EPS was a negative surprise; I’ll have to calculate some kind of bridge from EBITDA to EPS when I have the time. 2026 EBITDA is still rising, and apparently the order backlog is good. Let’s wait for developments, but in any case, 2025 is significantly better than Reka Kumi has seen in its history. Specifically, the 2025 EBITDA was, as I understand it, the highest in history and will rise in 2026.
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And when you strip out the net cash from the figures, last year’s P/E is 5. And the forecasts show earnings growth.
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It’s a bit annoying that Markku Rentto is sitting on that pile of cash and not putting it to work. I also fell for buying it back in the day because of the good dividend, but now I guess I’ll be holding it until the end of time at a 50% loss.
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It would have been nice to get more information on the use of capital again. I believe that acquisitions are being scouted constantly in addition to these investments made in production. Hopefully, something good can be found at a reasonable price… otherwise, I’d gladly see the excess cash on the balance sheet in the owners’ pockets, please. This uncertainty is likely the biggest driver of the share price, at least in the short term.
If EV is now approx. €6M (mcap approx. 26M and cash minus interest-bearing debt approx. 20M), EBITDA €2.5M and EBIT €1.157M, then
EV/EBITDA = approx. 2.4
EV/EBIT = approx. 5.19
Yes, but: P/E is indeed over 22. Capital isn’t really generating much of a return here right now.
Does Reka provide any guidance on how much the cash position yields? Or is it just in a zero-interest account?
Personally, I’m fine with them sitting on a pile of cash; essentially, it’s the cash position + a cheap business. Of course, I’m a bit skeptical about what they might find to buy.
At the end of 2025, the group’s cash and other financial assets were 30.0 million euros (31.12.2024: 26.4 million euros). The group’s other financial assets are mainly invested in low-risk investments.
Something like that right on the first page of the financial statements. Financial income of €1.468M is recorded for this year, but in theory, it could partly come from something else I haven’t noticed.
Yeah, I meant more along the lines of whether they’ve commented at all on the cash pile yielding X% per year. Of course, now that I think about it, in a company like this, basically all financial income should come from the cash reserves.
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Yes. I don’t believe the company can be made to grow with just rubber studs. Even the Aura factory dates back to the 70s. It has been slightly renovated now. There are old machines sitting idle. They need to come up with something more productive.
Granted, it’s a bit like cherry-picking if you remove the net cash from the enterprise value but don’t remove the financial income from that net cash from the earnings 
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I’ve kicked off my own coverage of Reka. The operational business seems to be running consistently poorly, but the balance sheet-based valuation looks quite interesting.
There is about 20 million in net cash and about 30 million in the bank account, which could significantly impact the current share price level. Share buybacks would be good for the share price development. The market cap is only 26 million and the valuation level based on the P/B ratio is approx. 0.6, which feels quite low. Of course, it’s possible that the operational business won’t really head in a better direction in terms of results at any point and the money will just sit idle in the account. However, EV/EBIT 10-13 looks quite attractive for the coming years. Reka receives a Buy recommendation with a target price of 10.56 euros. Reka Industrial Oyj - Financial Summary and Valuation
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Where do two-thirds of the operating profit and three-quarters of the net profit disappear to with guidance of growing EBITDA?
Forecasts are 100% based on mathematical models. Guidance or other narratives have no impact on the forecasts. However, the forecasts can be influenced to some extent by choosing a different model. Reka’s operating profit development doesn’t seem very predictable, which is likely reflected in the forecasts. Perhaps profitability is disappearing into the establishment of the Ukrainian subsidiary.
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Great reflections here! I was on the parent company’s board for years. I haven’t been involved in any way for a couple of years now. The company’s situation seems to have stabilized, and the recent communication is very clear. Growth is being sought from rubber, and they are looking for ways to put their cash to use. The situation will resolve itself in due course. The stock is readily available, and I decided to jump in with a reasonable position. #V
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You seem to know the company and the main owner reasonably well. Any guesses as to what that cash will be used for and on what timeline? I’m not looking for an exact target, but just some general direction?
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I am not guessing or speculating, but in my opinion, the company’s announcement says it quite clearly: “Reka Industrial’s strategy aims to increase shareholder value through corporate transactions. This is backed by strong expertise in industrial manufacturing and international operations, complemented by our entrepreneurial way of operating. Based on these strengths, we identify and evaluate new opportunities and continue to develop our operations.”
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