Quest Holdings: Where will the Group invest 130m euros?

Quest Group is very close to meeting 2021 financial targets already by 2019. In parallel Quest is planning investments of €130 million over the next five years.
These were mentioned, among others, during yesterday’s Hellenic Fund and Asset Management Association presentation. 
Quest Group’s President Theodoros Fessas noted that the major shareholders of the company would be comfortable with liquidating part of their position in order to increase the share’s free float, however Quest’s capitalisation has not yet reached the proper level.
In more detail,  2021’s targets included €600 million revenues (this year revenues will exceed € 550 million), EBITDA  and EBT margins of 9% and 5% respectively (both essentially achieved) and an 100% improvement of Return on Equity from 10% to 20% (this year’s performance will be close to the target).
As part of the presentation, the Management team repeated the guidance for the full year 2019 (sales of over €550 million, EBITDA €50 million, EBT  €30 million , Investments of €33 million and Net Debt between €10 million and €15 million), while they were optimistic about the future prospects of the group. 
Regarding the Groups “next day” , the following were mentioned:
  • The Group is heavily focused on the Greek market and therefore is positively affected by the current Greek macro environment.
  • The €130 million investment (reinvestment of 80% of the organic profits) will be directed to the ACS Distribution Center, as well as acquisitions in both energy and other sectors.
“Our aim is to expand into sectors related to our already established functions” (” in co-centric circles “as it was typically mentioned) with Mr Fessas not excluding even greater investment if opportunities arise. “We have realtively easy access to further debt and I think there will be opportunities for acquisitions in the area of businesses that are under pressure and need to restructure their obligations.”
According to CEO Apostolos Georgantzis the areas of interest are Internet On Things, mobile phones, cooling-heating, e-commerce, electronic transactions, infrastructure and distribution networks.
  • The subsidiary Uni Systems expects a better 2020, as it has a backlog of contracts of over € 200 million, and public sector projects will also run through next year.
  • Higher revenue is expected in 2020 also in the energy sector, as the large acquisition of 2019 photovoltaic parks will have a twelve-month effect (the next target is to increase the current 25.2 MW power through acquisitions to 30 MW).
  • The positive trend in wholesale and retail trade will continue (the number of stores will increase)driven by IoT and mobility, aiming at higher profit margins.
  • In the field of courier services (ACS) in 2021 the new distribution center (investment of over € 40 million) will be completed, which will increase the company’s production capacity fivefold, so that it can take advantage of the increasing penetration of e-commerce in the future.
Finally,   in response to relevant questions ,Quest Group’s managemen tnoted:
a) In the last four years sales increased by more than 70%, operating profit by 140% and pre-tax profit by more than 600%. Over the past decade, the listed company has returned to its shareholders in cash and shares (BriQ Properties shares) around € 80 million.
b) The company assists GE. Demetriou Company in distributing the Toyotomi and Kerosun brands, achieving a 9m-euro turnover in the last nine months. The profit margin is low and we will see in coming months whether the acquisition  of GE. Demetriou will materialise  (it will depend on the court ruling on GE. Demetriou’s protection claim and on the negotiations with the creditor banks).