In what has been a very challenging year with numerous headwinds, FY20 results are slightly ahead of recently upgraded estimates and clearly underline the benefits of operating leverage as VLG brands and volume throughput in Italy scale up. The 500bps uplift in the EBITDA margin to 19% included headwinds worth almost 300bps relating to covid costs and debtor provision (China) – both of which should not feature in the future. There is no news on M&A at this stage, but investors will be encouraged that shipments to China have recently recommenced.
