Capelli 4

Presentation of the company

Created in 1976, CAPELLI group is listed on Eurolist Paris since 2004 and is active in the real estate sector. The group, managed by CAPELLI Christophe, has 130 employees and is based in Paris 8.

The group’s main activities are:

• Commercial and residential real estate development
• Allotment and servicing of properties
• Rehabilitation of buildings

With more than 40 years of experience in designing living spaces for owner-occupiers, the group has focused for the past 10 years on housing development. Active through 6 locations in Europe (Paris, Lyon, Lille, Bordeaux, Luxembourg and Geneva), the group addresses 4 types of clients: owner-occupiers, individual investors, institutional investors and social landlords. In addition to its housing offer (multi-family homes, high-rise residential buildings, duplex villas, renovation), the group develops turnkey products such as managed residences (students, seniors, hotels, businesses, etc.). Its historical organic growth of more than 30% is based on the quality of its 130 employees who internalize a wide range of know-how with land developers, design offices and internal sales forces.

As the Capelli Group is listed, you can find all the detailed financial information on the following website: https://capelli-immobilier.fr/information-financiere"

Project Description

The group requests a loan of 1 050 000 € over 36 months to finance refurbishment works in Paris (Headquarters) and Lyon (administrative office) estimated at 970k€ as well as the group’s new website for 80k€ . This project will be realised by the end of the year.

As a reminder, the October lending community supported CAPELLI group through 3 loans in 2016 and 2017 for a total amount of 4 425 000 €.

The amount offered on the platform is limited to 514500€, which is in line with the regulatory limits.

Analyst’s Opinion

The borrower is a holding company whose revenues are derived from services invoiced to its subsidiaries. The financial analysis was carried out on consolidated financial statements, which reflect the group’s performance.

With a turnover of 162 512 000 € in 2017 and an experienced team, the group has a good track record combined with a two-digits operating margin.

In 2018, the increase of profitability is driven by better cost management and scale economies. The forecast is based on 2018 performances and projected turnover.

The group has a solid repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,62 and a strong financial structure, with a forecast net debt / ebitda ratio of 3 and a net debt / shareholder equity of 70% integrating 2017 non distributed net result as well as bonds due to mature after October loan term as quasi equity.

The analysis of the project leads to a credit rating of B+ and a 6,10% annual interest rate.

As the presentation of the project indicates, Capelli uses various sources of financing, including investment vehicles such as SAS 123 Capelli, advised by the 123Venture group, which Olivier Goy (founder and chairman of October’s management board) created and managed until 2014. However, Olivier Goy is no longer operational in 123Venture and has no impact on the management of the funds. In addition, we remind you that October’s managers (including Olivier Goy) systematically and significantly invest in all projects presented on October in order to align their interests with those of the lenders.

*The multiple of FCCR at 1,62 means that the company has a safety margin of 62% relative to its ability to repay its credit maturities.

The expert opinion is given as an indication on the basis of the elements provided by the project holder and information from our databases (Scores & Decisions, Corporate Banking File). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.

Strong points

• Good historical performance based on diversified base of commercial and residential clients
• Good repayment ability with a forecasted FCCR of 1,62 reinforced by the support of banking pool and the shareholders.
• Wide range of projects and target segments backed by a 40 years track record in the industry

Points of caution

• Real estate development activity can sometimes be delayed during construction with some underlying project risks