Monday 3 February 2014

Deutsche Beteiligungs annual report 2013

DBAG, Annual, report, 2013

My only investment company DBAG came out with their annual report for 2013. I seem to have dropped the boll a little here because I had missed two things: 1. Is that DBAG is running a broken year which ends in October and 2. I thought what came out last week would be the preliminary results so I was poorly prepared for receiving a massive annual report that had to be read. The market had no response to it which is good news in my eyes.

The report from which all the information has been extracted can be found here.

The year was good to DBAG and they found several new companies that they could step into with either MBO (= management buy out) or stepping in with expansion money for a company with a good product.

They also sold off one of their investment which liberated some money and then also meant that they can keep their standard dividend of 40 cents per share and give an "extra" dividend of 80 cents per share. This they have done the last couple of years which I like since I enjoy to get dividend.

Below is the table extracted from the report. As can be seen the year was definitely not as profitable as 2012 but with this type of investment company there is no chance to have a stable revenue flow. unfortunately the "Other Operating Income" which is to a large extent being generated by that the employees in DBAG are helping out Funds in their investment decision and it would be nice if that service would grow since that can lead to a much more homogenous revenue flow than buying and selling companies and already today it is generating a very nice amount of money.

I also liked a comment that they wrote that most of their current investments (over 40% in value and in numbers nine of their companies) are very young investments, only around two years, which means that their value has not yet matured and are therefore also not providing a large yield. That statement gave me a little comfort in my own investments since most of them are less than two years old. it will however also mean that soon they will have no companies to sell of to give that extra dividend especially since their investment time is four to seven years. (Walter Schloss kept an average of a bit more than four years if I remember correctly).

Two weeks ago I went to Spandau to take a closer look at the surroundings there and then in the city centre, at the prime location I saw the entire floor of nice building being occupied by something called Schülerhilfe (=school help). Today many parents in Germany are worried about that their children are not getting a good enough education and they are prepared to pay a lot of money for extra hours somewhere (poor kids! I am sure most of them are intelligent enough and would do just fine even without these desperate measures from their parents). Still, I was impressed that they had occupied such a large part spot on in the city centre and I wanted to take a closer look at that company, who owned it and if it was doing well... how to invest in it. I then forgot about it but to my enjoyment I discovered in the annual report from DBAG that they had made an MBO of Schülerhilfe in October 2013 so... lucky me... I already own part of it!

Conclusion: I found it great that they have managed to find so many new objects to invest in and I definitely hope that all of them will turn out well. I also very much enjoyed reading about their new investments where they brought up three of them more in details in this annual report. I see in the future that the dividend might potentially decrease in the sense of skipping the "extra" dividend but that matters little to me. I am in it for the long run.

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