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Finally, a successful sale for BillerudKorsnäs

June saw good risk appetite and rising stock prices, mainly on hopes of US interest rate cuts and an ebbing trade war.

BillerudKorsnäs rose 9%. It finally made the anticipated sale of forest, at favourable terms. The SEK 12.2 billion price tag corresponds to almost SEK 40,000 per hectare, which is good for BillerudKorsnäs, especially given the attached combination of supply contracts and repurchase options.

It goes from having had a strained balance sheet to being well below its debt target and, assuming our earnings expectations are met, is very well capitalised. Commissioning of the giant new KM7 carton machine in Gruvön is said to be on schedule. We expect gradually improved profits and believe the company will have low valuation multiples. The strong balance sheet also bolsters our expectation of good dividends. BillerudKorsnäs is well positioned as demand for paper packaging improves for environmental reasons.

Stillfront had an eventful June after an acquisition of Canadian gambling company Kixeye was announced early in the month. This is a big acquisition at valuation multiples well below Stillfront’s own. Its earnings per share are increased by around 30%, even including the new share issue to partly finance the transaction. It is also raising money with a bond. The result will be a solid financial position for further acquisitions, and a substantial profit gain leading to a lower valuation. We participated in the rights issue and upped our holding. Stillfront is well-run and has good prospects, and is valued considerably lower than most competitors.

We took in ÅF, or ÅF Pöyry as it is now called following the merger with Finnish Pöyry, as a new holding. ÅF Pöyry is well managed and enjoys a good market, and we believe synergies from the merger could offer a big surprise. ÅF always ranks very highly with engineers as a popular employer, which is important since access to staff has been critical to the strength of the technical consulting market.

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Småbolags­fond

Carnegie Småbolagsfond invests in smaller value companies on the Stockholm Stock Exchange. Such small caps have historically had stronger share price growth than larger companies, partly because they have more opportunities...

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