While interims are broadly in line, this is overshadowed by a more cautious outlook versus the May update, with FY25 operating profit now guided to £38-40m (vs our £44.5m prior). The downgrade reflects softer consumer spend in core Foodservice leisure, a key revenue contributor. While disappointing given Kitwave’s positive track record, its long-term strengths - a scalable national platform, solid cash generation, and active M&A - remain intact. We view this as a short-term setback in an otherwise attractive equity story. We cut FY25 EPS by 15%, FY26/27 by 9% and 7% respectively, and lower our TP to 270p (10x Yr1 P/E). We move from Buy to Hold to reflect near-term uncertainty despite confidence in the long-term strategy.
