Nichols is holding a Capital Markets Day today which will update on execution of the Group’s growth strategy. Ahead of this it has shared its medium-term financial ambitions - £225m revenue; 20% PBT margin (+250bps vs FY24e cons); and PBT of £45.0m (+50% vs FY24e cons). We will publish a more detailed note following the CMD, providing insight into opportunities/levers across the business units to drive faster growth, EPS scenario analysis and capital allocation options. The update comments that FY24 trading remains in line with management expectations. Whilst we make no forecast changes, we see the risk on the upside. Overall, we believe Nichols’ asset light, high margin and hugely cash generative model remains under appreciated on a cal’25 EV/EBITDA of 11x - Buy.
