Inspired’s new debt facility should give the energy consultant the firepower to keep growing, suggests broker Liberum.
If extension options are exercised, the facility runs until 2028 at £60m plus a £25m accordion.
Covenants are interest cover of not less than 4 times and adjusted Net Debt /EBITDA below 2.75 times, tapering to 2.0 times in the final year of the three-year term.
“This compares to our FY 23 estimate net debt / EBITDA of 1.71 times (2.05 times including deferred consideration) and management’s target of less than 1.0 times.
Management will include deferred consideration in covenant net debt after June 2024. The margin over SONIA is broadly in line with the existing facility.
“We leave estimates unchanged. The debt re-fi should provide ample headroom for Inspired’s organic growth ambitions, and the target to double underlying profit [EBITDA] by the full year 2027.“
The broker's target price is 200p.