Aquila SA provides alarm intervention services in France. The company also offers security round, monitoring, and security guard services. It operates through a network of 300 security companies. The company was founded in 1993 and is based in Avignon, France.

France

Aquila S.A.

Consumer Cyclical

The company pays dividends most of the time. It has paid dividends in almost every one of the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been outstanding and can be rated excellent compared to its peers. At the same time, the average five-year yield has been significantly higher and exceeded nearly all its peers. On average, the company pays dividends annually. 

ALAQU.PA reported revenue of EUR 30mn in the last 12 months, down 3% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 100% from FY23 to EUR 0.00.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 36ppts over past six months and grown 15ppts slower in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

Historically, ALAQU.PA has reported weak net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 2.1%, down from 2.1% in FY23. 

Aquila S.A. reported a return on equity (RoE) of 17.1% in the last 12 months, down from 18.0% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 6.4% in the last 12 months, an increase from 6.3% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to 16.6%, above the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 3.1 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

ALAQU.PA has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is unstable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, robust profitability, solid return on capital, strong debt servicing capacity, adequate interest coverage, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, excessive margin volatility, and poor cash flow generation.

In highly turbulent market conditions, ALAQU.PA is volatile. In other words, the stock will fall much more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be large. 

In normal market circumstances, ALAQU.PA is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from significant to immense. 

Based on key historical and expected multiples, the stock is undervalued relative to its peers. In particular, the stock is reasonably priced on P/E, 'cheap' on EV/EBITD. 

Aquila S.A.

€ 3.72

4

Aquila S.A.

€ 3.72

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

€ 3.72

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