I don’t know (I’m not in the industry) how machine dealers differ from car dealers, but if the market position of KH - Koneet Group in the Turku region, mentioned from about 39:30 onwards, is accurate, then things are going well: The regional machine market is down about 30% this year, but KH-Koneet is not. More workforce is coming to maintenance from the beginning of the year to meet the increased machine fleet in use. It’s worth watching the video from 39:00 onwards if KH interests you.
As an owner of Kh Group, I hope for a snowy winter!
KH Group’s P/B ratio has fallen sharply below 0.40. Even if it also includes Indoor’s intangible assets (speculative value). At times like these, I wish KH Group’s board had the courage to start share buybacks. At the bottom prices of the “Transformation Journey” narrative, one million shares would only cost 0.53 MEUR, and with that, 1.7% of the share capital could be retired. And it could be repeated if the dive continues. The funds received from the sale of HTJ are now lying in the parent company’s cash as a fear buffer. At times of such slaughter, I wish the company’s view would be that now is the time to create shareholder value after many dividend-free years.
I would also support this, but I think that when the buyback announcement appears, the stock would rise sharply, and purchases could not be started immediately on the same day. What if we just continue buying and then there will be a lively atmosphere in the January rally. The free float is quite small
Yes, this kh-group has become for me the most undervalued stock in a while right now.. I will continue my buying program..
Interest rates will drop sharply, and I suspect that we won’t even stay at 2% but will go below.. This will bring a boost to both the housing market and the furniture trade.. It will certainly take its time before the ship turns around, but there’s time to polish the Excel. People’s purchasing power will improve through many channels. Loan interest rates down, upcoming salary increases + nearly zero inflation in Finland. On top of this, the improvement in companies’ financial position..
Indoor’s efficiency measures on top of this, as the cherry on top of the cake. What could go wrong🙂 He who fears does not play.
As a downside, the current economic uncertainty, numerous co-determination negotiations, and thereby the postponement of purchases..
The furniture business is tough – let’s hope the future is brighter. When the market recovers, hopefully KH-Group will be “in shape” (pun intended) and, considering a future divestment, things will get rolling.
A bit more on the topic from Kauppalehti. A few excerpts that are also interesting from Indoor’s perspective:
“Isku Interior intends to sell a significant portion of its production capacity to other operators.”
“Isku Koti will continue its operations both online and in some stores.”
“Isku Group believes that the entire industry should be revitalized through industry arrangements. It is exploring different options.” This particularly makes me wonder what it could mean for Asko? Will some business brand be abandoned in the industry and expertise merged through mergers to save the domestic sector?
To me, Isku’s situation and the company’s figures don’t quite add up.
One cannot conclude a significant weakening of demand from the revenue figures; profit just hasn’t materialized.
Would it be more accurate to say that growth commensurate with the investments was not achieved?
Perhaps even more directly, were investments made in the wrong place after all?
It’s easy to attribute commonly discussed reasons to all sorts of problems and mistakes.
There aren’t terribly many targets for such arrangements in this country, so the phone must have rung in Veijalainen’s office.
I don’t believe anything particularly fruitful would come of it if solutions aren’t found for the basic challenge, i.e., increasing sales.
A short piece about the Luleå office in the online publication Maskinentreprenören (published 16.12.2024, no paywall).
The space is shared with S-Rental, KH-Maskin’s sales and rental subsidiary.
Recruitments for sales and after-market positions have been successfully completed, with 9 people. The number will be increased as Northern Sweden is expanded into.
Operations have been running at full capacity since the opening in early November, and machines have already been sold.
The indoor space is 1500 square meters. The outdoor area for machines and demonstrations is 10,000 square meters.
“It’ll be fine once interest rates come down and we return to normal…” I apologize for my bearishness, but what kind of scenario is it where we have returned to normal and the Finnish consumer’s position improves?
A low interest rate environment is not, in my opinion, the desired economic state. In the basic economic fundamentals, there are hardly any improvements available for the domestic consumer in the medium term. And there still seems to be that 9 billion adjustment, a large part of which, unfortunately, affects consumption. According to several experts, the new normal in the housing market could very well be 5500-6000 transactions/month — where we were almost already in October, by the way. OP also seemed to comment that “October was already a good normal mortgage month.” Indeed, the going can be tough for quite a long time if a significantly better economic situation is awaited. It would be essential to maintain (and ideally gain) market share in all circumstances. An example of this is the excellent performance of KH machines.
What do you think drives the somewhat high interest rate level? If Europe couldn’t achieve growth even with zero interest rates, how sustainable is this interest rate level?
Europe’s momentum doesn’t look very bright at the moment..
I, for one, see a declining interest rate accelerating housing sales, and falling interest rates bring more savings to mortgage holders.. On top of this come salary increases.. Which, however, might keep inflation galloping.. And a strong dollar adds its own spice to the mix
If the ECB’s long-term inflation target is two percent, and the lender wants a real return, the long-term interest rate target is two percent plus a risk premium. For that reason, I don’t even see the current interest rate level as very high.
