Applus increases its profits by more than 21% between January and June

Applause In the first half of the year, it recorded a net profit of EUR 26.4 million, which is 21.4% more than in the same period in 2022, when the profit amounted to EUR 21.8 million, the company reported on Tuesday to the National Securities Market Commission (CNMV). The company’s revenues in the period from January to June amounted to 1,001 million euros, 9 percent more than in the same months last year, and 10.2 percent more at constant exchange rates.

For its part, adjusted operating profit margin reached 11% between January and June, an improvement of 90 basis points compared to that reported in the first half of 2022. “This margin improvement is mainly due to our asset rotation strategy,” he explained. Joan AmigoCEO of Applus.

After the results achieved in the first half of the year, Applus increased its financial outlook for the whole of 2023. Thus, while it previously expected organic revenue growth “in the mid to high digits”, the company now expects this increase to be in the “high single digits”. At the same time, the company expects operating margin to rise above 60 basis points compared to 2022.

“With the good results achieved in the first half of the year and our forecasts for the second half of the year, we expect good growth in the year both in revenues and in adjusted business results,” emphasized Amigó.

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On June 30, a takeover offer (takeover) made by the fund was announced Apollo, through the instrumentality of Manzana Spain BidCo, to 100% of Applus for the amount of 1.226 million euros (9.5 euros per title in cash). The CNMV accepted the takeover bid for processing on July 17, a process that “does not imply a declaration of a decision regarding the approval of the bid or any of its terms and conditions,” the stock regulator warned.

The consideration offered by Apollo of €9.5 per share represents a premium of 2.3% compared to the quoted price of Applus shares at the close of the market on June 28, the last stock exchange business day before the application for authorization of the offer (€9.29). Likewise, the stated price represents a premium of 36.8% on the weighted average price per volume of Applus shares during the year before submitting the application for authorization of the offer (EUR 6.94) and of 24.8% on the weighted average price per volume of the company’s shares during the half year immediately before submitting the application for authorization of the offer (EUR 7.61).

The effectiveness of the offer will depend, among other conditions, on a minimum acceptance by 75% of the voting share capital.

Movements in the capital

In this context, since June 30, various movements in the share capital of Applus have been recorded. In fact, this same Tuesday fund The Redwheel European Focus Master doubled its share weight company and increased it to 2.079%, compared to the 1.03% it previously held.

Added to this, for example, was the operation carried out last Monday by the American bank JPMorgan Chase, which increased its stake in Applus to 5.026 percent compared to the 1.125 percent it previously controlled.

Other operations were carried out by Sand Grove Opportunities Master Fund, Samson Rock Capital, Victory Capital Management and Swiss bank Zurcher Kantonalbank, which raised stakes of more than 1% in the Spanish inspection, testing and certification company.

They are joined by the movements of the British financial institution Barclays, which collected 2.153% of the company’s share capital, and the French banking group BPCE, which reported 1.39% in Applus+ through its subsidiary Natixis. Likewise, German asset manager DWS Investment, controlled by German bank Deutsche Bank, has carried out various operations in recent weeks and currently holds a 4.93 percent stake, while Harris Associates has 2.959 percent and Norges Bank owns 1.832 percent.

However, the most active was the American investment bank Morgan Stanley, which, as of June 30, according to CNMV records, performed various tasks. The financial entity currently owns 9.363% of Applus shares, while before the announcement of the takeover offer it had 6.12%.

economic magazine Expansion has announced that several of these funds that have conducted operations in recent weeks will form «blocking the minority» in the company prior to the takeover bid by Apollo —which must be approved by at least 75% of shareholders— controlling more than 25% of the company’s equity.

The objective of this blocking minority, whose main expectation is that there will be a higher counter-offer than Apollo’s, would also be to achieve an increase in the offer from the fund. In this sense, the company’s shares have been trading above the 9.5 euros offered by Apollo for weeks.

Namely, after the announcement of the results for the first half of the year, the price of the Applus share amounted to EUR 9.75 at around 10:30 a.m. this Tuesday, or 0.52 percent more than at the close of trading on Monday.