Intrum - comment

Intrum results were a little more disappointing than we had expected. The service division had already begun to show signs of weakness in Q1, but management supposedly had squeezed out results ahead of the capital increase. Now that the cash is in, Servicing is showing -2% organic LfL, when it is supposed to carry the investment thesis. The main drag remains southern Europe, where demand is drying up in Greece, leaving cost overruns to be reigned in, while in Spain the Haya portfolio is shrinking without replacement. Management has signalled a return to DP acquisitions, promising discipline. This time it'll be different. Still, we don't foresee any danger to the bonds during their lifetime and are happy yield holders, even on a down day.