Redcare Pharmacy Faces Key Debt Payment Amid Intensifying Market Competition

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As Redcare Pharmacy enters 2026, a substantial financial obligation is coming due. The company is set to make a final payment of €64.5 million on January 21 to settle a legacy convertible bond. This transaction concludes a significant refinancing effort, even as the firm contends with a sharp increase in competitive pressure following the recent market entry of drugstore chain dm. After its shares lost approximately half their value in the prior year, the MDAX-listed company's ability to withstand this new rivalry is under scrutiny.

The financial restructuring arrives at a pivotal moment for Redcare. On December 16, 2025, dm-drogerie markt launched its online platform "dm-med," directly challenging Redcare's core over-the-counter (OTC) medication business.

In response to this competitive threat, Redcare has initiated several strategic moves:
* The commissioning of a new high-performance logistics center in the Czech Republic on December 11, 2025.
* A focus on accelerating delivery times to Austria and Southern Germany.
* A stronger emphasis on differentiating its prescription medication (Rx) business, a segment where dm is not active.

Finalizing the Refinancing Chapter

The upcoming payment marks the conclusion of a comprehensive liability restructuring. Credholders exercised their right to call the original bond, which was issued in 2021. Throughout 2025, management actively reshaped the company's debt profile:
* Bond Repurchase: In April 2025, the company bought back portions of the old bond worth €157.9 million.
* New Issuance: Simultaneously, Redcare placed new convertible bonds totaling €300 million, which mature in 2032.
* Remaining Balance: Following the January payment, only €2.6 million of the original bond will remain outstanding.

These measures effectively extend the maturity profile of the company's debt by six years, providing Redcare with greater financial flexibility until 2032.

Ample Liquidity to Cover the Outflow

Despite the sizable payment, the company's financial reserves appear sufficient to handle the outflow without strain. As of September 30, 2025, Redcare reported liquid assets and short-term investments of €265.6 million. This represents an increase in net liquidity of nearly 50% compared to the end of 2024. This cushion is expected to absorb the January payment while preserving the firm's operational capacity for strategic investments.

Divergent Views from Market Experts

Redcare's equity was among the poorest performers in the MDAX during 2025, trading near €65 at the turn of the year—a level far below its 52-week high of €138.40. Analysts are divided on the stock's future trajectory, reflecting uncertainty over Redcare's capacity to defend its market share. UBS maintains a skeptical "Neutral" stance with a price target of €74, while Deutsche Bank sees significant potential, issuing a "Buy" rating with a target of €214.

Investors are now looking ahead to the next key date: March 4, 2026. On this day, Redcare will publish its full-year 2025 report and provide guidance for the current year. This release is anticipated to offer greater clarity on margin development within the newly intensified competitive environment.