Rekeep - comment

Rekeep S.p.A. reported Q4 and FY25 results on Friday, prompting a further 3–4 point sell-off in the bonds. Revenue came in line with our expectations, and improved contract wins are starting to support backlog growth; however, EBITDA materially underperformed due to higher-than-expected catering costs in Poland, with management providing an unconvincing explanation for the Q4 shortfall.

On the positive side, the company received a favourable ruling on the FM4 fine on 17 February, requiring the Italian Competition Authority to reassess the penalty within 60 days. As a result, Rekeep has suspended the related instalment payments from February 2026, amounting to c.€6m per annum. 

Our initial take post results is the bonds are more attractive at current levels, yielding around 16%, given limited debt ranking ahead of the August 2029 maturity and materially strengthened bond documentation. That said, the poorly explained margin deterioration requires some additional work over the next couple of days. The reliance on asset sales for deleveraging suggests continued volatility in the near term.