Currency in EUR
Last close As at 25/03/2023
EUR5.08
▲ −0.14 (−2.68%)
Market capitalisation
EUR24m
Research: Industrials
paragon has announced the result of the Eurobond tender offer at 60% of nominal, securing just under €1.7m nominal out of a potential €5m. The offer forms part of the ongoing debt reduction programme that will see the majority of the outstanding bond liabilities (both Swiss franc and euro) redeemed over the next few months (see our previous note). While the shares and bonds have been responding well to the management initiatives, these appear to pose a considerable potential opportunity for investors, assuming the operational growth strategy is successfully implemented.
paragon |
Further progression of debt reduction plans |
Eurobond tender offer result |
Automobiles and parts |
10 March 2023 |
Share price performance Business description
Analysts
paragon is a research client of Edison Investment Research Limited |
paragon has announced the result of the Eurobond tender offer at 60% of nominal, securing just under €1.7m nominal out of a potential €5m. The offer forms part of the ongoing debt reduction programme that will see the majority of the outstanding bond liabilities (both Swiss franc and euro) redeemed over the next few months (see our previous note). While the shares and bonds have been responding well to the management initiatives, these appear to pose a considerable potential opportunity for investors, assuming the operational growth strategy is successfully implemented.
Year end |
Revenue (€m) |
PBT* (€m) |
EPS* |
DPS |
P/E |
Yield |
12/20** |
127.2 |
(6.0) |
0.79 |
0.0 |
5.8 |
N/A |
12/21 |
146.9 |
1.2 |
0.27 |
0.0 |
16.9 |
N/A |
12/22e*** |
160.1 |
(1.9) |
(0.38) |
0.0 |
N/M |
N/A |
12/23e |
173.5 |
4.6 |
0.74 |
0.0 |
7.7 |
N/A |
12/24e |
195.6 |
9.1 |
1.22 |
0.0 |
4.7 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items. **Restated following Voltabox sale. ***paragon semvox discontinued from FY22e.
paragon has announced the outcome of the 6.75% Eurobond 2017–2027 tender offer at 60% of nominal, launched on 6 February and completed on 3 March. Holders tendered bonds with a nominal value of €1.698m out of a potential maximum nominal amount of €5m. As a result, a nominal amount of €48.302m Eurobonds remain outstanding.
The total nominal repaid through the offer is to be deducted from the accelerated €25m nominal repayment expected following completion of the sale of Semvox in Q223 as an accelerated redemption in line with the terms of redemption. In addition, the company remains on track to fully redeem the Swiss franc bonds in April when they become due, further reducing the financial risk.
While the shares and bonds have been increasing in value over the last few months, we do not feel the low single-digit FY24 P/E multiple of 4.7x reflects the operational outlook. Our capped discounted cash flow valuation of €26.6 per share would be a multiple of 15.6x of our notional post disposal FY24 EPS estimates. While this might look ambitious, we feel that such a multiple could increasingly be supported by fundamental metrics as the growth strategy is executed, with strong earnings improvements and rising operational cash flow facilitating further future reductions in the debt burden.
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Research: Healthcare
As presented at its R&D day in December 2022, Molecure has now initiated the clinical trial for its second candidate, OATD-02. This Phase I trial is an open-label, multi-centre, first-in-human, dose-escalation study. The company will target cancers where immune checkpoint inhibitors (ICIs) have had limited success, an area where we believe OATD-02/ICI combinations could have an impact. In our view, this milestone supports Molecure’s development strategy and we expect an update on this trial in H223. The company also has pre-clinical animal model data for OATD-01 for the treatment of sarcoidosis, which suggests potential use in non-alcoholic steatohepatitis, a fibrotic disease with unmet need.
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