Corporate Credit Rating 2025 for ZKL INVEST LTD: A3- (Affirm)

modefinance published the Solicited Corporate Credit Rating of ZKL INVEST LTD on their website and the rating assigned to the entity is A3- (Affirm). The analysis revealed that the company's capacity to meet its commitment on financial obligations is strong.

The Company ZKL INVEST LTD was founded in 2017 by Mr. Agostino R. Luongo. It is based in the UK and operates in the surety and credit granting market. ZKL’s business involves arranging bonds and guarantees for companies across various industries, with a particular focus on tender guarantee market in construction sector.

The Company – regulated by the Financial Conduct Authority - has built strong relationships with its clients, allowing it to offer effective risk management solutions. Through collaboration with a select group of companies in the construction industry, the Company has developed an in-depth understanding of their business models, thereby reducing credit risk. Since November 2022, ZKL has also expanded its operations to Romania by establishing new partnerships. Through structured processes and meticulous Internal Audit and Underwriting procedures, ZKL maintains a complete absence of claims procedures and effectively manages risk, ensuring full compliance with the regulatory standards set by the Financial Conduct Authority (FCA). These factors have contributed to a robust level of trust in the market towards ZKL.

ZKL INVEST LTD confirms an overall sound financial and operational standing. The company’s capital and financial structure is conservative and robust, with nearly all assets financed through equity, which amounted to EUR 22,55 million as of 31 January 2025, reflecting a year-on-year increase of 6.26%. The company reports no financial debt.

The vast majority of the company’s assets (EUR 23,43 million) consist of investments in German government bonds, which ensure a steady inflow of funds and may, if necessary, be used to cover potential liabilities arising from guarantees issued in favor of client companies.

The revenue structure is primarily composed of fees related to guarantee services and financial income from fixed-income securities. In 2024, this structure supported revenue growth from EUR 1,81 million to EUR 2,34 million. Notable improvements were observed in the gross margin, which rose from EUR 1.24 million to EUR 1.79 million, and in EBITDA, which increased from EUR 621 thousand to EUR 893 thousand, corresponding to a profitability margin of 38%. The fiscal year closed with a net profit of EUR 961 thousand. Furthermore, the company has recorded a good performance in terms of return on invested capital and net profit margin.

During the reporting period, the Company strengthened its governance and internal control framework compared to the previous year. As of today, it is managed by a Board of Directors consisting of three members, chaired by Mr. Agostino Raffaele Luongo, who also serves as Chief Executive Officer. Mr. Luongo is the sole shareholder of FPYIC GROUP CORP, which in turn is the sole shareholder of ZKL. The Company’s legal and IT departments are supervised by qualified professionals. Furthermore, as of January 2025, an Internal Audit Officer has been appointed. ZKL’s financial statements are audited by a certified professional audit firm.

In 2024, ZKL continued to demonstrate a strong market positioning in terms of size and solvency. With regard to profitability, the Company’s performance ranks near the median of its sector peer group, which is of adequate size. The analyzed peer group appears to be adequately capitalized, although it shows a financial leverage ratio that is not fully balanced. ZKL maintains sound financial equilibrium, supported by efficient management of current assets and liabilities. In terms of profitability, the peer group reports ROE and ROCE ratios at satisfactory levels.

The surety market in Europe is set to grow in the coming years, with Italy and Germany holding the largest shares. Collaboration between banks and surety companies is a key trend, enabling better risk management and creating new development opportunities for market participants. Regulatory changes are encouraging banks to share risks with surety providers in order to optimize portfolio management. The market is closely linked to the construction sector, which has maintained strong demand even during the pandemic. By 2024, supported by economic recovery and stable interest rates, the market value is expected to return to pre-pandemic levels.

At the macroeconomic level, 2024 was marked by modest GDP growth, driven by tight financial conditions and high interest rates in the Eurozone, with inflation hovering around 2%. Global economic growth is expected to slow in 2025, potentially impacted by heightened geopolitical tensions and further tightening of U.S. trade policy.

The present Corporate Credit Rating is published by modefinance in accordance with EU Regulation No. 1060/2009 and subsequent amendments. 

The present rating is solicited and is based on both private and public information. The rated entity and/or related third parties have provided all private information used. modefinance had access to some accounts and other relevant internal documents of the rated entity and/or related third parties. Solicited and unsolicited ratings issued by modefinance are of comparable quality, as the solicitation status has no effect on methodologies used. More comprehensive information on modefinance Corporate Credit Ratings are available at http://cra.modefinance.com/en

The present Corporate Credit Rating is issued on MORE Methodology 2.0 and Rating Methodology 1.0. A comprehensive description of both methodologies, as well as information on modefinance Rating Scale and Mappings, is available at http://cra.modefinance.com/en/methodologies.

For information on historical default rates of modefinance Corporate Credit Ratings please refer to ESMA Central Repository and ESMA European Rating Platform.

modefinance refers to default as a company under bankruptcy, or under liquidation status, or under administration or for which missed payments on a financial obligation are officially recorded.

The quality of the information available on the rated entity and used to determine the present rating was judged by modefinance as satisfactory. Please note that modefinance does not perform any audit activity and is not in a position to guarantee the accuracy of any information used and/or reported in the present document. As such, modefinance can accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect.

The present credit rating was notified to the rated entity in order to identify potential factual errors, as prescribed by the CRA Regulation.

Deadline for the appeal process expired without the notification of factual errors by the Rated Entity.

The rated entity bought ancillary services provided by modefinance (preliminary rating). modefinance ensures that such situation does not imply a conflict of interest in the issuance of the present credit rating.

The rating action issued by modefinance was performed independently. The analysts, members of the rating team involved in the process, modefinance Srl and its members and shareholders do not have any conflicts of interest in relation to the Rated Entity and/or Related Third Parties. If in the future a potential conflict of interest is identified in relation to the persons reported above, modefinance Ratings will provide the appropriate information and if necessary, the rating will be withdrawn.

The present Credit Rating is an opinion of the general creditworthiness that modefinance issues on the rated entity, and should be relied upon to a limited degree. The issued rating is subject to an ongoing monitoring until withdrawal.

Head Analyst - Elisa Graffi, Rating Analyst
elisa.graffi@modefinance.com

Responsible for Rating Approval - Pinar Dilek, Rating Process Manager
pinar.dilek@modefinance.com