Published on April 22nd, 2015
There have never been many options for investors to invest in publicly listed camping operators. As of recently, there is one option less.
French company Homair Vacances has been delisted from the Alternext market of Euronext Paris in February 2015, via a public tender offer followed by a squeeze-out for all shares at a price of EUR 8,70 per share. During the summer of 2014,Iliade sold a majority stake to the Carlyle Group.
“We delivered a very successful and profitable growth under the ownership of Montefiore since 2006, and we believe Carlyle’s support would facilitate our growth and value creation plans for the coming years,” Alain Calmé, the Homair chairman, said in a statement in 2014.
Financial terms of the stake purchase were never disclosed. Just a few days before the Carlyle deal, Homair had agreed to acquire Eurocamp, a British outdoor holiday rental operator.
Eurocamp and Homair combined, manage about 15,000 mobile homes at about 300 campsites, primarily in France, Spain, Italy and Croatia. The Company has leveraged its French and British customer base to expand its holiday parks offer in major European countries (France, Italy, Spain, Croatia, Portugal, the Netherlands ans Austria). It sells holidays in France, in France, in the United Kingdom, in Belgium, in the Netherlands, in Germany, in Denmark, in Italy, in Ireland and in Spain.
In early 2015, Homair reported FY 2014 revenues of EUR 178,2m (including pro-forma numbers for Eurocamp) and an EBITDA of EUR 39,9m, implying an EBITDA margin of 22,4%. At the end of its FY 2014, Homair had a net debt of EUR 148,5m.
The squeeze out price of EUR 8,70 per share implied a market cap of EUR 99,2m for Homair Vacances and an Enterprise Value (EV) of EUR 247,7m. This implies a valuation of EV/EBITDA 6,2x for Homair, using 2014 numbers.
One of the few remaining publicly listed camping operators is Nordic Camping. Nordic Camping is listed in Sweden and is operating currently 14 camping sites and resorts at locations all over Sweden. The company has a strong track record of growing organically and actively consolidating the Swedish camping market. In 2014, Nordic Camping reported revenues of SEK 78m, an EBITDA of SEK 18,8m and a net profit of SEK 9,2m or SEK 1,09 per share. Growth has been strong over recent years and the company managed to beat its organic growth target of 10% p.a.. Nordic Camping is not short of innovative ideas either.
Since last year, the company has a cooperation with the Swedish Migration Board, offering temporary housing for asylum seekers during the off-season at several of its camping sites. Nordic Camping boasts a strong balance sheet (net debt / equity ratio of 55% at the end of 2014) leaving ample room for further expansion. Management is outspoken about its ambition to continue to acquire new camping sites and to expand existing ones. There have also been tremendous improvements in the area of IT over recent years, and we believe that Nordic Camping has probably the most efficient operations on the Swedish camping market, which is still very fragmented.
Nordic Camping’s share is currently trading at around SEK 23,5, implying a market cap of SEK 199m and an Enterprise Value of SEK 232,8m. Looking at FY2014 figures the implied valuation is an EV/EBITDA multiple of 12,4x.
The big difference between Homair and Nordic Camping is size and growth rate. Homair is the biggest player in France and the UK with revenues of around EUR 180m, its growth rate is below 5% p.a.. Nordic Camping has revenues of around EUR 8,4m (at current FX rates) but is growing at high pace. Over the last three years, sales have expanded by 32,6%, 33% and 16% respectively. We believe that chances are high that toppling growth 2015 will be at least around 15%.
Conclusion: Investors interested in a rather non-cyclical growth story with real estate assets currently booked at purchase cost value (i.e. large revaluation potential once IFRS accounting standards will be applied) and significant consolidation potential in the industry, should have a close look at Nordic Camping. Being a leader in its market, the company seems well-positioned to continue its growth track. It will be interesting to see what the “end game” will look like for the camping industry in terms of consolidation. Carlyle is an owner with large fire power and it is probably not completely unrealistic that they are interested to expand Homair’s reach further, once Eurocamp has been integrated successfully. By then Nordic Camping has probably grown in size additionally and might present an interesting target.