EKF reports a positive start to the year, as the focus on higher margin and higher growth potential areas begins to pay off. Initially, this is being seen in improving margins and Adj EBITDA in Q1 is reported to be up ~20% YoY. Key business lines in both Point-of-Care (HemoControl) and Life Sciences (BhB) have both returned to growth and activity levels in the new fermentation facility are scaling up as expected. We make no change to our forecasts at this stage, but should the current trading patterns be sustained, we should be in a position to upgrade later in the year. Even on our conservative estimates, EKF trades on an FY24 EV/EBITDA of 10.9x, falling to 8.8x in FY25 (equivalent to a 3% FCF yield, rising to 5%). We therefore reiterate our Buy recommendation and 36p TP.
