Cerba - comment

Initial reaction is that the numbers are better than we had expected, but regardless, the capital structure is unsustainable and needs restructuring. There are rumours abound that Houlihan Lokey is now definitely working with EQT on a proposal, but with no maturity until October 2027 (the RCF), there isn’t any immediate time pressure.

The Q2 numbers are slightly lighter than we expected on topline, but the Company has taken costs out, outperforming our EBITDA projections by 10% or €10m. Personnel Expenses and other operating expenses are both down as the Company focuses on costs, resulting in FCF before interest €20m better than projected. That didn’t stop the CFO from drawing down the remainder of the RCF, and despite this additional €70m of drawings, the cash balance is still c.€50m. 

The Company are holding a call this afternoon at 2 pm, after which we will reassess our short position.