Interest rates below the inflation target, on the other hand, are desperate artificial respiration for the economy, which was practiced for a decade. If the ECB does not change its policy (or the economy falters badly), I do not believe in a longer period of low interest rates.
Of course, interest rates will fluctuate up and down periodically.
Banks, as lenders, have a divine right to create money at the push of a button (see e.g.). Thus, if I deposit one billion euros into your account, which you return to me with a 1.5% interest rate, and I myself pay 0.5% on this, the 10 million annual compensation I receive is pure real return even in a 2% inflation environment. In 2009, a somewhat similar situation got out of hand, when risks were notoriously externalized from banks to taxpayers. Of course, the matter is not this simple (either), and probably no longer the topic of this thread, but this is indicative nonetheless.
Not forgetting to wish a peaceful Christmas and the most profitable New Year to the KH Group thread!
It would be interesting to hear what the group’s cash assets are intended to be used for. No dividends have been paid to shareholders from the divestments of HTJ and Logistikas. Below is a quote from the dividend policy:
Dividend Policy
The goal for the coming years is to invest in the growth of the core business and to pay dividends after significant divestments, within the limits allowed by the balance sheet structure and financing agreements.
Next year, the owners of KH koneet have an option to sell the remaining 4.9% in 2025, the price of which was determined to be EUR 3.4 million in 2023. So, an additional investment of that size is possibly coming next year. But it would be good for the business to start generating profit, so that not everything has to be financed by selling companies.
I, for one, would expect dividends for shareholders from these divestments. Shareholders haven’t received added value in any other form in the past couple of years either.
Asko’s competitor filed for bankruptcy. The bankruptcy application was filed by K/S Tampere I-III Oy. Isku still assures that the restructuring would continue.
Isku Koti Oy (furniture retail) has been filed for bankruptcy by a real estate company from Tampere.
It’s difficult to see that the Lahti District Court can approve Isku Koti Oy’s application for corporate restructuring, when the company has made losses even during so-called good times.
Furniture manufacturing might be a different matter if other chains include them in their selection.
It’s difficult to see that manufacturing being distributed to other retailers. The industry as a whole is not recovering anytime soon.
Indoor Group (Asko/Sotka) has its own production, and even that is already available to other retailers. The price level of domestic manufacturing doesn’t easily fit into the selection of the industry’s success story (Jysk).
The peak year for bankruptcies still holds its grip.
Oh dear. It’s clearly gloomier than expected and hoped for. This news certainly doesn’t improve the housing market’s appeal. It seems it will take longer for construction and housing sales to return to their previous pace. And it’s even more important that KHkoneet now have diversification in Sweden. Hopefully even more in the future. Thanks to the folks who have linked those Swedish news here. I wonder if the Finnish and Swedish markets will diverge even more in the latter half of the 2020s?
But tell me, wiser ones, as this ad from Sotka came from every channel today. It’s good that they seem to have money to advertise the January sale, but I don’t understand why the entire selection needs to be discounted? Offers are part of smart commerce, as offers can activate customers to buy, but what’s the idea behind everything being discounted? One would think that by targeting offers, one could better manage margins? Or sell exactly the inventory that needs to be cleared. Or activate buyers for that part of the selection where customers are sensitive due to the season. I asked our household’s interior decorator about this, and she also thought it rather erodes trust in the normal price. I tried to think, but no other stores came to mind where the entire selection would be on sale, or at least at -60% levels. Is it laziness in pricing, or something even more worrying? Or is there some other strategy that I don’t understand?
The discount is up to 60%, i.e., over 0%, but on average less than 60%. (And apparently it doesn’t apply to all products either.) Sotka lives by these eternal sales gimmicks; perhaps in a couple of decades, they’ll get another toy fine for it.
Yeah, there were a few products (Pohjanmaa, Valkola) that the discount didn’t apply to.
But I had to go check, and it did state that all sofas were at least -60%, all rugs at least -60%, all beds at least -60%, all storage furniture at least -60%, all dining sets at least -60%, etc… I guess at that point, a larger part of the sales is at least -60% off.
Wouldn’t it be more sensible to at least somewhat direct sales towards products with better margins or those sitting in storage? In more successful stores (Jysk, Ikea, Puuilo, Tokmanni, Motonet, Rusta, etc.), you rarely see almost everything being painted with the same large brush at the same percentage. If you’re pretty much the only store doing that, are the others dumber or vice versa? And if that works, why not maximize the benefit and raise the percentages to -80%? You just always price the normal price higher. But whether that’s the best way to direct sales is another matter.
What could be the reasons why this kind of offer strategy is just continued? Especially when sales are just dropping this way. But maybe there’s something I don’t understand… I think a bit more should be demanded from the marketing manager.
