NoHo Partners: Lower guidance and lays off personnel in Finland due to strict restaurant restrictions - Nordea

NoHo Partners lowers its 2021 guidance owing to strict restrictions on restaurant opening hours, local restrictions on gatherings and the Finnish government’s decisions to abolish the use of COVID-19 passport. As a consequence, the company will have to close almost all of its restaurants in Finland and lay off nearly all of its personnel. For 2021E, the company expects around EUR 185m sales (previously: around EUR 190m) and above EUR 10m positive operating cash flow (previously: approximately EUR 12m positive). For Q4, NoHo expects more than EUR 8m positive operating cash flow (previously: more than EUR 10m positive) and below EUR 70m sales (previously: around EUR 70m). Refinitiv consensus has been expecting EUR 187m sales in 2021E. Finnish government announced new restrictions after negotiations on 21 December. New restrictions are coming into force from 24 December and will tighten on 28 December. Restriction s should last for three weeks from 28 December. Traditionally, the beginning of the year is the weak season for the restaurants, hence the impact from the restrictions could be limited for 2022E. However, we note the risk for prolonged situation. Given the new guidance, NoHo implicitly expects its operating cash flow to remain positive in December, while swing in net working capital should cause some short-term liquidity pressure, we note. NoHo had EUR 10.9m cash and cash equivalents at the end of Q3 while it made additional repayment of loans amounting to EUR 8.7m after Q3. In addition, the company has 5.9m shares in Eezy, worth around EUR 34m.