Fitch trims S4 Capital

Fitch Ratings said it downgraded S4 Capital plc's (S4C) long-term issuer default rating to BB- from BB but affirmed the senior secured ratings at BB+/RR2.

“The downgrade reflects our expectation that EBITDA net leverage will remain above our downgrade sensitivity in 2023-2026, with weaker free cash flow (FCF) generation due to lower-than-expected revenue growth and profitability. We therefore view S4C's financial profile and credit metrics as more consistent with a BB- rating,” the agency said in a press release.

Fitch said it forecasts S4C's net revenue to fall by 4.3% and 2% on a like-for-like basis in 2023 and 2024, respectively. S4C’s revenue growth should start climbing in 2025-2026 but at lower rates than historical levels.

The outlook is negative.

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