Movinn announced on September 21st, that the company launches a third Swedish market in the city of Ludvika. To begin with, there will be a soft launch of five units, which are expected to be launched on the 15th of October. Subsequently, it will be possible for Movinn to expand with additional units depending on the market reception. Ludvika is an important market due to the current limited supply of corporate housing and its high demand.
“Ludvika is a smaller city with about 15,000 citizens with a strong corporate history. The largest employer in the area is the Japanese multinational electronics company Hitachi who has 2,700 employees in Ludvika with a large portion of foreign workers, which is thought to be one of the reasons for the shortage in corporate housing in the city. The fact that Movinn is doing a soft launch of fewer units is expected to limit the vacancy rates and enable the company to continuously assess the market and only add new units based on demand. Moreover, Movinn will be able to manage the units from the subsidiary Movinn Sverige’s base in Stockholm, which, in combination with the company’s PropTech systems that automates several processes including bookings, rental contracts and customers getting access to the apartments, will ease the management of the new units.
We also would like to highlight a quote from the Managing Director in Movinn Sverige who says ‘We are also showing the strategically important clients that when they call, Movinn answers’. This indicates, according to Analyst Group, that one of Movinn’s larger clients has required corporate housing in Ludvika, which suggests that demand is currently higher than supply, something that is expected to lead to low vacancy rates as well as building a good relationship with a strategically important client”, says the analyst at Analyst Group covering Movinn.
How Analyst Group sees Movinn as an investment
During H1-23, Movinn delivered revenues relatively in line with our expectations but with higher costs than estimated, as a result of lower demand leading to higher vacancy rates. The macroeconomic headwinds that have contributed to this outcome are anticipated to persist to some extent throughout 2023, gradually subsiding thereafter in 2024, which is estimated to result in an improved profitability thereafter. With an estimated EBITDA of DKK 10.4m in 2024, an applied target multiple of EV/EBITDA 15x, and a discount rate of 11.4%, a net present potential value per share of DKK 7.5 (10.2) is derived in a Base scenario.