BPF.UN's sales have recovered to pre-pandemic levels, but the distribution per unit has not reached its previous levels yet. Therefore, there is room to raise dividends in the near term given the financial flexibility. BPF.UN also repurchased its units in the market for the very first time, which is encouraging. Overall, we like BPF.UN as a royalty income play, but at the same time the weak same-restaurant sales and a declining restaurant base are quite concerning, we will maintain our rating at “B-“, and we will be open for a downgrade if future operating results continue to weaken.

We think the fact that GDI’s share price has been under pressure recently due to a meaningful slowdown in acquisition activities, which historically contributed a significant portion of revenue growth. We still like the business model of GDI as a highly recurring revenue niche service provider. We are maintaining our rating at ‘B+’, while at the same time remaining open for a future downgrade if acquisition activities do not improve and organic growth slows down.

LMN owns a portfolio of high-quality VMS software with a 90% gross margin, well-run by a management
team with a decent track record of value creation and industry insight. The company is still quite small, but we think there is still a long runway for LMN to compound capital at high rates. Given management’s execution and the attractive economics of VMS businesses. Rating initiated at “B+”.