Scherzer & Co AG (DE:PZSG) was able to leverage the favourable market conditions in H117, generating an EPS of €0.15 (vs €0.04/share loss in H116) and growing NAV by 13.5% to €2.55/share as at end-June. Realised capital gains, higher dividend income and a lower negative balance of value adjustments contributed to the solid result.
Although there were no major favourable extra compensatory claim (ECS) rulings in H117, the company maintained an extensive ECS portfolio, which now amounts to €89m or €2.97 per share, providing potential future earnings upside. PZS’s NAV stands at €2.64 as at end-August, in line with its current share price.
H117 results well above last year
PZS reported strong H117 numbers, with EBIT improving to €4.64m from a €1.09m loss last year. The company realised net capital gains of €6.40m (compared to €0.92m in H116) and posted a 22% y-o-y increase in dividend income to €1.44m. PZS benefited from the favourable stock market environment, as the DAX gained c 7% in the first half of the year, while mid- and small-caps appreciated even more (MDAX +10%, SDAX +14% and TecDAX +20%).
Sustained NAV growth
PZS’s NAV currently stands at €2.64 (as at 31 August 2017) compared to €2.29 at end-2016. This represents ytd growth of 17.5% (adjusted for the €0.05 dividend payment made in June), which is ahead of PZS’s five-year NAV CAGR of 15.6%. Performance was driven particularly by some of the current top 10 portfolio holdings, such as GK Software, Lotto24, Horus or Pfeiffer Vacuum Technology, but also Wüstenrot & Württembergische (W&W). Importantly, the company has been able to outperform the large- and mid-cap indices so far in 2017, as the DAX and MDAX increased by c 5% and 11%, respectively (the SDAX and TecDAX grew by 19% and 25%, respectively).
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