Adminster - Growth on hold pending Sarastia
Administer reports Q4 figures on March 4. We expect net sales to have declined slightly in the challenging market, while EBITDA should improve supported by previously implemented cost-saving measures. For 2026, much will depend on Sarastia.
Organic growth remains limited
We forecast Q4 net sales to have declined ~2% as subdued market conditions have continued to weigh on customer activity. Among business areas, we expect staffing specialist Econia to have remained under pressure in Q4 and forecast a sales decline of 7%. However, Employment Industry Finland data suggests the personnel leasing sector’s declines are moderating, and our outlook for Econia is slightly more optimistic for this year. For Administer’s accounting firm business we estimate flat sales in Q4 supported by smaller acquisitions, while we forecast minor sales declines for payroll and HR services provider Silta and software unit EmCe. Our FY 2025 net sales estimate of EUR 73.7m sits slightly below guidance mid-range (EUR 72-78m). For 2026, the now regulatory-approved Sarastia acquisitions, set to complete in April, will drive material top-line growth, estimated to increase group sales by ~80% on an annual basis.
Cost savings to support Q4 margins
We estimate modest profitability improvement with Q4 EBITDA of EUR 1.1m (Q4'24: EUR 0.9m), bringing FY’25 EBITDA to EUR 5.4m (7.3% margin) slightly above the lower end of the 7–10% guidance range. The expected improvement reflects cost-saving measures implemented in Q2-Q3 through workforce optimization and fixed cost reductions. These savings should continue supporting margins this year, though the impact is expected to be modest. However, the real driver for 2026 is the integration of Sarastia, which will materially reshape both the revenue and profitability profile once the business transfer completes. While the acquisition remains a potential value driver, execution risks persist around integration, customer retention, and margin improvement (2025E EBITDA margin ~2% for the acquired entity). We expect no FY’25 dividend given the transaction and constrained balance sheet position.
ACCUMULATE with a TP of EUR 2.5 (prev. EUR 2.7)
We keep our ACCUMULATE rating but lower our TP to EUR 2.5 (prev. EUR 2.7), primarily reflecting valuation multiple compression across the peer group. Administer is currently trading at 12–9x adj. P/E based on our 2026–27E estimates, which we view as slightly undemanding. However, the valuation picture is set to change once updated guidance including Sarastia is provided.