Intrinsic Value Alligo AB (publ) (0RTK.L)

• Previous Close: £127.80
• Intrinsic Value: £43.76
• Upside potential: -66%

Stock Valuation Context

Business Model And Market Position

Alligo AB operates as a Nordic distributor of workwear, personal protective equipment (PPE), and industrial tools, serving a diverse clientele including SMEs, large enterprises, and public sector entities. The company’s revenue model hinges on B2B sales across key industries such as manufacturing, construction, and logistics, supplemented by value-added services like maintenance and spare parts distribution. Its broad product portfolio and regional focus position it as a one-stop solution for industrial and safety equipment needs. Alligo’s market position is reinforced by its ability to cater to niche segments such as oil and gas, agriculture, and fisheries, where specialized safety and tooling requirements are critical. The 2021 rebranding from Momentum Group to Alligo reflects a strategic emphasis on consolidating its identity as a unified industrial supplier. Despite operating in a competitive distribution landscape, the company differentiates itself through service integration and sector-specific expertise, ensuring steady demand from its core markets.

Revenue Profitability And Efficiency

Alligo reported revenue of SEK 9.21 billion for FY 2022, with net income of SEK 481 million, translating to a diluted EPS of SEK 9.53. Operating cash flow stood at SEK 507 million, while capital expenditures were SEK -146 million, indicating disciplined reinvestment. The company’s profitability metrics suggest efficient cost management, though further margin analysis would require segment-level data.

Earnings Power And Capital Efficiency

The company’s earnings power is underscored by its ability to generate consistent operating cash flow relative to its capital base. With a net income margin of approximately 5.2%, Alligo demonstrates moderate capital efficiency, though its leverage (total debt of SEK 2.76 billion against cash of SEK 215 million) warrants monitoring for interest coverage and refinancing risks.

Balance Sheet And Financial Health

Alligo’s balance sheet shows total debt of SEK 2.76 billion against cash reserves of SEK 215 million, implying a leveraged but manageable position. The debt-to-equity ratio is not disclosed, but the company’s ability to service obligations is supported by stable operating cash flows. Further liquidity metrics would be needed to assess short-term resilience.

Growth Trends And Dividend Policy

Alligo’s growth is tied to industrial activity in the Nordic region, with potential upside from cross-selling and service expansion. The company paid a dividend of SEK 2 per share in FY 2022, reflecting a payout ratio of roughly 21%, balancing shareholder returns with reinvestment needs. Historical revenue trends are unavailable, limiting trend analysis.

Valuation And Market Expectations

With a market cap of SEK 5.68 billion and a beta of 1.13, Alligo trades with moderate volatility, likely reflecting its industrial cyclicality. The P/E ratio (based on diluted EPS) is approximately 11.8x, suggesting market expectations align with sector peers. Investor sentiment may hinge on Nordic industrial demand and the company’s ability to sustain margins.

Strategic Advantages And Outlook

Alligo’s strategic advantages include its diversified customer base, integrated service offerings, and regional specialization. The outlook depends on industrial sector resilience and the company’s ability to navigate supply chain and cost pressures. Long-term success may hinge on digital transformation and expanding high-margin services.

Sources

Company description, financials, and market data provided by external API; additional context inferred from public filings and sector reports.