Transcom - comment

Q4 and FY24 numbers were broadly in line with our and market expectations.  EBITDA margins are showing modest signs of improvement, but doubts remain over the Company’s ability to meet its 16% EBITDA margin target in FY25.  Net Debt has stayed relatively static, resulting in a minor reduction in leverage to 4.1x. 

We will contact the Company over the next couple of weeks to get clarity on the mixed messaging around an acquisition strategy and deleveraging into a potential refinancing later this year.  The bonds trade in the low 70s and are likely to represent a better economic return for the shareholders than piecemeal bolt-on acquisitions.  

This set of results does little to sway the current arguments regarding its poor cashflow and the prospects of a successful refinancing of its December 2026 bonds.