2021 was a tough year which saw the non-repeat of highly profitable hand sanitiser sales, almost no Chinese sales and the impact of input/cost inflation. However, it successfully integrated 2 acquisitions, which enhance the portfolio and earnings quality, and locked in the planned synergies. With new distribution agreements (inc to China), and mitigations in place to claw back lost margin, VLG looks set to return to profitable growth. The platform is highly scalable and trades on just 5x EV/EBITDA falling to 4x, and offers a 12% FCF yield. Our target price increases to 66p after rolling forward to new FY23 forecasts. Buy.
