Shares in the company - which reports results at the end of this month - have climbed 2p to 18p, continuing their gradual recovery since the disappointment about the banking licence two weeks ago. The company had decided it was unlikely to be granted a licence - which would have given it access to retail funds - in the current financial climate, sending its shares sharply lower.
This morning Evolution Securities has issued a fairly upbeat note on the business, rating it a speculative buy and setting a 50p target. Analyst Hugo Mills said:
"The key issue is whether management have made any progress on the refinancing discussions for the £635m of syndicated bank loans due in 2009 (£500m in July and £135m in December) – management guidance is that they would look to achieve this by the end of the first quarter of 2009 but we expect them to give a strong indication of progress on the 26th February [with the results]. Our estimates look for around £300m to be refinanced and Cattles to generate £200m in cash by July 2009.
"We continue to believe it is more likely than not that Cattles will succeed in refinancing its 2009 debt since by restricting new business activity and focusing on cash generation, management has done as much as they can pay down debt while preserving the long term viability of the business."
No comments:
Post a Comment