Corporate Credit Rating for INNOVATIVE-RFK S.P.A. (First Issuance)

modefinance published the Solicited Corporate Credit Rating of INNOVATIVE-RFK S.P.A. on its CRA website. The rating assigned to the entity is B1+ (First Issuance).

The analysis revealed that the company has average capability of repaying financial obligations and that possibile adverse macroeconomic conditions or different management or strategies may impact on the capability of repaying its debts.

The rating assigned by modefinance is based on the following key motivations:

• The holding Innovative-RFK S.p.A. presents an adequate economic and financial situation. Compared to the previous year, the company improved its solvency, on very positive level, and its liquidity, which becomes adequate. Profitability remains weak, despite the growth in turnover and profit for the period.
• Although the operating cash flow is negative (also due to the particular activity carried out by the company) and the investment activity absorbs additional resources, the total cash flow at the end of 2019 is positive, thanks to the financing activity, and in particular to the two capital increases occurred in the last year. The final liquidity allows the company a certain treasury margin.
• The analysis of the company's credit history files provided by the Italian Central Credit Register revealed the company has recently zeroed its debt to banks and credit institutions. Previously, the company managed its credit lines in a positive way, without overruns.
• Since the first day of trading on Euronext, on 16/01/2020, the stock has undergone few price fluctuations, mainly due to its low liquidity. This allowed the company not to be affected by the crisis associated with Covid-19, which instead depressed all global stock markets.
• The company is listed on Euronext and about a quarter of the shares are floating. The main shareholder of the company is Pescetto Paolo, founding shareholder, who holds 21.7% of the share capital. As a holding company, Innovative-RFK holds numerous interests in various companies, most of which have an adequate financial condition. The company is managed by a board of directors, has a board of statutory auditors and an external auditing company.
• Innovative-RFK was founded in 2017 by the same partners of Red-Fish Kapital, who have a long experience in the sector. Through a crowdfunding campaign in Italy, the company has recently been listed on Euronext. No black records were found.
• Compared to its reference peer group, the company has an excellent position in terms of solvency. On the other hand, both in terms of size and turnover it is well below the distribution median.
• The sector in which the company operates shows good and continuously improving indicators of solvency and profitability in the last four years. In the same period, the analyzed company recorded excellent and better solvency indicators than those of the peer group, but also lower profitability indicators.
• The market of innovative SMEs, in which the company invests, is growing but still seems to be little known, as proven by the reduced number of companies registered compared to the potential basin. The market has strong growth potential, also given the tax, corporate and financial advantages provided for by current legislation and exclusively dedicated to the innovative SMEs registered in the appropriate section of the Chamber of Commerce.
• The pandemic and the consequent economic losses led to a contraction in GDP and employment level, from which there are no benefits for any type of company active on the market, beyond any political and economic measure undertaken by the Government and / or the European Union. In any case, the latest Decree issued by the Government provides measures to support SMEs and innovative start-ups and SMEs, the company's investment target.

In the following table, the addressing factors, actions or events that could lead to a rating upgrade or a downgrade are summarized:

The present Corporate Credit rating is issued by modefinance under EU Regulation N. 1060/2009 and following amendments.

The present rating is solicited and is based on both private and public information. The rated entity and/or related third parties have provided all private information used. modefinance had access to some accounts and other relevant internal documents of the rated entity and/or related third parties. Solicited and unsolicited ratings issued by modefinance are of comparable quality, as the solicitation status has no effect on methodologies used. More comprehensive information on modefinance Corporate Credit Ratings are available here.

The present Corporate Credit Rating is issued on MORE Methodology 2.0 and Rating Methodology 1.0. A comprehensive description of both methodologies, as well as information on modefinance Rating Scale and Mappings, is available here. 

For information on historical default rates of modefinance Corporate Credit Ratings please refer to ESMA Central Repository and ESMA European Rating Platform.

modefinance refers to default as a company under bankruptcy, or under liquidation status, or under administration or for which missed payments on a financial obligation are officially recorded.

The quality of the information available on the rated entity and used to determine the present rating was judged satisfactory by modefinance. Please note that modefinance does not perform any audit activity and is not in a position to guarantee the accuracy of any information used and/or reported in the present document. As such, modefinance can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect.

The present credit rating was notified to the rated entity in order to identify potential factual errors, as prescribed by the CRA Regulation. No amendments were applied after the notification process.

The rated entity is not a buyer of ancillary services provided by modefinance (credit risk software).

The rating action issued by modefinance was performed independently. The analysts, members of the rating team involved in the process, modefinance Srl and its members and shareholders do not have any conflicts of interest in relation to the Rated Entity and/or Related Third Parties. If in the future a potential conflict of interest is identified in relation to the persons reported above, modefinance Ratings will provide the appropriate information and if necessary the rating will be withdrawn.

The present Credit Rating is an opinion of the general creditworthiness that modefinance issues on the rated entity, and should be relied upon to a limited degree. The issued rating is subject to an ongoing monitoring until withdrawal.

Head Analyst – Andrea Marion (Rating Analyst)
andrea.marion@modefinance.com
+39 040 3756740

Assistant Analyst – Chiara di Piazza (Rating Analyst)
chiara.dipiazza@modefinance.com
+39 040 3756742

Responsible for Rating Approval – Pinar Dilek
pinar.dilek@modefinance.com
+39 040 3756740