Takko - Parking some cash?

All,

Please find our updated analysis here.

It is not long ago that we have been very negative on - even short Takko. The company still struggles to produce positive net cashflow in a good year.

What has changed is that 2019 has been an excellent year. In retail a lacklustre performance in one year is not always made up for in the next, but in Takko’s case that is at least in part what happened this summer.

As a result, Takko have posted a very strong Q2, which has addressed the company’s low liquidity problem. In part that was because Q218 was an easy comp, but so is Q318 (Q319 to be reported soon). Thus coupled with Apax’ recent pledge to try and sell the company again (they know how lucky they were this summer), we feel there should at least be a 9-12 month window to “park some cash” here while LTM results will be favourable. Maybe there are even a few points upside from a CoC.

It’s not exactly our favourite name, its only recently traded up significantly and the return is not what we are seeking in principle, but the risk is limited for a while and it beats bank interest…

We are debating a small position at these elevated levels.

Wolfgang