Divisions Holdings Group

Overview Key strengths Key risks Asset-lite business model with 100% of services outsourced to third-party vendors Operation in the highly fragmented and price-competitive industry with low switching costs and limited barriers to entry. Nondiscretionary service offering provides stable demand patterns despite some seasonality Meaningful customer concentration risk with top five customers accounting for ~50% as of fiscal 2021 Long-tenured relationships with blue-chip customers. Small scale despite rapid growth over the past three years. Narrow end-market concentration within U.S. retailers. DMG generated 16% revenue growth for fiscal 2021 (ended March 31, 2022) with stable EBITDA margins in the mid-teens percentage area highlighting the essential nature of its service offering. The majority of growth came from its on-demand services work (handyman work,

...We expect S&P Global Ratings-adjusted debt to EBITDA to remain in the high-4x area amid an uncertain economic environment. DMG generated 16% revenue growth for fiscal 2021 (ended March 31, 2022) with stable EBITDA margins in the mid-teens percentage area highlighting the essential nature of its service offering. The majority of growth came from its on-demand services work (handyman work, plumbing, and electrical), which accounts for two-thirds of revenue. A muted snow season, which accounts for about 20% of total revenue, marginally offset some of the total revenue growth, which demonstrates the need to diversify its revenue base. However, given the nondiscretionary nature of the majority of DMG's offerings, we expect revenue growth to continue into fiscal 2022...

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