Strong 1H21 revenue recovery to £329.9m (1H19 £335m), +45.2% on 1H20. Gross margins increased to 32.7% (1H20 32.3%) driven by proportionately more higher-margin residential, and 2Q21 inflation. The underlying operating margin at 5.3% was in-line with 1H19 (flat distribution and admin costs due to OIP implementation and restructuring activities offsetting wage inflation and additional costs). Underlying PBT of £16.7m was comparable to 1H19 (£16.8m). Average net funds of £30.5m ex-leases (vs average net debt of £8.6m in FY20) benefited from management’s creditable ability to maintain an inventory position, despite industry-wide supply issues. Resumption of normalised level of dividend payments. An FY21 interim dividend of 5.8p signals, in our view, confidence that the business is on-track to achieve the stated ambition of a 7.5% UK margin run-rate during FY23 through successful delivery of the OIP. Residential trading continues at a “pleasing” level, while Commercial remains subdued. No changes to forecasts. The 29 Jul’21 trading update prompted material P&L, dividend and target price upgrades (see note). Our view: FactSet consensus FY21 PBT has risen by c.20%+ YTD, driving share price outperformance of >25% over that time. July’s CMD revealed an addressable UK market of c.£3bn, supporting strong future revenue growth potential and, while we recognise that short-term headwinds have not fully disappeared (Covid, Brexit readjustment etc.), we see the market opportunity as significant and the OIP as a strong margin driver. Valuation and catalysts: We restate our Buy recommendation and DCF-derived target price of 620p.