Helesi

Shares in Greek wheelie bin maker Helesi have wilted on concerns regarding debt – yet these ignore imminent government grant payouts and a proposed premium-priced €10m (£9m) placing.

Helesi enjoyed another strong year in 2008, with sales growing by 32% to €65.8m as all divisions posted double-digit growth. However, to ensure growth continues, the company has borrowed heavily to expand its manufacturing capacity, hence the rise in net debt to a year-end €67m.

Servicing that debt meant that net profits rose only slightly to €7.3m, though aptly named finance director Apostolos Binomakis remains confident. He says, ‘We expect €21m of grants to come this year and, as our contracts are around 75% with the government, our banks see us as a safe bet. Why else would they allow us to increase our facilities and convert a lot into longer-term debt?’

As part of the placing at €0.64 (57.5p), chairman Sakis Andrianopoulos plans to subscribe for a minimum of €4m of shares, with existing investors invited to buy at this price rather than the ‘artificially low’ market price. ‘Our strategy is to manage the balance sheet and this placing will go towards that,’ assures Binomakis. ‘We generated €7.3m last year and we’ll generate more in 2009.’

His assertion is rooted in robust prospects for the year ahead: demand for bins is expected to be stable; a new Italian pallet facility is coming on stream; the vehicles arm has clinched a record €50m contract with the Athens municipality; and the services arm is poised to go live on a Cypriot waste management facility.

Lately depressed by debt worries, the shares should receive a rerating once grants come through and the placing completes. Hold.

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