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Lehto Group is planning an initial public offering and listing on the official list of Nasdaq Helsinki
29 March 2016
Lehto Group Plc ("Lehto Group" or "Company") is planning an Initial Public Offering ("IPO") on the official list of Nasdaq Helsinki Ltd ("Nasdaq Helsinki"). Lehto Group is a Finnish construction and real estate group focusing on economically driven construction.
The Company believes that the contemplated listing on Nasdaq Helsinki is a logical milestone in the Company's determined growth and development. The aim of the listing would be to enable especially the successful implementation of the Company's strategy and the financing of growth. To support this, the Company would also aim to raise new equity through a share issue. Moreover, the listing would expectedly improve the general awareness and credibility of Lehto Group among its present and new customers, partners and investors. The listing would also expectedly give the Company a better opportunity to use its own shares to finance business acquisitions supportive to its strategy.
Lehto Group is a Finnish construction and real estate company focusing on economically driven construction.
The Company's main field of operations is construction contracting. In addition, Lehto Group manufactures prefabricated building elements and modules mainly for its own use and carries out property development. The Company's mission is to be the innovator of the construction sector.
The Company has divided its operations into four service areas:
Lehto Group currently operates in Finland and is geographically focused on growth centres which represent a significant part of construction volume. Business premises and social care and educational premises are provided by the Company nationwide. In housing construction the main focus is the Helsinki Metropolitan area and selected regional growth centres. In the building renovation, operations are focused on the Helsinki Metropolitan area and Uusimaa region, however, building redevelopment projects can selectively be carried out also in other parts of Finland. The Company's headquarters are located in Kempele and the Group has ten offices in Finland and a subsidiary in Sweden. The Company operates four own production facilities, of which the existing production at Merijärvi, Oulainen and Oulu are intended to be combined during the year 2016 into the larger manufacturing plant being built in Oulainen. The number of personnel at the end of the financial year 2015 was 423.
The Company believes that its economically driven construction operating model provides a competitive advantage. The cornerstones of economically driven construction are:
In the economically driven construction operating model, the Company generates construction projects mainly through its own project development and sales organisation. The benefits of economically driven construction operating model can be maximised when the Company is able to lead the project from planning to implementation. The utilization of cost-efficient solutions is supported by the active planning management, which also aims to ensure that the construction projects correspond to the financial targets of the customers. For its customers the Company aims to offer a straightforward process. The Company approaches its customers with easy-to-buy and pre-designed concept models segmented by customers. On the basis of the concept models, the Company can without delay offer its customers a fast delivered and comprehensive package for decision making, guiding the customer to economically beneficial solutions, a more rapid planning and a more straightforward process. Furthermore, the Company capitalizes on the construction innovations it has developed and, based on these, the modules and elements produced in its own production facilities to partially transfer traditional work stages from the construction site to the automated factory. By capitalizing on proprietary innovations, standardized solutions and procedures, as well as through continual development of operations and concepts, the Company aims to decrease the complexity of the construction site in order to achieve more efficiency with better quality. Entrepreneurial management and rapid decision-making is also a cornerstone of the operating model.
The Company's net sales grew 56 per cent on average per annum in 2013-2015, while the Company's operating profit margin increased from 8.1 per cent in 2013 to 9.9 per cent in the financial year 2015. In the financial year 2015 (comparative financial year 2014 figures in parentheses) the Company's net sales grew to EUR 275.6 (171.1) million and operating profit was EUR 27.2 (5.8) million corresponding to 9.9 (3.4) per cent of net sales.
In the strategy period 2016-2020, the Company's strategic focus areas are the further development of the economically driven construction operating model to maintain the competitive advantage, product development supporting the production and continuing development of operations, exploration of innovative co-operation models in construction, and launching the Company's internationalisation. The Company aims to achieve profitable growth in its all service areas and will continue to strive to maintain its strong financial position.
The Company's ability to reach its financial targets depends on many risks and uncertainties. There is no certainty regarding whether the Company will be able to reach its financial targets or maintain such financial targets, should they be reached, or follow its dividend policy as planned.
The IPO arranged in connection with the contemplated listing is expected to comprise primarily of newly issued Company shares complemented by the sale of secondary shares. Shares would be offered to private individuals in Finland and to institutional investors in Finland and internationally as well as to the personnel of the Company. The existing shareholders and the persons participating in the personnel offering would commit to the customary lock-up arrangements in connection with the listing.
Pohjola Bank plc would act as the Global Coordinator and Joint Bookrunner in the contemplated offering and Pareto Securities Oy as Joint Bookrunner. Krogerus Attorneys Ltd would act as the legal advisor of the Company.
Hannu Lehto, Managing Director, Lehto Group Plc, tel. +358 50 028 0448
Veli-Pekka Paloranta, CFO, Lehto Group Plc, tel. +358 400 944 074
This announcement is not for publication or distribution, directly or indirectly, in Australia, Canada, Hong Kong, Japan, Singapore, South Africa or the United States, or any other jurisdiction in which release or distribution would be unlawful. The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.
The information contained herein shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of any such jurisdiction. Investors must neither accept any offer for, nor acquire, any securities to which this document refers, unless they do so on the basis of the information contained in the applicable prospectus published by the Company.
These written materials do not constitute an offer for sale of securities in the United States, nor may the securities be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder. The securities will not be registered under the U.S. Securities Act of 1933, as amended, and there will be no public offering of the securities in the United States.
The Company has not authorised any offer to the public of securities in any member state of the European Economic Area other than Finland. With respect to each member state of the European Economic Area other than Finland which has implemented the Prospectus Directive (each, a "Relevant Member State"), no action has been undertaken or will be undertaken to make an offer to the public of securities requiring publication of a prospectus in any Relevant Member State. As a result, the securities may only be offered in Relevant Member States (a) to any legal entity which is a qualified investor as defined in the Prospectus Directive; or (b) in any other circumstances falling within Article 3(2) of the Prospectus Directive. For the purposes of this paragraph, the expression "an offer of securities to the public" means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to exercise, purchase or subscribe for the securities, as the same may be varied by any measure implementing the Prospectus Directive in that Relevant Member State, and the expression "Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.
The information contained herein shall not constitute a public offering of shares in the United Kingdom. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as "relevant persons"). Any investment activity to which this document relates will be only available to, and will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
This document includes "forward-looking statements" that involve risks, uncertainties and other factors, many of which are outside of the Company's control and could cause actual results to differ materially from the results discussed in the forward-looking statements. Forward-looking statements include statements concerning the Company's dividend policy, financial targets, plans, objectives, goals, future events, performance and/or other information that is not historical information. The Company undertakes no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstances after the date made, except as required by law.
Pohjola Bank plc and Pareto Securities Oy (together, the "Managers") are acting exclusively for the Company in connection with the contemplated listing. The Managers will not regard any other person as their respective client in relation to the listing and will not be responsible to anyone other than the Company for giving advice in relation to the listing or transactions related thereto.
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