Nichols has made good progress in diversifying UK sales so as to become less reliant on the UK grocery sector. At the same time the focus on value over volume and seeking to augment market share in the Midlands has strengthened the investment case. We estimate sugar tax risk to EPS a modest 3%. These features coupled with an attractive international growth angle should continue to support solid growth going forward and underpin the premium rating. A burgeoning net-cash pile offers additional growth optionality. We stay positive.
