Excluding a £2m property disposal gain and £1m restructuring charge adjusted H1 PBT was £31.5m, bang in line with our forecasts (N+1E £31.5m), equating to growth of 2% but -2% YoY on a CER basis given the drags in the UK & Japan (as flagged), which we do not expect to recur helped by strategic, operational and regulatory factors. In Laundry, ARPU and supplier production capacity comfortably exceeds our growth scenario assumptions (see initiation for details). Combined, this underpins our view that ‘underlying’ profit growth is at an inflection point (H2E c+12% CER) which should drive outperformance and allow the stock to break out of its 4-year range. Our analysis indicates scope for the share price to step up to 278p in 12 months should the business track our 18% CAGR growth scenario. Buy.
