The SFPI Group is net cash positive with €5m (AV definition; corporate at €25m) at the end of FY2022. It intends to remain so. This is a reasonable stance as smaller businesses cannot expect much from their banks when the business gets rough.
Rough was effectively the going experienced in Covid-marred 2020 and the recovery process. Furloughed French staff, the working capital release and passing on the 2019 dividend helped nudge the net cash position up to €53m. Things improved further in 2021 in spite of the purchase of treasury shares to the tune of €10m. The net cash position was €65m (€75m on corporate computations) or c.20% of the market cap. In 2022 this figure had reverted to €5m after a sharp rise in the working capital requirement.
The dividend policy hinges on earnings meaning that the 33% drop in profits was matched by a contraction in the dividend to €0.05/share from €0.08 in respect of 2022. This has the merit of protecting the group’s firepower but sadly provides little positive signalling that the owners are certainly not income adverse.
It is also worth mentioning the built-in safety of relying on the conglomerate-type structure: the businesses are fairly segregated so that one weakness may not impact the group. It is also easier to make quick restructuring decisions and avoid lengthy discussions with unions about changing work practices if it involves only one legal entity. Lastly, the parent holding company was well funded at the close of 2022 but ended up with a net debt position at c.€15m, presumably as a result of the recent purchases (WO&WO, Vitro and Tapkey).
SFPI is small, suffers the various curses of being a listed small cap and has a comparatively legally complex set-up which makes it look like a small industrial conglomerate. To its credit however, it is very transparent about how well the operational units are doing.
