Announcement of Periodic Review: Moody’s announces completion of a periodic review of ratings of Owl Finance Limited
Global Credit Research – 25 Aug 2020
London, 25 August 2020 — Moody’s Investors Service (“Moody’s”) has completed a periodic review of the ratings of Owl Finance Limited and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody’s reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody’s practice has been to issue a press release following each periodic review to announce its completion.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Key rating considerations are summarized below.
Owl Finance Limited’s (Yell) Caa2 rating reflects the company’s (1) established market position providing digital marketing services to local businesses in the UK; (2) its role in the UK digital ecosystem providing online presence management and digital performance enhancing services to SMEs, however competition in the space remains quite challenging; (3) breadth and depth of relationships with search engines, such as Google and social media companies, such as Facebook; and (4) its nationwide sales force.
However, the rating is constrained by (1) geographical concentration in the UK; (2) relatively small scale compared to global digital advertising players; (3) need to stabilise the audience of Yell.com; and (4) continued increase in company’s leverage until the business stabilises its revenue and EBITDA.
This document summarizes Moody’s view as of the publication date and will not be updated until the next periodic review announcement, which will incorporate material changes in credit circumstances (if any) during the intervening period.
The principal methodology used for this review was Media Industry published in June 2017. Please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
This announcement applies only to EU rated and EU endorsed ratings. Non EU rated and non EU endorsed ratings may be referenced above to the extent necessary, if they are part of the same analytical unit.
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Gunjan Dixit VP - Senior Credit Officer Corporate Finance Group Moody's Investors Service Ltd. One Canada Square Canary Wharf London E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 Client Service: 44 20 7772 5454 Peter Firth Associate Managing Director Corporate Finance Group JOURNALISTS: 44 20 7772 5456 Client Service: 44 20 7772 5454 Releasing Office: Moody's Investors Service Ltd. One Canada Square Canary Wharf London E14 5FA United Kingdom JOURNALISTS: 44 20 7772 5456 Client Service: 44 20 7772 5454
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