With 2020 behind us, we conclude that Tallinna Kaubamaja (TKM) rose to the challenge and mitigated much of the pandemic impact. The severity of the second wave resulted in Q4/20 coming in below our expectations but the cash flow was intact and supports a yield of 5-7% in coming years.

Based on the Q2 lockdown and Q3 recovery quarters, Tallinna Kaubamaja should be resilient to what seems to be a second wave of corona infections. The Q3/20 report was roughly in-line with forecast. We keep our dividend forecast implying a 5.8% yield.

To make EUR 6.8m in operating profit when the economy was shut down for almost half the quarter shows Covid-19 resilience in our view. The acquisition of ABC Supermarkets provides growth and can offset the negative effect of Lidl. We keep our dividend forecast implying a yield of 6%.

Tallinna Kaubamaja’s (TKM) Q1/20 signaled resilience thanks to its largest segment, Selver (Food retail). Online sales also offset some negative effects from non-food segments. Overall, the report was not as bad as feared.

Tallinna Kaubamaja (TKM) has potential to increase profits substantially by expanding its Car trade operations into Latvia and Lithuania. With food retail as a base, the TKM share offers a combination of yield and growth.