DEME goes public on 30 June

19 mei 2022

07:45

The split of CFE into DEME and CFE, announced in December, is on track. Shareholders must give their blessing on June 29. The separate listing will follow a day later.

The Brussels construction group CFE

which is 62.1 percent owned by Ackermans & van Haaren

not only publishes a trading update for the first quarter, but also provides a separate press release about the status of the planned split-off of the dredging company and wind farm builder DEME.

The proposal to split CFE into two separate entities was launched on December 2nd† Because DEME Group (the official name, ed.) and CFE are active in different sectors and in different geographic markets, each with their own management and strategic priorities, the partial demerger will allow the two companies to further develop their activities and to grow as two solid listed companies with their own management,” the press release reads. From an investor’s point of view, the underlying idea is that the value of DEME will emerge better with a separate stock exchange listing.

From an investor’s point of view, the underlying idea is that the value of DEME will emerge better with a separate stock exchange listing.

DEME wants to expand its geographic footprint ‘through targeted expansion strategies’, both for the dredging activities and for the installation of offshore wind farms. CFE wants to strengthen itself ‘as a leading multidisciplinary group’ – real estate development, construction and renovation, multitechnics – ‘in attractive growth markets’.

Extraordinary general meeting

The board of directors of CFE unanimously approved the demerger proposal on 16 May. It is now up to the shareholders to have their say. This will take place at an extraordinary general meeting scheduled for 29 June. A three-quarter majority is required for approval.

That doesn’t seem to be a big problem. The shareholders of CFE, Ackermans & van Haaren (62.1%) and Vinci (12.1%), will vote in favor of the partial demerger, says CFE. That means that barely 0.8 percent of the remaining shareholders have to vote in favour.

As a result of the approval, the shareholders of CFE will receive as many shares of DEME Group as they own shares of CFE. The split will be retroactive to April 1, but that’s for tax and accounting reasons only. DEME’s first separate listing is scheduled for June 30.

DEME expects slightly lower profit

Dredger and wind farm builder DEME had a strong first quarter in which turnover grew by 28.6 percent, according to a trading update from parent company CFE. The dredging activity in particular was on the rise with projects in Africa, Asia and Europe. The Offshore Energy branch is mainly working on projects in France and Germany, but the projects in the US and Taiwan are in full preparation. DEME’s order book remained almost stable (-1.3%) at a high level.

The conflict in Ukraine has no significant direct impact on DEME. The company does expect net profit this year to see ‘a limited decline’. Turnover would remain more or less stable.

The construction activities – CFE refers to ‘continuing activities’ – achieved limited turnover growth (+3.9%) in the first three months of the year. The order book increased by 4 percent. The Russian invasion of Ukraine is having an impact. The conflict causes higher material prices and disrupts the supply chain. That will weigh on CFE’s profit. It therefore predicts a lower profit than in 2021.

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