Catena’s overriding objective is to show strong cash flow, enabling stable development and dividends for shareholders. To realise this, the operations apply a number of measurable financial targets that are communicated externally. These focus primarily on profitability and financial stability.
Catena includes a number of different functions with different conditions. They are followed up by means of a number of customized internal operational targets, relevant to the operations concerned, linked to the company’s strategies for clients and markets, property development, sustainability and financing.
Average capital tied-up
The average period during which capital is tied up should be at least two years.
With this target, the Company has secured financing over a period
of time that reduces financing risk, while the Company can, at any time, facilitate optimum credit terms for the continued financing of operations. The average period during which capital was tied up
amounted to 1.4 years (1.9). During 2019, we expect to increase the period for which capital is tied up.
The interest-coverage ratio shall not be less than a multiple of 1.75.
This level has been set to provide a satisfactory safety margin in
anticipation of rising market interest rates, for example. The continued high level from 2017 remains largely unchanged at a multiple of 3.4 compared with 3.5, and is mainly explained by continued efficient property management, an improved letting ratio and low and stable financing costs.
The equity ratio shall not be lower than 30 percent.
The target is considered well balanced with regard to the Company’s cash flow. This provides good opportunities for returns with a balanced level of risk in the operations. The equity ratio of 33.2 percent in 2018 was slightly higher than the target of 30 percent and had, on the balance sheet date, risen compared with 2017, despite the acquisitions conducted and the dividend paid during the year in accordance with the Company’s dividend policy – which was an effect of strong cash flow from operating activities.