Pfleiderer is at an interesting inflection point given the state of its current end markets. Having completed the refinancing of its debt over summer, we have gone through the various drivers of its operations and based on the outlook provided in its recent Q2 results, formed our own view of how they will move going forward which is reflected in our latest model. Based on these findings, we have ascertained on the feasibility of a refinancing in the medium term which is driving our view of the bonds.
CEL has faced several operational challenges over the last two years, and we determine its success in putting these problems behind it. We assess our investment stance based on our expectations of future performance and the capital structure. We also, delve into the ownership structure and how this could impact the value of our investment.
Post Q2 numbers, we have stepped back and reassessed the risks and opportunities across the Heimstaden structure. We have updated our operational data and assumptions, but the issues lie elsewhere. We build on our previous work outlining the options available to the Company and its shareholders. We model the impact on interest coverage ratio and ability to pay dividends across all options, including perpetual bond exchange and various magnitudes of asset sales.
Post our review of Granul's Q2 2024 results, our investment thesis on the credit remains unchanged. We have analysed current demand trends, average selling prices for pellets, and the dynamics surrounding the renewal of existing contracts. Based on insights from management regarding the outlook for pellet prices and overall market conditions, we have updated our financial projections for 2025 and 2026. To that end, we assessed Graanul's cost structure and capital expenditure assumptions to gain a comprehensive understanding of their ability to generate free cash flow and de-lever going forward.
With confidence having returned to the European Property space, we have changed our focus from liquidity to management's chances of further enhancing equity value. We envisage less asset sales in the coming quarters and will see a return to development risk over the medium term. We continue to analyse AroundTown as a standalone vehicle, albeit with potential dividend income in the future.
While maintaining our previous analysis, we have slightly shifted our focus away from liquidity towards management's efforts to drive equity value. Liquidity is no longer the main concern, and post recent debt issuance the Company now enjoys additional breathing room to deliver on other targets. Following the recent rally across the board, we have re-evaluated our positions in both AroundTown and Grand City Properties especially given the change in creditor focus.
We have taken a position in Transcom based on our analysis of the anatomy of its revenue slowdown and margin declines in its key end-market verticals. We discuss the reasons for the slowdown, whether they are cyclical or structural and how challenging management will find protecting margins. Has Al permanently impaired it's business model or could it even enhance the company's growth and cash flows? We find that the key stakeholders and the corporate governance arrangements will impact refinancing in the future.
Some of Atalian's customers are pushing back on price rises, so we assess the impact on cash flow, liquidity, and the value of the bonds to determine whether we should alter our current investment position. We have also investigated the catalysts and timing for the next moves in Atalian's bond price and included it in our analysis of when and how we should approach our investment.
Adler has been a big theme for us since 2021. The second restructuring leaves the company with five years of runway. But what exactly is the company going to do with its new balance sheet? What will it be in 2028, and when and how will it sell its holdings in Brack and its development assets? We have updated our analysis with an all new projection for the next five years, the new capital structure and game theory, and have reviewed some of the development assets based on recent lowball bids we have become aware of. We conclude where we want to be in the cap stack.
The Q2 figures per se did not alter our thesis on the name, but they were an opportunity to verify our model and assumptions for the company, now and going forward. We have adjusted our segment forecasts and cash flow projections to consider the sponsor's multi-faceted position.
With further weakness in OEM production guidance for FY24 and beyond, Standard Profil management's desire to refinance before year-end is called into question. We have reexamined their order book, the impact of recent order wins and what this means versus a worsening macro picture. We evaluate the various options available to the Company and its sponsor, ultimately coming to a different view than that of the Company and the market.
Our analysis is focused on how is Cerba surviving the downturn in tariff cuts in France & Italy and R&D capex budgets in the pharma sector. We have reviewed the Q2 2024 results to better understand the progress on the top line that the company is making in its core medical lab, specialty lab and research divisions. In addition, we have also reviewed the trends in Cerba's cost structure, margins and liquidity for the recent quarter to understand the scope and timing for the evolution of its cash flows. Based on these findings, we have modified our initial view on the capital structure of the company.
We have updated our model for the recent quarterly results and have based projections on the respective developments of the Italian and the Polish business. Having scraped and worked on certain data from recent releases, we reiterate how the story has changed since the last refinancing, specifically the capital structure both on- and off-balance sheet. Adjusting for these changes and the estimated growth rates regionally has cemented our investment thesis on the name.
Management tries to distinguish between Altice International and Altice SFR, but investors remain sceptical. Our analysis further explores the topical use of proceeds questions and options available to the Company. Building on this topic, we highlight some peculiarities which raise the pertinent question - are asset sales in the interest of creditors? With the sales process for Portugal ending without any agreement, we explore what infrastructure assets could be sold and the implications for creditors.
We have updated our model for the recent Q2 results, confirming our underlying view, but we are aware trading levels are more dominated by shareholder concerns than operational issues. Depending on which, if any, asset sales occur, we focus our attention on the legal constraints and scenario analysis.
The recent refinance action at Ocado has prompted us to review our investment stance, given the yields offered and the maturity profile. We build this onto our model to assess what funding Ocado may require in the medium term and how that should impact the return we seek.
We have scrutinised the recent results from Morrisons and despite the recent market share challenges we are altering our stance to reflect our increased conviction in our investment analysis. We build in our calculation of the EV of the business and the impact on the value of the SUNs. We also interpret the performance of our existing position in the Morrisons debt stack, how these fit in with our new stance, and the returns we anticipate over the next year.
After the 24H1 results, we have altered our positioning in Branicks to reflect the new risk-return profile of the bonds. Our changed investment view also reflects the relationship with VIB and the potential impact on future intra-company transactions, particularly given the VIB AGM outcome. Finally, we outline what we want to see in terms of asset disposals both in amount and in sector.
Post the sale of the SAARS minority stake, we have evaluated Grifols liquidity and future deleveraging in the context of taking a position. We highlight the favourable market conditions for the industry in total but individual players will have to overcome some outstanding issues to take advantage of the potential growth. We are conscious that the family may lead a buy-out of the Group, which has already impacted on trading levels of the bonds.
The weakness of the bondholder position in Accentro - historically our primary concern with the situation - is both documented and remedied by the 50c/€ buy-out of the junior bond. We therefore overlay our further refined view of the assets with the proposed new legal and capital structure to assess an investment now or immediately after implementation and find that risks and opportunities have a new weighting.
We are building on our successful model for the company to integrate Q224 financials and news. I hus tar the year has had a tew surprises, which when taken together, are not enough, however, to make us change our mind - or even position. Given the economic environment, the market back-drop, relevant sports events, the M&A in the sector and now a routine bondholder ID request, there has been a lot to consider in this IM and we feel very strongly about it.