Pasubio - comment

Pasubio’s Q2 results are unlikely to have any meaningful impact on trading levels, following the refinancing of the bonds earlier this quarter. Q2 revenue of €96.3m was marginally below our forecast, and in turn, EBITDA was lower, reflecting higher operating costs and the timing of the Luilor contribution. Cash generation was better than expected, with FCF of €12.0m negative versus €33.4m negative in our model, driven primarily by a much better working capital performance, leaving period-end cash at €31.9m, €9m ahead of forecast. We remain sceptical about the prospects for the strategic shift towards Fashion, with continued weakness in automotive leaving leverage elevated and the newly acquired businesses now needing to deliver meaningful EBITDA growth to support the balance sheet. The call at 10 am should provide some details.