In a context of proven crisis for residential construction, the single-family home segment has managed to largely limit the damage. This is evidenced by the numerous testimonials from professionals in the sector, which point to a jump in sales since deconfinement against the backdrop of the French appetite for greenery, the outskirts of cities and even the countryside. Another parameter to take into account: the construction sites did not have much difficulty resuming, while social distancing measures are much easier to apply on individual house sites than on collective ones. How is Hexaom (formerly Maisons France Confort), the leader in the business, doing? We will have to wait until August 6, the date of the publication of turnover for the second quarter of 2020, to answer this question precisely. The latest indications on the development of activity date from the point for the first quarter. Over the period, revenues fell only 2.6% to 195.8 million. But resilience is not an empty word for this family group based in Alençon in the Orne and founded more than 100 years ago. For example, the Renovation division recorded growth of 11.2% over the first three months of the year, while maintaining a solid order book. The Construction activity simultaneously came to a halt at the end of March, both in the worksites and in its commercial dynamics, which is logical. However, the group has managed to capitalize on its lead in the digital field to garner orders. This bodes well for the future, although, unsurprisingly, the second quarter will mark time given the forced inactivity (at least partially) in April and May.
Return to sustained growth from 2021
A recovery in production is expected in the second half of the year. But that will not erase the shortfall associated with the health peak. For the year as a whole, analysts’ forecasts expect sales to stagnate in 2020, at just over 830 million euros against nearly 1 billion initially targeted by managers. Net profit should fall to 17 million euros against 18.5 million in 2019. But we can reasonably think that it is the outlook for 2021 and beyond that interests investors and explains the recent rebound of the title (+ 20% on three months). Because Hexaom will register in winback mode from next year. The market consensus gathered by FacSet mentions a forecast growth in billings of 5.5% combined with a sharp rebound in net profit, to 23.2 million. At the current rate, the group is capitalizing on this forecast 9 times, as a new development cycle begins for the construction of single-family homes, given the development prospects of medium-sized towns, the preferred playground for the Norman firm. With its leadership status, its broad offering (broken down by brand), its excessive cash flow (nearly 50 million euros at the end of December 2019) and a well-engaged diversification strategy, Hexaom has every chance of continuing to outperform its market. . And that, without counting on possible acquisitions, a historical development lever that the group will undoubtedly be tempted to activate in the coming months. For all of these reasons, and given the financing conditions that remain favorable for first-time buyers (despite the banks’ turn of the screw), we are positive on this cyclical stock.
Our advice: buy Hexaom at 28 euros with the primary objective of returning to 35 euros. Isin code: FR0004159473.
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