| In FY25A, ISCC reported a performance below both FY24A and our expectations, highlighting how the recovery expected in the second part of the year did not materialize to the extent initially envisaged. Value of production amounted to € 5.40 million (vs € 8.76 million in FY24A), while EBITDA was negative at € -0.93 million (vs € 2.40 million) with a margin of -17.7%. Performance for the year was affected in particular by the timing of certain sale and enhancement transactions, whose economic contribution was lower than initially assumed, with a significant impact especially on the portfolio resale component. Net Income amounted to € -2.28 million, mainly reflecting the contraction in volumes, particularly in portfolio resale, only partially offset by the growth of servicing activities. In light of the 2025 results, we have revised our estimates downward for the next three years. While we had initially interpreted the interim results as mainly related to transaction timing, the full-year data highlighted lower visibility on the conversion of the portfolio into revenues. We now estimate for FY26E a production value of € 7.65 million and EBITDA of € 1.00 million, maintaining a recovery profile over FY27E–FY28E, but on more conservative assumptions. Even in this context, the Company continues to show good operating capacity in the management and enhancement of portfolios; however, FY25A confirms a still-elevated execution risk, with visibility on the growth path still linked to the actual completion and monetization of transactions. We carried out the valuation based on the DCF methodology, including in the calculation of the WACC a specific risk premium of 2.5%. This results in an equity value of € 36.1 million. The target price is € 2.80, with a BUY rating and MEDIUM risk. |
