Transcom - comment

Transcom’s Q3 results are broadly positive for the bonds, with continued organic growth and lower leverage, although the absence of any discussion around a shareholder exit in the Q&A is likely to leave the market reaction muted. Revenue increased 5.5% to €191.7m, with organic growth of 5.3%, while EBITDA excluding non-recurring items was broadly flat at €27.9m (€27.7m). The EBITDA margin declined to 14.6% from 15.2%, reflecting lower occupancy in the English-speaking segment, although the European business continued to improve operationally. Net debt declined to €364.8m from €389.9m year on year, reducing leverage to 3.5x from 4.1x. Overall, the results support the improving credit story, but without a shareholder-exit catalyst emerging from the Q&A, they are unlikely to drive a material near-term move in the bonds.