We have provided an update for StockCo's 1H18 earnings and change our recommendation on StockCo’s 8.75% notes due October 2022. Our credit outlook remains unchanged.
- StockCo reported steady earnings for 6 months to 31 December 2017 (1H18)
- At 31 December 2017, StockCo had gross livestock receivables of AUD161.5m, up AUD21.5m from a year earlier. Strong growth in 1Q18 was offset by lower livestock prices and a dry start to the Queensland and Northern Territory summer also led to reduced buying activity in 2Q18
- Despite a weaker 2Q18, the company has noted that demand for the StockCo product continues to be strong with a strong pipeline of new client onboarding
- StockCo has engaged in a process of finding new funding partners, which will enable the company to continue to grow the receivables book. It is likely that the new funding structure will be in the form of a securitisation trust
Read the full StockCo earnings update on the FIIG website here
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