Modulaire - comment

Q2 results fell below our expectations due to continued weakness in the UK and French construction markets. Although the Q2 results were poor, they were not disastrous. The company now increasingly relies on a stronger second half. The CEO's departure after just over a year is concerning since strong leadership is needed. Liquidity remains adequate, with EUR90m in cash and EUR130m of available credit under the RCF.

We had expected utilisation rates nearer 80% but they stagnated at 76%, and the rest of the revenue shortfall was down to sales of new units of EUR87m (EUR38m below our estimate). H1 FCF of EUR87m was below the Interest paid of EUR122m. We still expect H2 to be better, but the improvement will be slow. We are reviewing our model and will update you all soon.