Castelnau Group (CGL) is up more than 30% over the last five days thanks mostly to an announcement from portfolio company Dignity/Valderrama (which accounts for almost 80% of the trust), which was up 45.7% (with a NAV impact of 43.0%).
The primary driver of this uplift is the reduction in net debt which has been facilitated primarily by surplus that has been withdrawn from the funeral plan trusts. This money alongside receipts from freehold disposals will be used to repay noteholders c. £80.0m. This repayment is in addition to the £15.6m that was announced in May. The repayment of the debt will significantly reduce the covenant hurdles to a level where the business should be able to operate within and reduce the annual debt service by c.£11m. In addition, the assumptions driving the trust valuation have been aligned to the latest actuarial valuation, creating a positive uplift. The Dignity/Valderrama performance was partially offset by performance of other assets in the portfolio.
CGL : Castelnau Group jumps on Dignity announcement