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Investing.com -- Getlink stock edged down 0.2% on Thursday after the Channel Tunnel operator challenged a proposed increase in its UK Business Rates that could significantly impact its future costs and investment plans.
The company announced it had been notified by the UK’s Valuation Office Agency of a planned rate hike as part of a triennial review process. If implemented without changes to transitional relief, the increase would amount to €15 million in 2026 and represent a roughly 200% increase in Business Rates of €26 million over three years.
Getlink warned it would cancel some planned investments in the UK and pursue all available measures to challenge the increase if the proposal is confirmed. According to the Financial Times, the company typically passes on half of its business rates bill to rail operators.
The proposed rate increase could represent approximately 1% of Getlink’s forecasted EBITDA for fiscal year 2026 and about 2% of expected profit before tax, assuming a 50% pass-through to rail operators.
"We rate Getlink Sector Perform with a €17 price target. We expect an improvement rather than inflection in Eurotunnel’s performance. Our FY26E forecasts are ahead of consensus, with Eleclink positioned for a return to top-line growth. On our forecasts, FCF yields in FY26 will be relatively low (within the subsector) given elevated capex," according to RBC analysts.
There have been precedents for more favorable final outcomes than initially proposed in similar cases, and the company’s public challenge suggests management believes there is a reasonable chance of securing a more limited eventual increase.