Recent Developments in the Construction Sector in Crete
Until just a few months ago, the Structural Crete company, led by the experienced Dimitris Koutras, was a notable player in the Greek stock market, showcasing impressive returns. For decades, Koutras has made a significant impact on the local construction industry. Back in May, for instance, the company’s valuation peaked at 77 million euros, marking the highest levels seen in the past 20 to 25 years.
However, since then, the company has experienced a sharp decline of approximately 34%. The key shareholder and the president of the listed company is now seeing the valuation reduced to nearly 50 million euros. This decline signifies that the stock has lost a substantial portion of its upward trajectory since last September, when Koutras officially took over the company’s shares and management.
The Pricey Valuation
This downturn may be linked to the realization that, despite a noticeable increase in the backlog of projects (34 million euros) and a clear improvement in financial metrics (with a revenue increase of 69% in 2023), the previous valuation of 77 million euros was quite steep. Even now, in light of the recent 34% drop over the last quarter, the price-to-earnings (P/E) ratio remains close to 30x, and the price-to-book value (P/BV) ratio consistently exceeds 4x.
The Market’s Reaction
Despite these challenges, there are signs of recovery in certain stocks, with some rebounding by nearly 5%. The strategic moves by Dimitris Koutras, including plans to acquire a class 7 contractor license, aim to expand the range of projects the company can bid for, broaden its geographical reach, and penetrate the energy and real estate sectors. These initiatives could potentially rejuvenate the company’s narrative and subsequently boost investor interest.
Future Prospects
Koutras, who holds a 29% stake in the company and is well-known in the construction market from his long tenure at Ellaktor and Intrakat, is expected to reveal more about his plans during the upcoming annual general meeting in September. This meeting will provide insights into his future intentions in collaboration with the other main shareholder and company founder, the Synatsaki family.
Note: The above content is based on journalistic research and should not be considered as advice for buying, selling, or holding any stock.
