BSH: Japanese Acquisition

While most fans were celebrating the arrival of Aitor Karanka as Blues’ new Head Coach on Friday, Birmingham Sports Holdings also made an announcement to the stock exchange which can be seen as positive news. The holding company voluntarily confirmed to the stock exchange that it intends to acquire a medical service business in Japan to continue to strengthen the Group’s profitability.

Hong Kong Stock Exchange

You can view the announcement at this link.

At the moment, we don’t know too much about what BSH are actually acquiring as the announcement was very vague.

BSH told the Stock Exchange it intends to acquire two Japanese medical services companies offering medical services to foreigners in Japan. BSH laid out the number of people who visit Japan from China every year, and that it intends to build on this business by

“further introducing high net worth customers from China to receive medical, wellness and other services in Japan with an aim to enhance its market share and market position, thereby forming an agglomeration of resources of Japan’s medical industry.”

BSH also intends to use “the internet, big data and artificial intelligence technologies” to channel this knowhow into China by means of an online platform, e-commerce and new media promotions.

When the acquisition is complete, BSH also intend to add the founder of these businesses to the management team in Hong Kong. No information has been given on who the founder is or whether he will be given a position on the board as of yet.

BSH have however confirmed what we all know – that the group is struggling a little bit due to Blues continuing to incur financial losses – and the point of this acquisition is to strengthen the company’s bottom line while the regulatory authorities continue to keep a careful eye on the business.

However, this doesn’t mean that the club will be spun out from the listing any time soon. The last paragraph makes clear that the acquisition is a small one that doesn’t really need to be announced to the Stock Exchange, and as such it won’t make a massive amount of difference initially to the fact that Blues represents 90% of the group’s turnover.

It’s also interesting that despite saying the lottery company the group bought was going to bring in guaranteed profits in previous announcements, that isn’t happening. BSH desperately need more profitable segments within the company if it is to ever end using numerous loan facilities as a financial crutch.

We have to be hopeful that this new direction will bring in some much-needed better financial results, because that will mean in the longer term BSH will be less likely to be forced to call in its loans from the football club.