15% IRR while nothing happens

I recently saw Moury Construct picked in a Substack article by Luke Wolgram in his new substack Absurdly Cheap Stocks, and I highly recommend you go and read it. I’ve also subscribed as Luke’s has done good work in the last years.

I’m taking the chance to review the business since my last post in 2024 and explain what has happened in the last two years, as I still hold it and has generated (and I expect it to continue to generate) good returns for me.

If there is one lesson from this review is that when buying good businesses at cheap prices that keep growing, you don’t really need a mulitple re-rating, or the market discovering the idea.

In May 2024 I wrote about Moury. A fourth-generation family business in Liège, running a negative working capital model because their public clients pay in advance, with half of its market cap sitting in cash. I paid around €600 avg for my shares and argued that with a balance sheet like that and 15%-20% FCF/EV at the time, very few things could go wrong. Growth, hinted at by new contracts that were to be announced in September 2024, was the possible catalyst.

The Sep 2024 contracts came later than expected. 2024 revenue actually fell 4%, to €186 million, because many of the new projects were in their start-up phase during H2. Percentage of completion accounting punishes you in these situations. You could only see the improvement of the business that year looking at the backlog.

And finally 2025 arrive with revenue growing 34% to €249.6 million. Operating profit grew 31% to €38.1 million, which means the operating margin held above 15% for the fourth year in a row (in construction!). Net profit grew 41% to €34.5 million, or €87 per share. And a key number, net cash, ended the year at €152.5 million, up from €119.6 million. The company grew revenue by a third, paid dividends, and still added €33 million to the pile. That is what negative working capital looks like when it works, because growth does not consume cash here, it actually increases it.

Visibility got better too. The order book at the end of February 2026 stood at €371.5 million, roughly 18 months of activity already signed, and management guides to keeping the record 2025 level of activity through 2026.

The most important development of these two years is that in late 2024, the CEO, Gilles-Olivier Moury, bought out his siblings through his holding company and now controls just over 50% of the shares.

For a decade, the company said it looked at the future avec sérénité, paid a modest dividend, published only in French, and let the cash accumulate. If you are planning to buy out your family, a depressed share price is a good thing. Then the buyout closed, and within months the company introduced its first ever special dividend of €5, raised the ordinary from €11 to €12.50, and committed to repeating the special in 2026 and 2027. A year later the ordinary goes to €14.20 and the special to €7.50, both paid this June, €21.70 gross in total.

When you have a family-controlled business, incentives are the main thing to watch. Gilles-Olivier controls the company and only gets paid when the rest of us get paid. That alignment did not exist when I wrote the original piece, and it’s a step forward towards getting the accumulated cash distributed.

The share price went from the €635 where I finished buying to around €750 today. Add roughly €50 per share in gross dividends collected along the way and the total return sits somewhere near 30% over two years.

This is not the 20% IRR path I expected in my original thesis, but the whole point around holding these kinds of businesses is generating predictable returns, which Moury certainly does (just look at the backlog).

And the business actually ran much faster than the stock. EPS are up over 40% in the last year, the cash pile grew, and the ex-cash multiple is still around 4x earnings. Strip out €380 of net cash per share and the market is paying about €370 for a business earning €87/share, growing, with 18 months of revenue signed. The market is basically paying (cheaply) for earnings and refusing to pay for the balance sheet.

1. The revenue mix is shifting.

My original thesis leaned on public clients that prepay. The recent growth has come partly from selective private projects, and the subsidiary driving it, BEMAT, grew over 50% last year and is now around 40% of group revenue. Private clients do not systematically pay in advance the way public administrations do. Gross margins already ticked down in 2025 even though operating margins held. The negative working capital is still doing its thing (as the 2025 cash build proves), but the blend is changing and the balance sheet might become weaker, Despite actual earnings growth, if the % of private projects keeps increasing by needing to fund growth.

2. The cash is not all cash.

Around 1/4 of the treasury sits in a securities portfolio of equities and bonds, individual positions capped at 2%, plus a gold position that has appreciated to almost 6% of the book. Part of the €8.5 million financial result, which more than doubled last year, is portfolio gains rather than deposit interest. Please do a haircut to the pile when valuying this kind of situations, it’s never straightforward.

3. The 15% margin assumption can still be challenged.

A 15% operating margin in construction is extraordinary. The bear case for 4 years has been mean reversion to mid single digits. It hasn’t happened, but that doesn’t mean it won’t happen in the future. If margins revert, the current multiple and the cash mean the downside is not as significant, which is the asymmetry I bought. But I hold this position knowing the margin is the key risk.

4. The discount may simply never close.

11 shares traded on a recent session, so this is illiquid! Reports in French, no analysts, a controlling family, no index that will ever include this... This is a considerable ceiling on any significant rerating. I’m ok with the idea that the return here may come entirely from dividends plus retained earnings compounding, with the multiple doing nothing. At these prices, that is still an acceptable outcome for me.

1. The first is a step change in distributions.

The specials divs are committed through 2027 and then the framework is open. The company returns about €8.6 million a year while generating 4x-5x that. Buybacks cannot absorb it because the float will not allow it. A large extraordinary distribution or a tender offer would be a surprising outcome given the characteristics of the owners (traditional, conservative), but for the first time there is a controlling shareholder which will significantly benefit from it. I don’t expect any significant change regarding distributions before end of 2027.

2. The second is a fifth and sixth year of 15% margins.

I do believe at some point the market starts recognizing this is a superior construction business if the margin holds.

3. The third door is the wild card.

Someone simply deciding to take private the whole thing. I do not underwrite takeovers, but the cheaper and cleaner an asset stays the longer that option runs without costing anything.

Since a significant part of the return here comes from dividends, the tax matters. Belgium withholds 30% at source, which is why the €21.70 gross became €15.19 net this June. Most tax treaties, including those with Spain, most of Europe and the US, cap the Belgian withholding at 15%, but getting the difference back means filing a reclaim with the Belgian tax authorities, paperwork that many brokers will not do for you on a stock this small. The treaty portion is generally creditable against your home taxation but the excess above it usually is not, so the lazy path costs you real basis points every year. Not tax advice, just a reminder to check what your broker actually does with Belgian withholding before you assume the net yield.

Same place I was two years ago. This is not a place to bet half of your portfolio, but a derisked way to probably earn 15%-20% IRR. Nothing that happened since has changed that framing. The price is actually lower against what the business produces than when I bought it.

The thesis is playing out in the fundamentals and dragging its feet in the price (I should get this tattooed as this is my day to day). But this is a more confortable position than a value trap where there is no growth and you are just waiting for a catalyst to happen.

If it has been cheap forever why would it stop being cheap? My answer is that it does not need to stop.

Run the math and suppose the multiple never moves. You still collect a dividend that has grown every year and now yields around 3%, and you own a per-share stream of earnings and cash that keeps compounding. If earnings per share grow high single digits and the payout keeps climbing, the stock price has to follow the fundamentals eventually, without the market re-rating it. Cheap forever + growing forever is a perfectly good setup. As long as the fundamentals keep improving we are fine.

If a step change in distributions arrives after 2027, or the market one day decides a construction company with these margins and this balance sheet deserves a more fair? multiple, that is just additional returns.

This is not investment advice, do your own work.