment. Of course, the national economy could be even worse, but HK is still a defensive company.
Margins are thin and that is reflected in the valuation; P/S is around 0.16. Due to its non-cyclicality and defensive nature, a 5% dividend yield could be quite a relevant valuation. Atria is currently at 4.2%, and for the European industry leader Cranswick, the dividend yield is 2% and the P/E is 20. Its operating profit margin is about 7%.
The share price could well stay around two euros in the short term (<1 yr); there are so many different factors involved besides the company’s own performance that it is pointless to predict it. Over a timeframe of a few years, the company has the potential to become a defensive dividend machine.