Moody's changes Boparan view to positive

Moody's Investors Service said it changed the outlook on Boparan Holdings Ltd. to positive from stable and affirmed its Caa1 corporate family rating, Caa1-PD probability of default rating and the Caa1 ratings on the £475 million and £50 million backed senior secured notes both due 2025 issued by Boparan Finance plc.

“The change in outlook reflects significant growth in profitability over the last two quarters despite continued cost inflation and deteriorating economic outlook in the U.K. and E.U. Boparan recorded 29% like-for-like revenue growth in its key poultry segment in Q4 of fiscal 2022 ending July, indicating successful price increases implemented over the last 12 months,” Moody’s said in a press release.

Boparan’s poultry margins also widened to 5.7% by Q4 from the lowest point of just above zero in Q1 of fiscal 2022. Updated contract terms allowed for much faster and automatic pass-through of the feed costs, which is the single largest cost component for chicken, to the customers, the agency noted.

Moody's said it projects Boparan's gross leverage, measured as Moody's-adjusted debt to EBITDA, was at 5.3x compared with 8.9x in fiscal 2021.

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