A positive and in line YE trading update from Nichols. It highlights the strategy (reinforced at the recent CMD) to grow the Packaged business and margins is delivering – FY24 PBT +11% and PBT margin +160bps. Performance in FY24 was underpinned by another strong showing from the dominant UK packaged business and good execution of the international growth strategy. The outlook for FY25 and FY26 is to maintain good top-line momentum and drive further margin enhancement. The shares are trading on a FY25 EV/EBITDA of 12.5x which is attractive for a capital light, branded drinks business with growing and diversified international earnings. In the current macro climate, Nichols’s defensive growth features is an added bonus too. Per the ambition set out at the CMD to grow PBT by 50% over the medium term, we have high conviction of >10% TSR per annum. We make no meaningful forecast changes and reiterate our Buy and 1440p TP. A Singer CM top-pick for 2025.
