Nichols’ FY20 results show the challenges faced by the business last year, although it remained profitable and importantly retained its cash strength. Revenues were down 19% in the year, but this was largely attributable to one business. The Out of Home (OOH) operations, which historically have accounted for 30% of the group, reported a 61% decline, with customers closed for several months and then reporting reduced footfall during the few months when they were open. Understandably, profits were hard hit in this division. International and UK Packaged revenues were both broadly resilient, although there was some margin erosion from channel mix changes in the UK and increased investment in the Middle East following the imposition of a sweetened beverage tax. Hence, FY20 PBT was down 65% on the prior year, with EPS down by a similar magnitude. Given its cash position at year-end (£47m), the group did however declare a dividend, with a final payment of 8.8p. FY21 starts with COVID restrictions still in place; OOH channels are only expected to re-open in mid-May – unfortunately for the leisure trade, after the normally busy Easter break. The company has issued no guidance for FY21 given the reduced visibility, but we have revisited our forecasts. With OOH revenues reduced vs our previous estimates, we also trim FY21E PBT from £20.6m to £18.6m. EPS is 40.6p (vs 45p) and the company has indicated that in future it will pay a 2x covered dividend, so we forecast a FY21E dividend of 20.0p. Some reinvestment in working capital is likely in FY21 as channels re-open but, with improved profits, we expect net cash to remain above £40m. It might be optimistic to expect the OOH channel to fully recover given the financial strain that the enforced closures will have caused, so we only project profits recovering to close to £30m in FY23E.