Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
- Correction to above Loomis is coming with S&P only ratings at BBB (-2 notches vs. Experian).
- US heavy at 52%, France 2nd largest at 13% - not great diversification ex. USA.
- It is trying to move in to new verticals that target technology solutions (like Loomis Pay and FX) outside core cash handling business.
- EBITA margin is currently 10.9%, its run 11-12% in pre-covid years. Consensus (x7) does expect a return to those levels in the next 2 years.
- Net levered 1.8x; generally has been in the low 1-turn. This is against EBITDA, cash conversion on that is high.
- Equity distributions are significant with dividend target at 40-60% of net income and does buybacks on top of this.
- Inaugural deal, SLB step-up measurement is in Dec 2027/4yrs and will be a +75bp step-up on redemption price at maturity (100.75%). - 3m par call, CoC put at par.
This is a €2.5m in sales co - so small scale but large market share (S&P has 12% on global). It's pointing to rising cash in circulation and the fact it continues to have a significant share of total payment volumes...that is not a trend we see in major developed economies; UK as example saw cash use hit 15% in 2021 down from (estimates) of over half a decade ago. The number of ATMs have also been in decline since 2016 for the UK. Loomis points to outsourcing from companies as helping it - S&P has taken this to heart as well noting "good organic growth, supported by increasing outsourcing trends, despite changing consumer preferences around payment methods."
As Tobacco co's has shown having market share in a structurally declining industry can still be incredibly profitable. Though this has been spun-off from Securitas we would not compare it to that - guarding services is 2/3 of revenue for Securitas but it also has 1/3 to technology and solutions that should have firmer growth prospectus. It is lower margin though running a high 6-handle currently - nearly half what Loomis runs. Loomis BS is squared away on high 1-turn leverage and FCF to debt metrics that rival IG Tobacco.
For now we have spread it +20 north of Securitas (+100) at +120. ESG impacted BAT/Altria go through at 115-120 for reference (obviously better fundamentals on scale). We've mentioned before our lack of understanding on why Prosegur 29s (NR/BBB Neg) are bid through Securitas curve. It's on negative outlook not on headline growth prospects but on leverage sitting outside S&P's threshold.
Asides from roadshow;
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.