Research Reveals Volatile Performance of Newly Listed European Small Caps
New research from Kirchhoff Consult AG, a leading German financial and corporate communications agency, has analysed the latest financial results of 108 small caps that listed in Europe in 2019, and found that 42 operated at a financial loss last year, compared to 38 in 2018.
The research, which was commissioned by MBH Corporation PLC, a UK headquartered listed diversified investment holding company that acquires successful, well established small to medium enterprises across multiple geographies and sectors, also reveals that only 57 of the companies saw their revenue increase between 2018 and 2019 and just 30 saw their operating income (EBITDA, EBIT) rise.
Out of the 108 newly listed small caps, only five paid a dividend to investors for the last financial year.
In contrast to these findings, for the year ended 31st December 2019, MBH Corporation PLC achieved sales growth of 306% to £50.8 million (2018: £12.5 million) and a net profit of £3.6 million – an increase of 190% compared to the previous year (2018: £1.3 million). It also confirmed its first dividend of EUR 0.5 cents corresponding to a dividend yield of 1%. It’s EBITDA increased by 215% to £5.234 million.
Callum Laing, CEO of MBH Corporation plc said: “This research clearly shows that an IPO doesn’t always lead to stronger performance and increased revenue. In the two years since we listed, we’ve managed to sustain our growth by executing a proactive programme of finding highly successful, profitable and well-established businesses to add to our portfolio.”
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By leveraging its unique Agglomeration strategy, MBH creates substantial shareholder value through the consistent and accretive acquisition of excellent companies. With Agglomeration™, profitable companies convert their private shares into public shares in MBH Corporation plc at an agreed multiple. Fixed for 365 days, company owners are then incentivised to accelerate their growth trajectory using the resources of the plc including expertise, skill transfer of best in class practices, cross-selling to other group companies and where appropriate, zero cost funding for new growth projects.
Each group company retains its autonomy by following appropriate Corporate and Financial Governance, and business owners are also incentivised financially to enhance shareholder value. As shareholders, they benefit personally from this.