Nichols has released an ahead of expectations FY update - a highly pleasing outcome given various headwinds over 2023. International was once again the standout performer whilst the OoH reset delivered benefits earlier than expected. We upgrade our FY23 PBT by 4% (7% cumulative since July) and conservatively nudge up FY24 by 2%. We also lift our 12m TP to 1320p (from 1240p). Following a difficult few years, we firmly feel Nichols has turned the corner. It enters 2024 with good momentum, inflationary pressures moderating and a more simplified strategy to revive growth. In this context we feel there is good value at current levels. The shares on 11.5x EV/EBITDA are trading at a 20% discount to the long-run average - Buy.
