BioGroup - comment

Ahead of its FY25 conference call tomorrow at 1:00 pm, BioGroup released its Q4 and FY25 results. The figures came in modestly below our expectations, with a €33m revenue shortfall and EBITDA €6m lower than forecast; however, we do not expect this to materially affect near-term trading. We continue to challenge the scale of EBITDA adjustments, which in our view understate leverage: we estimate leverage at c.6.8x versus the company’s reported 5.6x.

Our subordinated bond position now trades around 94c, offering a 7% yield to maturity or 8.7% to a potential refinancing in September 2027. Given the rally from our entry point at 81c, we are inclined to exit the position. The subordinated bonds sit at the bottom of a heavily senior capital structure, and any refinancing at materially higher interest rates would substantially lower interest coverage. That said, we will await management’s commentary on tomorrow’s call before taking action.