Additional capital to support strategic realignment; chg. PT

Portfolio “clean up”. SYNBIOTIC discontinued financial support for its Austrian subsidiary Bushdoctor GmbH, which subsequently filed for insolvency. The decision followed an internal review of the subsidiary’s operational and financial performance, revealing it was no longer aligned with the group’s strategic priorities. As a result, SYNBIOTIC has effectively removed a loss-making, non-core business from its portfolio, reducing cash outflows and allowing management to concentrate resources on higher-potential areas such as medical cannabis and industrial hemp.

Additional equity. SYNBIOTIC executed two small cash capital increases without subscription rights, issuing a total of 387k new shares at prices of € 1.60 and € 1.70, raising gross proceeds of up to € 0.64m. The resulting dilution stands at roughly 5%. The capital will be used to support growth initiatives, including product development and operational execution across the group’s core segments.

Strategic investor entry. As part of one of those capital increases, SYNBIOTIC secured an anchor investment from CANSOUL, a specialised equity fund investing across the entire global value chain of the hemp and cannabis industry. Its holistic investment approach covers cultivation, research, technology, extraction and distribution through to pharmaceutical development. Importantly, this deal initiates a long-term strategic partnership (e.g. access to further capital, CANASOUL’s network), highlighting the strength and appeal of SYNBIOTIC’s diversified platform.

Our view: Overall, the recent measures represent tangible progress in stabilising SYNBIOTIC’s financial and strategic positioning. The recent FY25 guidance cut reflects the currently challenging regulatory situation within the company’s key end market. Following this year’s strategic realignment, SYNBIOTIC should be able to return to higher growth from next year onwards (carried by medical cannabis and industrial hemp), in our view. Until FY27e, we model € 25m sales, implying a 16% CAGR. With that, SYNBIOTIC should be able to return to profitability as early as FY26e.

BUY with a € 5.50 PT (old: € 6.00) based on DCF.