Harvia (HEL:HARVIA) is an excellent example of a company that has been able to flourish under this new era of pandemic investing: this stock is a pandemic beneficiary with a strong Q2 and H1 greater than 2019, based on increased new home improvement and repair projects as well as sales in the key global sauna and spa markets. Additionally, long-term growth expectations are unchanged with operational and production capabilities maintained.
Harvia second quarter highlights
- Revenue +50%
- Operating result +91%
- H1 revenue +26%
- Operating result +18%
The Harvia share price is up 15% following Thursday’s announcement.
The Armchair Trader will hear the H1 results and webcast call on 13 August. We have followed Harvia since November at €11 and 180m market cap (now 13.7 and 252m respectively) and Harvia is one of our top 34 recovery stocks.
Harvia has been a total success since it was listed in March 2018 at around €5 a share. The stock was trading at €13.25 Euros at the time of writing.
Harvia has very experienced management, which knows it’s way around international distribution and sales channels. The company does not rely on organic growth alone, which is the hardest part to grow. Harvia’s M&A activity has been excellent in the last two years.
Surge in demand for healthy living
We believe that these results will keep on coming. The healthy living trend is growing and people are spending on their main and holiday homes, not just in the Nordic region but further afield in many other key markets for Harvia. The hotels and spas will come back also – healthy balance sheet companies are using this time to upgrade their facilities in order to welcome new guests further down the road.
With greater equity coverage this hidden gem could well exceed the conservative Finnish analysts’ €13 target: especially with Harvia’s 5% pa sales growth, 20% adjusted operating profits, and over 60% dividend pay-out ratio.
The sauna and spa market is popular and growing worldwide and Harvia is the global leader in this segment with 70 years’ experience, 14% market share and sales in over 80 countries. The most recognized international sauna brand among Finnish, Swedish, German, Russian and American consumers just may get some overdue share price recognition.