Classification of NuWays AG to Readcrest Capital AG

Company Name:	Readcrest Capital AG
ISIN:	DE000A0LE3J1
Reason for the research:	Initiation
Recommendation:	BUY
Target price:	EUR 2.8
Target price on sight of:	12 months
Last rating change:
Analyst:	Philipp Sennewald

Cash from care, upside from concrete; Initiate with BUY

Hamburg-based Readcrest Capital combines a steady UK domiciliary care provider with German real estate project development. The pairing looks odd at first sight, but rewards a closer look: stable, public-sector-backed cash flows on one side, the optionality of a distressed development pipeline on the other. Capital is the link. The Apr '26 disposal of the UK care home business for an initial £ 44m repaid £ 30m of debt and left £ 14m for domiciliary bolt-ons and the German projects — so the care pillar funds the development pillar without recourse to the equity market.

TV Healthcare (91.1%) is one of the UK's largest domiciliary care providers via its subsidiary GHSC, delivering ~90k care hours per week (FY25) through c. 3,500 employees, 90% of them carers. The service portfolio spans standardised home visits to full-time care, complemented by reablement packages (hospital discharge). GHSC runs a multi-brand platform across 58 UK locations. FY25 sales came in at € 128m with € 12.5m EBITDA. The top line is recurring, based on multi-year commissioning contracts with local authorities that continuously feed new clients into the network.

Thanks to strong CQC ratings and its position as lead provider in most of its largest markets, GHSC is in pole position to regain mandates once contracts mature. The logic behind this: as lead provider, the company holds an installed base of clients, rotas and branch infrastructure built around one council's requirements. On top of that sits a second lever. In a market of thousands of sub-scale operators, six bolt-ons have been signed since November 2025, adding some £ 4.3m of post-synergy EBITDA (eNuW), and the pipeline of willing sellers is not shrinking.

The catalyst sits in the German real estate business. RC Stadtentwicklung (100%) acquired majority stakes in four project companies from insolvent AOC, with a fifth project (Fürstenwalde, 50%) added separately to the residential-heavy pipeline in 2026. Total GDV is seen at € 658m (eNuW), € 474m attributable, against € 514m of costs, realised project by project until FY31e. The margin comes from land taken out of insolvency at roughly € 300 per sqm with permits attached, plus a creditor workout that has produced € 16m of signed waivers and a receivable purchase removing a further € 19.6m of liabilities for € 825k. Risks remain: (a) two projects still need permits/rezoning, (b) the creditor workout is only part way done, with a further tranche in advanced negotiation, and (c) every project needs replacement capital to take out legacy lenders before construction starts.

Two factors mitigate this. Legacy project debt is ring-fenced at project-company level without group recourse, so a failed negotiation costs a project, not the platform. And once presales run, MaBV instalments fund the build as construction advances, keeping the equity ticket small on the residential schemes and confining conventional construction debt largely to Dresden, which sells in one piece at completion.

Added in July 2026, RC Industrie Immobilien SE (80% share) forms a third, still early pillar targeting small and mid-sized German commercial and logistics assets. Although there is a vetted pipeline of c. 180k sqm GFA, it remains a shell with no assets for the time being.

We initiate coverage with BUY and a € 2.80 PT based on SOTP (DCF for UK business, NPV for project). Notably, UK alone accounts for € 2.19 per share after group net debt and holding discount, 50% above the current price. On that basis, the German pipeline comes largely free.

You can download the research here: readcrest-capital-ag-2026-08-18-fullnoteinitiation-en-b5047
For additional information visit our website: https://www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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