Monitoring bond issuer developments (3)

In the third article reviewing the financial metrics across the corporate bond market, the two companies operating in the food and beverage sector rank among the strongest bond issuers on the Malta Stock Exchange.

In August 2017, Simonds Farsons Cisk plc launched a €20 million bond (the fourth bond issue in its long-standing history) mainly earmarked for the refinancing of the outstanding €15 million bonds which were redeemed at the first optional repayment date of September 13, 2017. The financial year of Farsons comes to an end on January 31 and the group registered another record performance during the last financial year.

While revenues increased by 2.4 per cent to €88.1 million, Ebdita surged by 10.8 per cent to €19.3 million giving a very strong interest cover of 13.1 times. Moreover, despite the relatively high capital expenditure requirements associated with the industry, the gearing ratio stood at only 22.6 per cent as at 31 January 2017.

The Farsons Group also boasts of a very low net debt to Ebdita multiple of just 1.8 times as at January 31, 2017. This implies that the group can repay its overall level of debt in under two years, assuming that the underlying...