Sectors > Top Reports > Picard Memo 171021

Picard Memo 171021

Picard. How Resilient Is The Post Refinancing (Including Dividend Recap) Capital Structure?
PUBLISHED: 17 October 2021
PAGES: 103
SUBMARKET: Picard, Top Reports, Top Reports,


Why Read?

  • Understand how well covered Picard’ SSNs and SNs are by DCF EV across base and bear cases, and the scope for Picard’s leveraged capital structure (post the Jul-21 refinancing, including dividend recap) to handle shocks to LFL sales growth, cost inflation and valuation multiples / parameters
  • Understand extent to which Picard can defend its frozen food leadership within the competitive French food retail market

What’s New?

  • Comparison of Picard’s KPIs vs other French food retailers – sales and EBITDA densities, store estates, rent levels, margins, cash generation
  • Comparison of frozen food retailers – Picard vs Iceland
  • Financial projections, DCF valuation and sensitivities, across base and bear cases

Questions Answered

  • Pro forma for its Jul-21 refinancing, Q1 22 net leverage (IFRS 16) increased to 7.0x (from 5.1x at Q1 22 prior to refinancing) on our figures – to what extent could either Picard’s SNs or SSNs be at risk of impairment in any adverse operating environment and / or if market re-appraises Picard’s premium valuation to other French food retailers / historic transaction multiples at which Picard has been transacted / Iceland (UK frozen food retailer)?  
  • How defendable is Picard’s frozen food leadership in France and its associated high gross and EBITDA margins and high unleveraged FCF generation? 

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