S&P alters Galaxy Finco view to stable

S&P said it revised its outlook for Galaxy Finco Ltd. (Domestic & General) to stable from negative and affirmed the B ratings on the company and its debt issued by financing subsidiary Galaxy Bidco Ltd.

“We think that D&G proved resilient throughout the Covid-19 pandemic, although its transition to a subscription and insurance-based model and costs related to Brexit and its U.S. expansion affected profitability. The group recorded strong revenue growth of 6% in fiscal 2022 relative to fiscal 2021. The 8% increase in the subscription business top line, and D&G's capitalization of the increased online sales through a digital post point-of-sale distribution channel support this growth,” S&P said in a press release.

The agency forecasts D&G’s negative free operating cash flow will have “peaked in 2022” and sees moderately negative FOCF in fiscal 2023 and positive FOCF in fiscal 2024.

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