Hili Finance Company plc - Updated Financial Analysis Summary

On 26 June 2023, Hili Finance Company plc published an updated Financial Analysis Summary.The following are the main highlights of the expected financial performance and position of Hili Ventures Limited (the Guarantor of the bonds) in 2023:

• Revenues are expected to surge by 29.2% to a record of €1.0 billion reflecting additional growth in income across all subsidiaries. Management explained that the improvement is the result of both organic growth as well as new store openings by Premier Capital plc and 1923 Investments plc. Indeed, these two subsidiaries remain the principal revenue generators with Premier anticipating a further growth in income of 20.5% to €643.1 million and 1923 Investments expecting a surge in revenue of 36% to €316.5 million.
• EBITDA is forecasted at €119.7 million, representing an uplift of almost 19.4% over the EBITDA of €100.3 million recorded in the 2022 financial year.
• Net finance costs are expected to amount to €20 million compared to €23 million in 2022. As a result of the growth in EBITDA and lower finance costs, the interest cover is forecasted to improve materially to 6 times compared to 4.4 times last year.
• In terms of financial position, total assets and total liabilities are expected to increase to €943.48 million (+6%) and €699.4 million (+2.8%) respectively.
• Despite the projected increase in total debt to €580.8 million, when including 130 million in lease liabilities, the gearing ratio (calculated as total debt divided by total debt plus equity) is projected to decline to 70.4% from 72.6% as at the end of 2022.  Furthermore, given the expected sharper increase in EBITDA than the uplift in net debt, the net debt-to-EBITDA multiple is projected to decline to 4.36 times compared to 4.84 times in the 2022 financial year.