Nichols’ Q1 trading update brought no real surprises, with revenues down by 5.9%. However, it was encouraging to see a solid start to the year from the businesses outside of the “Out of Home” sector (OOH). Understandably, with hospitality venues in lockdown in Q1, this division was severely restricted, reporting a 91.9% revenue decline. Encouragingly, Nielsen data showed the Vimto brand up 4.6% in the UK, outperforming the soft drink market (quoted at +3.2%). This was against some tough comparatives – March last year saw panic buying in retail. The revenue growth was underpinned by discounters and multiples; cash & carry was down due to the hospitality hit/lockdown. International also reported a double digit revenue advance, with increases reported by all three regions – USA, Africa and Middle East. Middle East was helped by the phasing of deliveries ahead of Ramadan. There are fewer (social) restrictions in place this year than last through the Ramadan month, and sales into the trade looked encouraging. However, a better idea of the region’s performance will only come once we know the sell-through in the market. UK hospitality is starting to re-open (for indoor venues) only from mid-May, so 1H will still lose a large part of its OOH revenue, but this should start to recover through the summer, assuming no further lockdowns. On valuation, we feel the stock has run a little ahead of trading – as a popular IHT investment, this can occasionally be the case. We set our TP using the average NTM EV/EBITDA (pre-COVID) of 15.5x and apply this to FY22E EBITDA. This suggests 1350p, which is up on our previous level, but still below the current share price. Hence, we move to SELL, but note that this is on valuation grounds, rather than any implied criticism about the business/strategy.