S&P turns TKC outlook to negative

S&P said it revised its outlook for TKC Holdings Inc. to negative from negative and affirmed all its ratings, including its CCC senior unsecured rating.

“Low-single-digit revenue growth and improved margins in 2023 will not be enough to meaningfully improve leverage or bolster free cash flow generation. For the 12-month period ended Sept. 30, 2022, TKC's revenue declined 5.8% with S&P Global Ratings-adjusted EBITDA margin between 9%-10%, down from the low teens in FY2021,” the agency said in a press release.

Lower commissary and ancillary product sales due to a decline in inmate spending (down 16.7% year-over-year, but up 1.4% from 2020) caused the decline along with the loss of one contract in its food services segment, S&P said.

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