Cavotec: SEK 165m issue to improve balance sheet - ABG

12% (pre-Q4) dilutive EPS impact, ND from EUR 30m to 15m
Alleviates gearing concerns until earnings improve
Positive, but need to show improving operations


Conducts a directed issue worth ~EUR 15m

After the close of the same day of its Q4 report, Cavotec carried out a directed share issue of 12.5m shares, raising proceeds of SEK 165m (~EUR 15m) in order to strengthen its financial position and support execution of its order book. Given the net debt of EUR 30m in Q4 (15m post share issue), 2022 EBITDA of ~EUR 2m (ND/EBITDA of 19x, 9x post issue) and Q4 FCF from continuing ops of -4m (discontinued ops added another -5m), the completed rights issue should alleviate gearing concerns among investors. According to the rights issue, the share count will increase by 13%, which based on pre-Q4 estimates a 12% dilutive impact on EBIT as well as net profit per share, while we find it positive to see that the issue was done at a premium to the current share price (SEK 13.25 vs. 13.0).

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/cavotec/Equity-research/2023/2/cavotec---sek-165m-issue-to-improve-balance-sheet/