RCS - Deutsche Beteiligung - Edison issues review on Deutsche Beteiligungs

Deutsche Beteiligungs AGAnnouncement

20/12/2021 07:00

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RNS Number : 0663W  Deutsche Beteiligungs AG  20 December 2021

 

London, UK, 20 December 2021

 

Edison issues review on Deutsche Beteiligungs (DBAN)

Deutsche Beteiligungs (DBAG) posted a NAV total return (TR) of 35.3% in FY21
(to end-September 2021). This return is in line with public and private equity
(PE) markets and followed a weaker FY18-19 amid an industrial slowdown in
Germany. Performance was driven by the revaluation of existing holdings
(mostly broadband/telecom and IT/software) on the back of both earnings growth
and multiples expansion. Additional uplift came from selected
disposals/refinancings. Management proposed a dividend of €1.60 per share
from FY20 earnings, which implies a solid 4.1% yield.

 

DBAG's shares currently trade at a 10.8% premium to NAV, visibly below the
five-year average of 18.6%. If we assume that DBAG's PE investments segment is
valued at a discount to NAV in line with its peers (currently at 11%), it
implies a P/E multiple for DBAG's fund services business of 9.0x based on new
management guidance of segmental profit of €16-17m for FY21e. This implies a
c 69% discount to the current average FY21e multiple for listed alternative
asset managers of c 29x (based on Refinitiv consensus), suggesting that DBAG's
current market valuation may be relatively undemanding. DBAG's shares now
offer a dividend yield of 2.1% based on the FY20 pay-out of €0.80 per share.
While the dividend per share is unlikely to return to pre-COVID-19 levels
(€1.50 in FY19) in the near term, we note that DBAG's dividend policy is for
a stable or rising dividend per share, with a mid-term FY23 target of
€1.00-1.20 communicated last year.

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