Barcn Inuastnnants

SYNT, SYNTHOMER is shaping up as one of the major special situations on the LSE. Of note, they benefit from the Iran war supply chaos with “ROBUST” Q2 momentum while rivals struggle. More below 👇 PEEL HUNT - “The potential opportunity is substantial” “The target to double earnings from 2025 levels, with a 15% EBITDA margin and mid single-digit organic revenue growth through cycle, off a predominately speciality chemicals portfolio is, in our view, achievable. The refinancing provides the space to conclude the four ongoing divestment programmes – we assume SBR Europe and AM from the original divestment programme, the widening of the disposal programme’s scope in mid-2025 brings in NBR (again, we assume), and the fourth is likely to be a smaller asset but with attractive margins. Conclusion of the process can accelerate the normalisation of the balance sheet and return leverage back into the target range of 1-2x. This is not straightforward, hence the current valuation of 5.3x EV/EBITDA, but a sense check of 5x possible peak EBITDA as per target of £280m would imply a valuation of 460p. The midpoint of the two is 225p, which we lower to 200p to be conservative. The building blocks and ongoing execution are there, and the refinancing provides the window in which to deliver it” Synthomer's euro bond due May 2029 had its biggest rise on record yesterday. Trading and outlook - ahead of prior year; expecting robust Q2 2026: −   Expect robust period-on-period volume and margin progress in Q2 2026 as a result of our strong positioning and pricing power in the changed operating and commercial environment following start of the Iran conflict −   Significantly improved CCS and stable AS performances offsetting a slower start for HPPM in Q1 2026 - all businesses had improving momentum through the quarter −   Full year expectations of year-on-year progress driven by self-help actions unchanged at this stage. Given the current conditions, risks are to the upside but longer-term effects of the Iran conflict remain uncertain −   Substantial medium-term earnings opportunity from ongoing self-help actions, end-market volume recovery in core speciality divisions and further strategic delivery “the longer the trading conditions experienced in Q2 persist, the greater the upside risks for the year”