MBH Corporation Plc (ETR:M8H), the Frankfurt-listed investment company, has paid its first dividend after net profits jumped by 190% in 2019
The business, which takes stakes in small and medium-sized enterprises, also reported a 306% rise in revenues to £50.8mln driven both by new investments and established portfolio companies, it said.
After-tax profits were £3.6mln, said MBH, with organic profit growth of 19% from businesses that were part of the portfolio at the start of 2019.
That portfolio now comprises ten companies though this is likely to grow further in the current year, it said.
“The current environment created by the coronavirus crisis and also MIFID II means opportunities in the small business sector have rarely looked so attractive,” it added.
Construction Services accounted for £41.4mln of the revenues, followed by education at £9.4mln.
The figures included the results of 4 companies for the full year (Acacia, Parenta, Du Boulay and Cape), proportionately 4 companies acquired during the year (UK Sports, KS Training, Guildprime and Gaysha) and 2 assets acquisitions (Beauty College and Apprentice Supermarket), said the statement.
Asia Pacific Energy Ventures was demerged on 22 April and is not included in the financial statements.
The dividend for the year was €0.05, while MBH said it had cash and equivalents of £4.5mln at the year-end with the equity ratio at 94%.
Callum Laing, co-founder and chief executive, added: “We are very proud of the incredible growth we have shown and that within just one year of being listed we are in a position to issue our first dividend – and as previously always stated, it is very much our intention to continue to do so in the future.
“Whilst we would have liked, and originally had intended to, offer a dividend in the EUR 2-3 cents range, we have decided that in light of current events it is better to pay a reduced amount and retain earnings for eventualities unknown so far.”
MBH added it is also reducing the number of board directors to three from six, with more decisions to be devolved to the Principals Board with decisions sent up to the board only when necessary.
Allan Presland, non-executive chairman, chief financial officer (CFO) Victor Tan and the non-executives David Hallam and Toby Street leave today.
Allan Presland will remain managing director of portfolio company Parenta while Victor Tan will continue his role as CFO but no longer sit on the board.
Lana Coronado is to be as the new non-executive chair effective on 1 June. Coronado is based in the US and a partner at Stone Peak Private Equity with extensive entrepreneurial experience, particularly in the field of IT consulting, MBH said.
Laing added: “With the growth of the companies in the group, we are now able to move to a leaner board structure, whilst still retaining the expertise of those that will leave the board."
Going forward, he said the outlook for 2020 is unchanged.
“The businesses within MBH recorded growth in earnings in the first quarter when compared to the same quarter in 2019 though due to the COCID-19 pandemic MBH will not publish a forecast for business development in 2020 for the time being.
“With the completion of the acquisition of Samuel Hobson House (Health segment) and the takeover of Robinson's Caravans (Leisure segment), MBH has already established two new segments this year.
“The group plans to continue to acquire companies in existing and new industries and expects to acquire a similar number of companies as in 2019.”
MBH has a proprietary strategy known as Agglomeration that it uses to identify opportunities.
Using the system, companies convert their private shares into public shares in MBH Corporation Plc at an agreed multiple.
Fixed for 365 days, owners are incentivised to accelerate their growth trajectory using the resources of the PLC, said MBH such as cross-selling to other group companies and where appropriate zero cost funding for new growth projects.
Shares in Frankfurt dipped 1.3% to €0.45.