Share buybacks, RAS contracts, insiders and investment banks showing faith in the company. AKVA group has never been worth more than now.
It’s gone like a shot. 29 per-cent in the last month alone. 70 per-cent in the last six months. The aquaculture equipment supplier company’s share price is a combination of several factors.
Illustration: Infront
At the end of November, AKVA group ended its share buyback program. A total of 200,000 own shares were traded in, at an average price of NOK 72.95. After this, AKVA group itself holds 377,883 shares in its own company, equivalent to 1.1 per-cent of the total outstanding shares.
Hunting
This autumn’s buyback, which has been earmarked for the company’s own share and incentive programme, has an unrealized gain of EUR 0.5 million. And it could soon be more. At least if you are to believe strategy and business development director Kjell Ove Hatlem who loaded up with shares in the wake of capital markets day at the end of November.
An important driver has been the company’s contract capture in land-based salmon farms. According to an overview prepared by Salmonbusiness, companies, with a total production capacity of 1.6 million tonnes of salmon, are currently hunting for financing. Taking into account that there are only a small number of suppliers of turnkey RAS facilities, AKVA group is well placed – together with its main competitors Billund Akvakultur, Aqua Maof and Krüger Kaldnes.
Profit growth
This has recently resulted in the contracts with Nordic Aqua Partner (EUR 50 million) and Premium Svensk Laks (EUR 95 million). There may soon be more contracts of this type.
Pareto Securities has a BUY recommendation on the share price. But the price target, of NOK 95, has already passed. On Tuesday afternoon, the share price stopped at NOK 104, after an increase of 7.4 per-cent. The investment bank envisages earnings per share of NOK 3.20 in 2020, rising to NOK 5.37 and NOK 7.36 in 2021 and 2022 respectively – when margins from the RAS contracts tick in.
