| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 24.50 | 3082 |
| Intrinsic value (DCF) | 0.30 | -61 |
| Graham-Dodd Method | 1.00 | 30 |
| Graham Formula | 0.40 | -48 |
Belysse Group NV (LSE: 0RQK.L) is a leading European manufacturer and distributor of textile floor coverings, serving residential and commercial markets globally. Headquartered in Sint-Baafs-Vijve, Belgium, the company operates through two key segments: Residential PA (broadloom carpets and tiles under Balta Broadloom and ITC brands) and Commercial (modular carpet tiles for offices and public spaces under modulyss and Bentley, plus hospitality-focused broadloom via arc edition). With a heritage dating back to 1964, Belysse combines design innovation with manufacturing expertise, supplying major retailers, wholesalers, architects, and contractors. The company’s multi-brand strategy targets diverse price points and applications, from mass-market residential to premium contract projects. As sustainability gains importance in flooring, Belysse’s European production base positions it to meet tightening environmental standards. The €280M-revenue firm serves cyclical construction and renovation markets, with exposure to both consumer spending (residential) and corporate capex (commercial).
Belysse Group offers exposure to the cyclical flooring market with a mixed risk/reward profile. Positives include its established European manufacturing footprint, diversified brand portfolio, and €38.6M cash position against €166M debt. The stock’s beta of 1.25 reflects sensitivity to economic cycles. While 2023 net income of €10.6M (EPS €0.29) shows profitability, investors should note zero dividends and high debt/equity levels. The commercial segment (45% of revenue) may benefit from office refurbishment trends post-pandemic, but residential demand could soften with consumer spending pressures. Operating cash flow (€18.5M) covers capex (€10.2M), but leverage may limit growth investments. Valuation at ~€19M market cap appears discounted versus peers, possibly reflecting Belgium’s less liquid small-cap market.
Belysse competes in the fragmented €12B+ European flooring market by combining vertical integration (in-house tufting, coating, and finishing) with design-led branding. Its key advantage lies in specialized commercial flooring – modulyss and Bentley target high-margin contract projects with durability and acoustic performance claims, while arc edition serves luxury hotels. However, scale disadvantages versus global giants like Mohawk limit R&D budgets and geographic reach. In residential, Balta Broadloom competes on cost-efficient Belgian production but faces pressure from Asian imports. The company’s ‘local-for-local’ European manufacturing (Belgium, Slovakia) provides sustainability credentials increasingly valued by EU clients, though this comes with higher labor costs. Unlike US competitors who benefit from housing market scale, Belysse’s revenue is more exposed to European renovation cycles. Its lack of hard surface flooring (e.g., LVT) leaves it underrepresented in the fastest-growing flooring category. Distribution through wholesalers rather than direct retail relationships creates margin compression risks.