Flash comment: NoHo Partners – A solid Q2 with strong profitability in Finland - Nordea

NoHo Partners reported Q2 EBIT of EUR 10.7m, +13% versus Vara consensus and +9% versus our estimate. Q2 net sales were EUR 93.3m, 4% below consensus and our estimates. Operational EBITDA (operating cash flow) was EUR 12.6m in Q2 (EUR 18.3m a year ago, including EUR 4.8m government grants), 9% above our estimate.

Finland profitability came above our expectations, while International fell short of our expectation. The company recorder EUR 1.7m negative fair value change due to Eezy shareholding to its financing costs (in line with our expectation). Leverage (net debt/operational EBITDA ex-IFRS 16) was 2.9x and should increase in Q3 following the acquisition of Holy Cow! during Q3, we believe. July sales were up 4% y/y to EUR 30.4m.

In CEO comments, the company notes that ASP has increased in food restaurants due to inflation, while there has been slight decline in consumer spending in entertainment venues and night clubs. The guidance was kept intact (upgraded on 6 July after Holy Cow! acquisition) for 2023; NoHo expects around EUR 380m sales and around 9% EBIT margin from restaurant business. Pre-Q2 Vara consensus has expected EUR 383m sales and an 9.2% EBIT margin in 2023.

Long-term financial targets will be updated on H1 2024 and the company notes it will reach earlier targets ahead of time. We expect consensus to make slightly positive revisions on the back of Q2 results despite slightly more conservative comments for H2 and continue to view guidance raise possible later this year.

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