Kleemann will return €4 million to shareholders

Some positive news from Kleemann today: the company has called an Extraordinary General Meeting on February 4th to decide on a return of capital to shareholders of €4.0 million (about €0.17 per share, I think). That’s a substantial amount for a company with a €35.5m market cap.

This news is another sign that Kleemann’s financial position is strong. The company’s income statement doesn’t look pretty due to provisions for doubtful debtors, as I described in last month’s update on Kleemann, but I think the cash flows are what really matter here. Kleemann’s solid cash flow generation has helped them reduce their debt and already allowed them to return to shareholders €4.5m in dividends plus a return of capital in 2014. It looks like the company will look to do more of the same in 2015.

Kleemann’s stock price is up about 10% to €1.50 on the back of this news.

Disclosure: long Kleemann Hellas

Posted in European Stocks and tagged .

NeverLoseMoney

Author of ValueInvestingBlog.net. Private investor.

7 Comments

  1. Congratulations on your timely purchase, again! Also, the Avi-tech has gone up more than 10% since. Believe me, there must be some quite prominent investors monitoring your blog for recommendations especially in Singapore.
    Recently, I bought a small position of a very small company Captii Ltd (U18) which I think is quite promising. May I request your professional take on this stock?

    • Unfortunately my Kleemann purchases were mostly done at higher prices, so my timing wasn’t good at all there. But market movements are unpredictable anyway and I can’t anticipate them. I simply try to buy cheap companies and hope for the best.

      I have looked at Captii a few times and it does look cheap. There has always been some other company that seemed a bit more attractive at the time and that is probably why I still don’t own the stock at this point. If I do end up buying it, I will write a post about the company.

      • Thank you and awaiting for your write up.

        By the way, I understand you are still holding onto PNE Ind like me. As I will be attending the AGM next week, if you have any questions for the board, I may be able to ask for you.

  2. Hi Paul,
    I also monitor the Kleeman company for a while, but i have several problems with the company and that why i didnt buy yet,
    1)I dont know their exposure to Russia -i noticed at their presentation Kleeman mentioned that they performed a lot of projects at Russia -I am not sure if the doubtful accounts will not rise at the future
    2)The China infrastucture market begin to slow down,and i also dont know how it will affect the company,
    In general at all documents i read about the company i still didnt find exact sales segment per country -And that why i still didnt initiated a position. I cantacted with company management but still didnt get any answer from them

    • Yes, those are valid points. The company could do a better job in specifying where their sales are coming from. In 2012 Russia was responsible for €11.5 million of sales. I have not been able to find data since then either. Also no idea how big their Chinese business is at this point. It was established in 2011. When I read Kleemann’s reports I don’t get the sense that it is a substantial part of their business at this point.

      Kleemann is operating in some exotic markets. There’s definitely some uncertainty there. On the other hand, the business is trading for 50% of book value and has been very cash generative throughout the financial crisis.

  3. Congratulations gentleman !
    I believe Kleeman is a very well managed company, but I think the competition is very strong, Otis for example is expanding by Russia and China, and this company is the best in the world. I don’t understand how KH can beat that company. What it’s the moat ? or castle ? hehehe…

    By the way, what is your opinion about Metka company, it’s really cheap company , you Knows ?

    Thanks and Cheers

    • Hi Vladyslav,
      I don’t know if Kleemann has a moat and if they ultimately can compete with the really big companies in the industry. HeresyValue had a good comment and a link to an excellent article about this subject: https://www.valueinvestingblog.net/is-this-greek-elevator-company-ready-for-lift-off/#comment-381

      Kleemann is still a very small company. I think there is some room for a small and flexible company to get some business their way, but ultimately it is very difficult to obtain a place between the established players in this market. At this price I don’t worry too much about this longer term concern though.

      I have briefly looked at Metka. I’m not going to invest in it, but the main reasons have nothing to do with the company. The first reason is that I already have about 10% of my portfolio invested in Greece and I have decided this is my maximum, so I’m not looking to put more money into Greece. I still like what I own there, so I’m not looking to replace a holding either at the moment.

      The second reason is I already have a fairly large position in another construction company called Conduril. They also do business in some pretty exotic countries, mainly in Africa. Buying Metka would give me more exposure to the construction sector in emerging markets.

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