AutoWallis to use record profits to continue growth strategy
AutoWallis’ general meeting has decided to allow treasury share purchases, authorized capital increases, and passed resolutions on how to utilize its after-tax profits, among other items, according to a press release sent to the Budapest Business Journal.
At AutoWallis’s regular annual general meeting, the company’s shareholders accepted the 2021 business report with its record revenue and profits: the revenue of the company listed in the Premium category of the Budapest Stock Exchange more than doubled to almost HUF 200 billion and both its margin generation. As a result, AutoWallis closed last year with profits and EBITDA of HUF 7.8 bln, surpassing its own plan.
Besides being driven by earlier acquisitions, the expansion was also fueled by organic growth that surpassed domestic and regional market averages, even though the period was impacted by the supply constraints faced by vehicle manufacturers. The shareholders also approved the recommendation of the Board to place HUF 468 million in after-tax profits into the profit reserve. The sum of HUF 1.87 bln consisting of the company’s consolidated after-tax profits and the dividends from its subsidiaries last year’s results will also be used to carry out AutoWallis’s growth strategy.
Commenting on the result, AutoWallis CEO Gábor Ormosy said that the company plans to double its revenue, which could reach HUF 400 bln by 2025, while its EBITDA, which the management considers to be the best indicator of profitability, may top HUF 14 bln. He also added that AutoWallis is on the right path to realizing its strategy, which they continue to consider feasible despite the current business and economic environment.
Shareholders have authorized the board to increase the company’s share capital, which may be increased to a maximum of HUF 10 bln, close to double the current amount, if the step is considered necessary for, for example, to fund growth or procure the capital necessary to carry out larger acquisitions.
Regarding the possible goals of increasing capital, Ormosy said that similar to previous transactions, it is primarily intended to cover potential share buybacks and acquisitions by way of share swaps, and also creates the possibility of further stock exchange issues in the next 18 months.
The company’s general meeting renewed the Board’s previous authorization to purchase treasury shares equal to no more than 25% of the share capital. In this context, the CEO underlined that one of the main objectives of the share buyback is to secure the share requirements of the Employee Share Ownership Plan, for which the current share price level may be a suitable timing, especially in light of analyst target prices that are significantly above the current share price.
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