Pointpack
APM venture with risks
With the purchase of a stake in P2A, Pointpack has loudly entered a new area of activity of delivering APMs that it previously was only attempting to develop with its pilot program. Although P2A’s involvement in a large contract with the Polish Post will substantially change the company’s results, we are cautious it will have an overly supportive impact on the company. Especially, because at the same time Pointpack has effectively delayed any potential distributions to its shareholders from its core cash generation operations (we delay the first assumed dividend to 2024E with a PLN 7.60ps DPS, DY of 19.8%). We expect consolidation of P2A to result in transformation of the company’s top line on a consolidated basis, but not to have any impact on the underlying business. In total, we increase our 2022E/2023E revenue forecasts to PLN 103.3m/154.4m (from PLN 59.5m/74.4m). At the earnings level, we expect P2A’s incremental contribution to offset the increased fixed cost base (as was visible in 1Q22 results) and slowdown related to anticipated by us recession in 1H23E. Overall, we increase the respective net profit forecast to PLN 6.8m/8.5m in 2022E/2023E (from PLN 6.4m/7.0m assumed earlier, we note that without P2A deal we would have cut 2022E/2023E net profit estimates by 22%/34%). With our outlook on the core business, we maintain a BUY rating and set our FV at PLN 55.0ps (vs. PLN 60.00ps earlier), which implies 44% upside. On our forecasts, Pointpack trades at a P/E of 6.3x/5.0x for 2022E/2023E.
P2A’s M&A will alter the company’s profile. On 20 May 2022 Pointpack acquired a ca. 51% stake in P2A BOX sp. z o.o., a provider of APMs with smart cloud solutions that has one large contract with the Polish Post for delivery and maintenance of ca. 2k APMs (with an estimated value of PLN 240m in total over multiple years). Although Pointpack has paid for this 51% stake price reflecting its book value (an immaterial few PLN k), we consider the additional PLN 10m paid to one of P2A’s stakeholders for bonds issued by P2A as the effective economic price paid for the stake in P2A. Pointpack estimates its maximum liabilities from the deal at to up to PLN 30m (including change in WC).
Looking beyond the top line of P2A’s contract with the Polish Post. Overall, we consider the P2A deal negatively for Pointpack from a strategic standpoint, as in our view engagement in such a larger (and likely one-off) contract for delivery of APMs temporarily limits the company’s cash generation, introduces a new set of operational risks and effectively changes the company’s profile. With an uncertain profit profile from the deal (considering the 51% stake, effective price for the bonds, risks for the Polish Post contract’s margin, future outflows related to minority dividends, cost of financing and undefined synergies that require additional investments from Pointpack), we are sceptical the P2A deal will prove to be an outright success (if the deal with the Polish Post is not expanded). In total, we estimate its NPV (excluding WC changes) at only PLN 2.8m for Pointpack.
Analyst
Marcin Nowak
+ 48 22 236 92 44
