Andreadis (AS Company): New acquisitions, Romania and the attractive stock

The first half of 2024 may not have been so satisfactory for the AS Company, as consumer fatigue and high inflation led to lower turnover by 3.2% (11.5 million euros from 11.9 million euros) and lower net profit by 8.3% (1.5 million euros versus 1.6 million euros), but the best seems to be yet to come for the listed company of Efstratios Andreadis, who has been active in the toy market since 1990, offering many smiles to children.

Despite the challenges and stagnation of the first months of the year, Andreadis has not lost his optimism for the future, betting on significant organic growth both in Greece and Romania, where in collaboration with Jumbo he sees higher profits based on the consistently high growth rates.
Apart from the promising Balkan country, the company is expanding in the area of baby goods, with the acquisition of Chicco, Boppy, Bebe Comfort and Safety First brands expected to start having a positive impact as of the second half of the year. This is expected to lead to a +5% improvement in 12-month profitability.

New acquisition

As the president and main shareholder has suggested, it is possible that there will be a new acquisition in the coming months, while due to the low birth rate in Greece and Europe, attention has also started to focus on adult games.
All the above moves by Efstratios Andreadis are aimed on the one hand at further improving the profit margin, through the availability of products with higher added value, and on the other hand at boosting the turnover to 50 million euros over a 5-year period (28.7 million euros in 2023) .
At the same time, the management continues to diversify the portfolio, with investments in tourist properties, mainly in Crete. And all this, while the listed company has zero bank borrowing, high cash flows and satisfactory dividend yields (>4%).

Attractiveness of the stock

The optimistic prospects for the company of Andreadis, who was the first to bring the legendary Power Rangers to Greece, are  reflected in the Athens Stock Exchange. The stock has soared 15% in 9 months, 23% in 12 months, while it is down 10% from 17-year highs of 3.1 euros.
In fact, the current valuation of 36 million euros is considered quite “cheap”, given that the P/E ratio stands at 8x and the P/BV ratio falls short of 1x.

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