Byggmästaren: Unlocking cash while staying disciplined on growth - ABG
This is a third party research report and does not necessarily reflect our views or values
* Byggmästaren proposes extraordinary dividend and share split* Updates dividend policy and reaffirms strategic focus* Positive signal from a capital allocation perspectiveKey highlights from Byggmästaren's announcementByggmästaren today announced several capital allocation and strategy measures, with the following key points:Extraordinary dividend and share split: The board will call an EGM to propose an extra dividend of SEK 32/share (SEK ~233m in total), followed by a 4:1 share split to improve liquidity in the thinly traded B-share.Dividend policy update: A new, explicit long-term dividend policy has been introduced, targeting an annual increase in the dividend, and that the increase over time should at least follow the development of the NAV. Additionally, the board already signals a 2025 ordinary dividend of SEK 2.80/share pre-split (vs. SEK 1.70 in 2024).Capital position: Following the partial divestment of Safe Life, and together with unutilised credit facilities (SEK 230m), Byggmästaren will still have SEK ~500m available for new investments after the proposed payout and buybacks. Execution so far on the SEK 50m buyback program (running until end-2025) amounts to SEK ~2.3m.Strategic focus: Byggmästaren reaffirms its strategy to invest in companies with scalable business models, strong management, and long-term growth potential, targeting >20% IRR. Current core holdings Safe Life, Green Landscaping, and DP Patterning (~70% of NAV excl. cash) are highlighted as meeting these criteria.Capital allocation philosophy: Management continues to stress a balance between shareholder distributions (dividends/buybacks) and disciplined reinvestment. Since its founding in 2013, Byggmästaren has created around SEK 2bn of value.
A balanced and disciplined approach
We had anticipated additional shareholder distribution on top of the ongoing buyback programme following the successful partial exit of Safe Life. Today’s decision delivers a significant extraordinary cash payout of 12–13% of market cap, which we view as disciplined given the substantially increased liquidity. Moreover, the signalled 2025 dividend of SEK 2.80 exceeds our SEK 2.00 estimate, lifting the implied 2025e dividend yield to above 1%. We also regard the explicit dividend growth policy as a positive, even though Byggmästaren already has a strong track record of distributions. On strategy, we note that management’s reiterated investment criteria imply that several of the smaller holdings may not fully meet these requirements, which to us suggests that further portfolio measures could be on the agenda.
NAV discount of 10%
The positive share price reaction (+9% today) looks justified. The P/NAV discount has narrowed from 17% on Friday to 10%. This remains marginally above the five-year average of 9% and is still elevated versus relevant peers, despite the company’s solid track record and recent, positive news flow.
A balanced and disciplined approach
We had anticipated additional shareholder distribution on top of the ongoing buyback programme following the successful partial exit of Safe Life. Today’s decision delivers a significant extraordinary cash payout of 12–13% of market cap, which we view as disciplined given the substantially increased liquidity. Moreover, the signalled 2025 dividend of SEK 2.80 exceeds our SEK 2.00 estimate, lifting the implied 2025e dividend yield to above 1%. We also regard the explicit dividend growth policy as a positive, even though Byggmästaren already has a strong track record of distributions. On strategy, we note that management’s reiterated investment criteria imply that several of the smaller holdings may not fully meet these requirements, which to us suggests that further portfolio measures could be on the agenda.
NAV discount of 10%
The positive share price reaction (+9% today) looks justified. The P/NAV discount has narrowed from 17% on Friday to 10%. This remains marginally above the five-year average of 9% and is still elevated versus relevant peers, despite the company’s solid track record and recent, positive news flow.