Takko - that third lockdown
All,
Please find our all-new WC/LC/Liquidity focussed model of Takko here.
As in other recent names we have abandoned the WC Days calculations in favour of a more fundamental approach.
As per previous comments, the latest injection of liquidity appears too small to us and the first state in Germany will re-enter lockdown on Monday. The remaining states should follow soon. Once again the lockdown will require the closure of nearly all of Takko’s German stores. We expect the lockdown to last two months, which should render the current inventory very difficult to move - thus requiring a bigger injection to fund purchases going forward.
WC and LCs:
The model puts a particular emphasis on working capital, for which we have abandoned the usual Days calculation in favour of a more fundamental approach. This also helps highlight the role the LCs have been playing in the WC financing in the past and - crucially - they cannot play now as already fully drawn.
Positioning:
We remain short Takko for 5% of NAV and are expecting the company to re-approach creditors in the near term. We have heard differing accounts of availability of borrow. So please let us know if you can or can’t find it.
Here to discuss,
Wolfgang
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E: wfelix@sarria.co.uk
T: +44 203 744 7003