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Tourism is Italy’s “gold” and according to the Intesa Sanpaolo SRM Research Center, by 2024 the sector should grow from 3.6% to 4.6% in terms of tourist numbers (mainly driven by international tourism), GDP reached 104.5 billion, exceeding the pre-epidemic level for the first time. At this point we wonder why Emma Villas, a Tuscan company active in the field of tourist rental of villas and luxury homes in Italy, has so far traded below €3.30 per share, the IPO price on Euronext Growth Milan, where the company debuted on September 27, 2023.
It should also be taken into account that, due to the type of services offered (aimed at satisfying a high-end tourist group, mainly from outside Europe), Villa Emma should not be affected by the current phenomenon of “overtourism” (i.e. tourists who are dissatisfied and go to places with too many people and therefore a lower quality of vacation).
Impact of tourism
Indeed, the answer to the stock performance question almost certainly lies in the simplest motivation for Euronext Milan’s growth company, namely a very low free float, which in this case is equal to 13.91% of the share capital.
Then there is the seasonal factor: Emma Villas will publish its results for the first half of 2024 on September 30, but for obvious reasons these figures will only partially include results from the “peak” period of tourism in Italy, that is, from June to August. According to the latest data from Fipe-Confcommercio, total tourism expenditure is expected to reach 62 billion, with more than 84 million tourists expected in August and 24 billion in tourism expenditure. Summer trips account for 45% of the annual total, and overnight stays for 61%. All driven by foreign tourism, which is expected to grow by 4% (domestic tourism -0.8%). CNA Turismo e Commercio estimates that in August alone, expenditures by inbound foreign tourists (mainly from the United States, Brazil, Canada, Australia, Japan, China and South Korea) amounted to 6.5 billion, including 39 million overnight stays.
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Meanwhile, Emma Villas ends 2023, its first financial year as a public company (but, as mentioned, still largely a private company), with revenues up 14.6% to 32.5m (only 15% of which refers to Italian customers), EBITDA jumped 47% to 1.9 million, EBIT almost doubled (+91.2% to 1.26 million), and net profit also increased from 168,000 to 937,000 euros, thanks to a net financial income of 55,000 euros (net expenses in 2022 were 183,000 euros) and a rise in tax liability from 64.9% to 28.9%.
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