UK retail property yields have compressed materially from the distressed levels reached in 2024, reflecting a recovery in investor appetite for
Read MoreTesco’s latest results point to a better margin environment across UK grocery. Productivity, mix and cost savings are increasingly
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Building on our work on Morrisons, it is natural to look at the Asda capital structure. Having not followed the credit closely for some time, it took us a while to reconcile the current leverage and, more importantly, establish what we consider to be the appropriate EBITDA for the business. In essence, this is the key credit question: how much of the high level of exceptional and separation-related costs incurred over recent quarters will unwind, and how much of that unwind will ultimately translate into recurring EBITDA and cash flow.
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Asda’s Q2 results should have limited impact on bond pricing, as the weak operational performance is consistent with management’s
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ASDA’s numbers on Friday will have seen the bonds softer, but the slowing pace of revenue decline is supportive. We
Read MoreThe partnership is a small positive for both companies' bonds. ASDA is adopting a lighter version of the Ocado proposition, broadly similar to
Read MoreMorrisons' bonds may be marked fractionally lower as Lidl supplants Morrisons as the #4 UK Supermarket. However, this is a
Read MoreThe incremental impact of the Morrisons price cuts to creditors is small, but it underlines the low consumer confidence and the
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Although ASDA’s pay rise is lower than its competitors’, we do not expect it to provoke staff departures or
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Sales are falling, but more slowly, and market share is flat. This will be a relief to ASDA, but it still needs to establish the targeted
Read MoreASDA is trying to bind a proportion of its customers through its loyalty scheme and is offering targeted discounts to
Read MoreAldi's investment in its stores is a response to investment programs by the rest of the industry. Aldi/Lidl are already cheaper, but run on fewer
Read MoreLosing the cheapest supermarket tag to Tesco may be a blip, but it highlights the difficulty of trying to target being 5% to 10% cheaper than
Read MoreThe mistakes in pay packets were initially revealed in March 2024. The sums involved are small, so ASDA is being magnanimous in settling
Read MoreASDA outsourcing deliveries of George (its clothing brand) is an indication of how deep the Leighton restructuring plans are
Read MoreAfter the negative impact of the IT updates to logistics, ASDA needs to make sure that the changes to its distribution management teams do
Read MoreASDA’s poor Christmas performance was trailed by Management at the Q3 results. The introduction of the new IT system caused
Read MoreManagement had already warned the market that Q4 food revenue would be lower than Q3. They also warned that margin would be
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