Barker Holding Aps

Management's review

Financial reviewThe group's income statement for the year ended 31 December 2022 shows a profit before tax of DKK 159 million, and the balance sheet on 31 December 2022 shows equity of DKK 683 million.Development in yearRevenue for the year amounted to DKK 780 million compared to DKK 711 million last year. Profit after tax was DKK 115 million compared to DKK 110 million last year.The development must be compared with the fact that in the annual report for 2022, the Group expected an increase in revenue of 10%, based on our expectations of the uncertainty that the CV-19 pandemic as well as the challenges in the supply chains could cause. The Group managed to achieve the expected revenue increase 2022. The Group's rental income increased as expected and we experienced satisfactory growth within all the Group's focus brands.Management considers this year's result satisfactory.At the beginning of 2022, there was still great uncertainty about the corona pandemic, but as more countries removed the restrictions, it led to many infections in the spring. Management still had a strong focus on protecting employees, and working from home was used to minimize the risk of infection. During the Spring, employees returned to the offices. Today, work from home is considered a natural part of everyday life, and management encourages its use, provided, however, that it is organized in a way that does not lead to disruptions of the daily operations.As an international group, management still considers it necessary for business travel to be carried out. However, management encourages that travel is carried out only if it is extremely necessary. This has resulted in fewer business trips, as the use of the digital solutions is still high even though the employees have returned to the offices.In 2021, TITAN added more resources to the ISO project organization, which has worked purposefully with implementations and ensuring that the organization was ready to achieve ISO certification. TITAN achieved global multi-site ISO certification within 9001 and 14001 in June 2022. We believe that an ISO certification adapted to the specific conditions of TITAN is paramount. It is a project that aims to provide real long-term benefits for all stakeholders and for TITAN. It must never threaten the real objectives or the existing well-functioning processes that have resulted in the constant growth and shareholder, customer, and supplier satisfaction.The shortages of containers and shipping capacity continued in 2022 leading to significant higher transporting cost which main driver was higher fuel costs. TITAN was affected heavily by higher transport costs because of the need for moving boxes to the markets where they were needed. The high freights continued until March 2022 where they started decreasing very fast during summer and fall due to insufficient cargo to fill the ships on major routes. By end of 2022 the freight rates were only 1/5 of the rates from the beginning of 2022.The massive shortage of containers gave rise to massive increases of the price for new and used containers. The high prices of the containers continued for a long time in 2022, but in the second half of 2022 prices began to fall. Prices reached a more normal level in late 2022 and early 2023.The war in Ukraine did not cause any losses to the TITAN Group, as the group had no activities in Russia or Ukraine. The aftermath of the war, such as higher energy prices, higher inflation, and supply chain disruptions, was felt in higher transport prices. We also faced challenges with getting available trucking services in some markets.Further, the Group benefitted from the globally higher container values and margins when selling containers but during the end of 2022 and beginning of 2023 the margins fallen to lower levels because of over-full depots in Europe.FinancingThe Groups loans with the main banks were re-negotiated in the beginning of 2022 and was extended to 2026 on almost same conditions with minor decreases in the marginals on some of the loans. Due to the general increase in the interests the Group’s interest expenses increased significantly in 2022 and is expected to increase even further in 2023. The management expects that the interest rates will decrease in second half of 2023 and therefore no hedging has been done for the debt portfolio.Significant events occurring after the end of the financial yearNo events have occurred alter the balance sheet date which could significantly affect the group's financial position.Expected development of the company, including specific prerequisites and uncertaintiesIn 2023, the Group's total revenue is expected to increase at least by 10 %. The growth in rental income is expected to increase with a higher percentage than sales revenue.The Group expects to continue to have positive cash flow in 2023.