PizzaExpress - comment

Nothing revolutionary to drive bonds either way. Q126 was astonishingly on target. Prior to that, Q425 Progress ever so slightly beat our expectations, with Revenue and EBITDA £1m and £2m ahead of expectations. Normally, we would call that "right on target”, but in such a tacit turnaround situation as this, every little helps. The Q426 WC inflow was not as strong as we expected, offset by a slightly lower CapEx spend, which meant that year end cash was €6m weaker than expected at £29m. However, Q126 cash is again in line, safe for the £7.5m drawing of the RCF, which we had not modelled. The company has until 2029 to grow into its capital structure, but that still means we need to see more turnaround. At 16% YTM, investors get compensated for holding the debt and the de facto equity exposure in the name.