High LeverageLeverage consistently above 1x increases financial vulnerability, elevating interest expense and refinancing risk. With high debt relative to equity, the company has limited balance sheet flexibility to invest or absorb shocks, which constrains strategic options and raises the probability of restructurings under adverse conditions.
Weak Cash GenerationPersistently negative free cash flow and poor cash conversion indicate the business struggles to generate internal funding. This forces reliance on external financing or asset disposal to meet obligations, limits capacity to invest in growth, and amplifies liquidity strain given the high leverage profile.
Sustained Net LossesOngoing net losses erode retained equity and impede reinvestment in the business. Without a clear path to sustained profitability, the company will face challenges attracting capital, retaining talent, and rebuilding margins, making recovery dependent on structural improvements to revenue or cost base.