Overall, this is a strong set of interim results with group sales +30% to £65m and adj. EBITDA up 14% to £7.3m. On a LfL basis (ex acq.), sales growth was c.24% and EBITDA growth c.30%, an excellent outturn in the current environment. Guidance has been reiterated, underpinned by a c.95% order book cover, and as such we leave our earnings estimates unchanged. A working capital outflow and acquisition spend drives a modest, £2.2m, net debt position in 1H24 (net cash £13m FY23) which is consistent with the movement in our FY24e assumptions (£7.3m net debt). We are BUYers of the shares as we think AVG has a proven “Pinpoint-Invest-Exit” (PIE) model and operates in end-markets with attractive structural growth opportunities (e.g: energy/nuclear, infrastructure, medical). In our view, the share price fails to reflect the potential value in the Group ahead of expected realisations as AVG moves towards the exit phase of its strategy for a number of its businesses. Shares have been weak in recent month (-15% rel. market) and present an attractive entry point in our view. BUY, TP 510p (unchanged)
