Panostaja Oyj Stock Exchange Bulletin, other information June 27, 2018 at 13.00
Panostaja Oyj Is Paying Off Loans And Updating Its Financial Goals
Panostaja Oyj has paid off all of the parent company’s interest-bearing liabilities in the amount of MEUR 22.3 and made an agreement on a new MEUR 15.0 corporate acquisition limit. This limit can be used to take out three-year credit loans for the parent company to fund corporate acquisitions. The new corporate acquisition limit will replace the previous corporate acquisition limit.
Paying off the parent company’s interest-bearing liabilities is part of the goal regarding Panostaja’s new financial structure, which is intended to be debt-free in a normal situation. The parent company may incur debts temporarily to fund corporate acquisitions between divestments.
Paying off the parent company’s interest-bearing liabilities changes the parent company’s financial structure dramatically and reduces Panostaja’s risk. The lower risk is also reflected by Panostaja’s profit target. As part of the change, Panostaja’s Board of Directors has also approved updated financial goals for Panostaja Group.
As a result of the parent company’s new debt-free financial structure, the Board of Directors has set 15% as the new long-term return on equity target and 40 % as the equity ratio target for the Group. The previous targets were 20% and 40%, respectively, when including subordinated loans in the equity. Other long-term financial goals and the dividend policy will remain unchanged.
Overall, Panostaja Group’s long-term financial goals are as follows:
- In a normal situation, the parent company’s financial structure is debt-free. The parent company may incur debts temporarily to fund corporate acquisitions between divestments (new goal).
- Return on equity is at least 15% (previously 20%), with the objective for the IRR (internal rate of return) being more than 22% for each investment target.
- Equity ratio is at least 40% (previously 40%, when subordinated loans are included in equity).
- The cumulative earnings per share (EPS) EUR 0.8 for the five-year period 2014–2018 (unchanged).
- Panostaja’s objective is the constant increase of shareholder and market value so that the overall yield of shares exceeds the average long-term yield of the Nasdaq OMX Helsinki Small Cap Index (unchanged).
- Distribution of profits reflects the development of the Group’s result in the long term, and the primary aim is to ensure the continuity of the Group's investment activity, after which it will be possible to distribute at least half of the annual consolidated profit targeted at the parent company shareholders, either as dividends, capital repayments or the repurchase of shares (unchanged).
“Panostaja’s updated financial goals more accurately correspond with Panostaja’s business structure and support value creation in the long term. The parent company’s debt-free balance is ideal in enabling the investment company to actively implement its business operations and seize identified investment opportunities. The corporate acquisition limit increases the flexibility of our financial structure and secures our readiness to make investments even between divestments. In the investment targets, interest-bearing loans will still be used as part of the efficient financial structure, which means that debt financing will continue to have an important role in Panostaja Group,” CEO Juha Sarsama says.
CEO Juha Sarsama +358 40 774 2099
Panostaja is an investment company developing Finnish SMEs in the role of an active majority shareholder. The company aims to be the most sought-after partner for business owners selling their companies as well as for the best managers and investors. Together with its partners, Panostaja increases the Group's shareholder value and creates Finnish success stories. Panostaja has a majority holding in nine investment targets. Panostaja’s shares (PNA1V) are quoted on the Nasdaq Helsinki Stock Exchange. In the 2017 financial year, the Group’s net sales totaled MEUR 193.2.
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