Dagsfersk analyse med target 19kr:
BUY, LUMI.OL: SP, NOK 8.56; TP NOK 19.00
Status quo
Sales and adj EBIT pre-announced given the PW
Booking curves unchanged, accelerated cost cuts
Debt situation still challenging, constructive bank dialogue
Numbers in line, bookings unchanged, accelerated cost cuts
Lumi Gruppen has already released a profit warning ahead of Q2, pre-announcing Q2 sales of NOK 134m, adj EBIT of NOK 39m and reported EBIT of NOK 31m. The actual figures are in line with the pre-announcement. The PW said preliminary bookings in Sonans Utdanning (SU) was down 30% as of week 30 for the ‘22/’23 school year. In addition to weak numbers from Sonans, Oslo Nye Høyskole (ONH) had seen flattish sales y-o-y. On the updated booking curves per week 31, SU is still down 30% and ONH has become slightly weaker, now -6% y-o-y. Our understanding is that Lumi will provide a trading update in September when the final intake is ready.
On costs, Lumi is now announcing significant cost measures to respond to the challenging market situation: totaling NOK 60-65m incl the already announced NOK 26m, i.e. NOK 34-39m of new cost savings. This is ~NOK 5m higher than we had anticipated previously. On top of this, Lumi is also working to cut another NOK 15m in SU, which could bring total cost cuts in SU to ~NOK 75-80m.
Constructive dialogue with bank
Net debt excl. IFRS 16 was NOK 395m ending Q2, spot on our estimate. This suggests a year-end leverage ratio close to ~3.7x, which is challenging. Lumi states that it is in risk of breaching bank covenants and is in discussion with its bank (Nordea) to allow necessary head room, and that dialogue is constructive so far.
Limited changes
The Q2 report gives limited new information compared to the trading update and PW two weeks ago. On the positive side is more aggressive cost cuts, but no final solution regarding the debt situation creates uncertainty. In total, we expect limited