Gabriel’s Q1’24-25 results reflected relative stability during a moment of heightened uncertainty. A stable revenue of MDKK 228.1 (MDKK 227.7 Q1’23-24) was slightly below our expectations of +1% growth y/y as positive development in continuing operations was offset by a decline in FurnMaster driven by the restructuring of its Mexican subsidiary. Q1 was the first step towards greater stability, however, uncertainty relating to the carve-out process of FurnMaster remains high, and the range of outcomes is broader than normal. Group EBIT of MDKK 0.3 in Q1’24-25 was below our estimate of MDKK 4.6, impacted by elevated costs relating to restructuring, accounts verification, and carve-out advisory fees. The Q1 results support our view of long-term potential in the company, however, also reinforce our view of greater short-term risk due to the FurnMaster carve-out process. We reiterate our Reduce recommendation with a slightly revised price target of DKK 180 per share from DKK 195 previously.

We estimate a small positive topline growth year-on-year in Q1’24-25 as the stable to slightly improving market backdrop with lower interest rates and inflation, can support a slight positive development in the group despite challenges.

Gabriel delivered its annual report FY’2023/24 following a delay to the report in November due to accounting irregularities in a Mexican subsidiary of the discontinuing FurnMaster business unit. Despite topline growth of 6.4% y/y and EBIT margin improvement in the continuing operations, ongoing challenging market conditions and short-term uncertainty relating to the discontinuing operations and carve-out process lead to near-term elevated risk in the case. See HCA’s analyst Philip Coombes’ thoughts on the results. Report: https://www.inderes.dk/research/gabriel-holding-fy202324-waiting-for-the-carve-out-to-unlock-value Disclaimer: HC Andersen Capital receives payment from Gabriel for a Digital IR agreement and research services. / Philip Coombes 14:35, 13/01/2025.

Following a delay in the publication of its 2023/24 annual report due to financial reporting challenges at its Mexican subsidiary, Gabriel’s FY’2023/24 results have been published. Group revenue was MDKK 912, within the guidance range of MDKK 880-930 and slightly below our estimate of DKKM 915. Operating profit (EBIT) was MDKK 10.9, also within the guidance range of DKK 8-15m and slightly below our estimate of DKK 12m. Despite solid topline growth in the continuing operations of 6.4% y/y, ongoing challenging market conditions and short-term uncertainty relating to the sale of its FurnMaster unit, lead us to reiterate our Reduce recommendation with a lower target price of DKK 195 (prev. DKK 225) per share following the restated numbers and updated FY’2024/25 estimates. Long-term potential remains, particularly as markets normalize, and as the carve-out of the FurnMaster business returns Gabriel’s focus back to its continued operations with a stronger balance sheet.

On Thursday, Gabriel announced that it is postponing its FY’23/24 financial reporting from 20 November 2024 to a date in 2025 (TBC by 8 January 2025 at the latest) due to financial reporting challenges in the Group’s Mexican subsidiary, including a key employee resignation and uncertainty surrounding the subsidiary’s inventories. Gabriel’s annual general meeting will be held on 29 January 2025. Gabriel also maintained its full-year expectations for the 23/24 financial year, against our expectations of an upgrade. The company also announced its new guidance for 24/25 on its ongoing operations, with the management still expecting challenging market conditions. We see a high degree of short-term uncertainty before the FY’23/24 report and more news about the FurnMaster business unit is announced. Based on the news, there is some downward pressure on our previous estimates and valuation, and we will update our estimates, target price, and recommendation for Gabriel in the coming days. 

Gabriel Holding (Gabriel) will report its Q3 2023/24 report on Thursday, 29th August. The company has faced challenging markets in recent years as higher interest rates have reduced real estate activity in both commercial and residential sectors. However, in recent quarters, we have seen an improving rate of change in Gabriel’s revenue development - we expect to see this continue.

Gabriel announced this morning that the company is initiating a carve-out of its FurnMaster business area, which holds a strong position in the furniture production market in Europe and the US. Gabriel no longer considers this business area to be within the company's growth strategic definition.

We are pleased to share our extensive research report on Gabriel, a prominent player in the global furniture fabrics industry. Watch our detailed video to gain insights into the current market dynamics, competitive landscape, risks, and valuation of Gabriel.

Gabriel is a niche company within the global furniture industry, which throughout the value chain develops, manufactures, and sells furniture fabrics, components, upholstered surfaces, and related products and services.