(Finance) – Edil San Felicea leading integrated operator active in the critical infrastructure maintenance sector in Italy, closed the first half of 2024 with a Production Value equal to 24.6 million euros, up 12% compared to 21.5 million euros as of 30 June 2023. The fruits of the ongoing diversification are evident, especially in the railway sector, and of the recent reorganization of the operational structure: although for the “Operations” BU the value of production is equal to 10.3 million, while for the “Engineering and Production” BU the figure is equal to 14.2 million.
“The company has grown a lot thanks to maintenance, but in my vision it has need for diversification with major worksthen do those construction sites that allow you to concentrate there for two or three years, and create something that is different from maintenance. Also because in general the large works sector is more complex but has a higher margin”, theCEO Lorenzo Di Palmaon the sidelines of the Board of Directors which approved the half-yearly report. The entrepreneur is convinced that he has the ability to face this new market, with the internal reorganization in the two BUs and the hiring of managers, and “the last step will be to obtain a final certification by the end of the year to participate in contracts for over 100 million euros in the infrastructure field”.
THE’EBITDA of the first six months amounts to 5.7 million euros – with 23.1% of EBITDA margin – up 5% compared to the 5.4 million on 30 June 2023. The operating result stands at 4.2 million euros, up 2.5%.
The value of capex at 30 June 2024 it was equal to 6 million euros, compared to the first half of 2023 in which it was equal to 1.4 million. The increase relates to investments for the opening of the new operational headquarters in Bologna and the new industrial site, adjacent to the main headquarters in Nolaaimed at the production of metal carpentry and signs. “We expect to be operational at the beginning of 2025, at the latest in June – explained the CEO – This will be a production site, which will not compete with large producers, but will help the company to optimize its business in terms of operational efficiency and savings”.
The backlog amounts to 114.8 million euros, with an increase of approximately 42.6% compared to the 80.5 million of the 2023 financial year. The growth is the result of the awarding of high-value contracts, such as in particular that relating to railway maintenance works obtained by RFI – Italian Railway Networkfor a value of approximately 12 million euros, which allowed the company to open up to the railway sector, as declared at the time of the IPO. Also of note are the orders relating to extraordinary maintenance work on the Calata San Domenico Viaduct for approximately 8 million euros and construction works for the expansion of the Polytechnic of Milan.
Di Palma is not afraid that investments in maintenance or large works will be episodic, but he does not believe in growth driven by a few large orders: “There is so much work, and unfortunately there are so few companies in Italy, that the problem there won’t be. If a great work isn’t done, many other activities will be done, there are companies full of work, which perhaps have a turnover of 20 million and a backlog of 1 billion that are certainly unable to invoice a bit drugged by PNRR, but for example we haven’t really participated in PNRR or Ecobonus contracts, so let’s carry on as we always have. I don’t believe in these big backlogs. we want to have constant growth over time and gradually achieve new objectives that we set ourselves.”
THE’net financial debt meanwhile it recorded an improvement compared to the figure for the 2023 financial year whose value of the net financial position was equal to 5.1 million euros. In fact, as of 30 June 2024, the NFP is negative (cash) and equal to 6.5 million euros. The improvement is a consequence of the greater liquidity generated by operational management.
This allows you to look at potential extraordinary operations with serenity. On the M&A front, explains the CEO, “we have opened two-three tables with targets that have a turnover of between 10-15 million with good margins typical of the railway sector. Our desire is to make an acquisition, but we are looking internally to make the best purchase and all the necessary steps, also because caution is needed since we have been listed for a year. I hope that next year can be the right one to close a deal. With the fund we could easily be autonomous, but the issue is not just economic: we want to identify the right target because in Italy you find many realities that are hyper-politicised, that depend on the single individual, that are not structured”.
Even without extraordinary transactions, the stock exchange was able to appreciate the growth of Edil San Felice. The title has gained over 60% since landing on Piazza Affari a year ago (27 September 2023), in a period in which small caps struggled a lot (the FTSE Italia Growth marks -3.3% in the last 12 months). However, exchanges are lacking: the maximum monthly value was 740 thousand euros (January 2024) and adding the last three months (June-July-August) does not reach 600 thousand euros.
“We are in a particular moment, in which the market is weak and there are few movements, and this is a bit disappointing, but considering the rise in the IPO stock, many tell me that we cannot complain – says Di Palma – I complain equally because I believe we deserve something more, but in general I have never regretted the choice to go public: we have gained visibility and became much more attractive to hire qualified personnel”.
With them investors “However we speak, in our capital we also have a French fund that we have hosted in the company (Indépendance AM fund, ed.), we see interest and want to cultivate these relationshipsalso for a possible capital increase that we could need for an acquisition”, underlines the CEO.
On the workforce front, “we have reached almost 300 employees, in fact there have been 60 hires, and there will be a further 70-80 in the near future so we will reach around 400 employees in 2025but this aligns with the logic of going to open very important construction sites”. As regards the outlook, “we expect to respect what was said at the time of the listing, i.e. reach 2025 with a turnover of 50 million euros, a figure that was unthinkable until a few years ago.”