Sectors > Top Reports > Iceland Memo 240122

Iceland Memo 240122

Iceland. How Resilient Is Frozen Food Niche vs Expansion Of Discounters? Food Warehouse vs “Core” Iceland Profitability. How Well “Covered” Are SSNs?
PUBLISHED: 24 January 2022
PAGES: 56
PRODUCT CODE: ICELTD0003
SUBMARKET: Iceland, Top Reports, Top Reports,

£1,470.00

Why Read?

  • Understand how well covered Iceland’s SSNs are by DCF EV (+ cash), including sensitivities to any unrecovered (via customer pass-through) and unmitigated (via cost savings) cost inflation and to UK YOY LFL sales growth shocks
  • Understand how resilient Iceland’s UK frozen food niche is to Aldi’s planned store expansion
  • Understand latest trends within Iceland’s EBITDA between its The Food Warehouse stores and its “core” Iceland stores (both new and old)

What’s New?

  • Updated financial projections, DCF valuation and sensitivities, across base and bear cases
  • Updated estimation of EBITDA split between The Food Warehouse stores and “core” Iceland stores

Questions Answered

  • Everest model “portfolio” has had strong returns on Iceland. 2024 SSNs (recommended at a price of c. 68 in Mar-20) were successfully redeemed (above par) via early call in Feb-21 and 5 year CDS (recommended long risk, i.e. sell CDS in Mar-20 at 28% upfront + 500bps running) has now rolled down to 3 year CDS (now trading around c. 0% upfront + 500bps running). Does long Iceland risk still make sense or is SSNs “coverage” too sensitive to structural decline in “core” Iceland stores’ EBITDA?

  1. View, Variant Perception & Recommendations


  2. Financial Projections, Valuation & Sensitivities – Base & Bear Cases




  3. Estimated Adj EBITDA Split – “Core” Iceland vs The Food Warehouse




  4. Recent Results & Events Review



Iceland


Aldi


 


 


 


 


 

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