Loomis ABÂ (OSTO:LOOM B) (LOIMF, Financial) (LOIMY, Financial) is a Swedish company that transports and handles cash. The company has been growing and the stock trades at a reasonable price.
The company has 71.85 million shares, the stock trades for 326.4 krona ($37.53), and the market cap is 23.451 billion krona. It takes 8.72 krona to buy one dollar. Earnings per share are 17.4 krona and the price-earnings (P/E) ratio is 18.75. The dividend is 8 krona, and the dividend yield is 2.45%. Seems like a pretty decent valuation.
Growth has been outstanding. Sales have grown from 11.36 billion krona in 2012 to 16.8 billion krona. Earnings per share have grown from 17.2 krona to 33.46 over this time frame. All the while, shares outstanding have not grown. Return on equity was 20.14% and operating margins were 10% last year. Trailing 12 months free cash flow is 1.75 billion krona and the free cash flow yield is 7.4%. You can see that Loomis is quite profitable.
Loomis, of the U.S., merged with Swedish Securitas in 2008 and kept the Loomis name. What made Wells Fargo (WFC, Financial) famous, its stagecoach carrying cash and gold, is not part of this Swedish company.
Cash transit accounts for 62% of sales, cash management 31% and international 7%. Loomis owns 6,700 armored trucks. Its 200 cash service centers gather, count and store money from ATMs, restaurants and other businesses. The international division handles items such as gold, foreign currencies and art. Its Safepoint product grew 23% in 2016 and accounted for 11% of revenues in the U.S. Europe accounts for 50% of revenues and the U.S. 43%.
The Safepoint product appears to offer the most growth. Safepoint is a digitized safe deposit box. Banks want to get out of the cash and check handling business and focus on what makes them money – lending. Safepoint allows merchants automatic deposits on their cash. Loomis installed 19,000 last year in the U.S. In 2015, the company installed 14,600. Loomis comes to pick up the cash when it reaches a certain level. That way, the company is not making useless trips.
Here’s the unfortunate thing that I thought I’d see in the research –Â dual share structures. There are 3.4 million A shares that receive 10 votes at the Annual Meeting. The B shares, what are publicly traded, only receive one vote. Many Scandinavian companies are like this –Â the founders receive a disproportionate vote. Latour Förvaltning AB, and Melker Schörling AB, controll a combined 32.3% (41.4%) of the votes and 4.6% (17.4%) of the capital. I found out about Loomis while perusing The Pear Tree Polaris Foreign Value Fund. The fund has some very esoteric ideas.
The balance sheet shows 110 million krona in cash and 572 million in receivables. The liability side shows 5.344 billion krona in loans and debt. Loomis is a little high on the debt side.
I’m impressed with Loomis. We might even buy a few shares once we look at the company a little more. It seems to be in a growth industry as bands want to stop physically handling money and checks. There is not a lot of information in the U.S. so it will take some digging.
Disclosure: We do not own shares.
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