MT Højgaard Holding (MTHH) today isused an announcement that, in our view, should be highly welcomed by the market. MTHH announced that its board of directors, following the sale of Seth, has decided to initiate a sale process for all of its International activities, excluding those activities in Greenland, which have already been transferred to MTH Denmark in connection with the restructuring programme for International announced earlier this year. As its International division will now be classified as discontinued operations, the revenue guidance for 2023e is lowered by DKK ~250m while the EBIT (before extraordinary items) guidance is raised by 80% or DKK 178m to DKK ~400m
May finally open up for share incentive programmes
As we wrote in our previous comment (sale of Seth), the volatile performance of the International division has long overshadowed the robust results of the Danish operations as well as taken up considerable management resources. Looking ahead, today's decision has, in our view, several important implications: 1) it reduces the complexity of the investment case, making MTHH a purer equity play; 2) it should reduce the discount that has been applied by the market as consequence of the disturbing impact on earnings from International; 3) It allows management to fully exercise the second wave of its strategy plan with, i.e focus on market share capture as well as financial efficiency and value creation; 4) It frees up management capacity in general and - potentially most the important: 5) it enables the company to offer a share incentive scheme to its employees which, in our view, is key to retain and attract talent to further strengthen the overall quality and competitiveness of MTHH. Needless so say, it could also, down the road, allow MTHH to use its share as currency in BD.
Charge of DKK 53m in Q3'23 P&L
Financial statement wise, the Q3'23 P&L will be impacted by a DKK 53 charge that includes tax-related write-down's pertaining to activities in Greenland.
