Upfield - comment

Upfield have partially extended its Bank Loan Facilities, the RCF to October 2027 and Polish Zloty Term Loan Facilities to January 2028. However, the majority of the Term Loans have not changed, still maturing as early as July 2025. The amended facilities have a springing maturity which relies on the Sterling, Euro and Dollar Term Loans to have their maturity pushed out. It is strange to request an extension on the RCF and Zloty facilities without doing a full refinancing. The Company are likely to propose an extension for the remaining Term Loans in the coming quarters, probably along with an amend and extend proposal for the HY bonds.

Separately, there are increasing number of press articles on the expected reduction in food inflation, with retailers targeting price cuts in milk and dairy products. However, this is not new news and already forms parts of our model for the remainder of FY23 and FY24.