Sales and profits reached record levels in 1H (sales +9% and EBIT +26%), a remarkable achievement given last year’s bumper year in Consumer & Lifestyle. Strong cash management in the period is another key highlight. With this positive momentum continuing into 2H, ZTF now expects to deliver FY adj. PBT ahead of expectations we upgrade by c.5% with net debt also significantly reduced. Good progress is being made bedding in the new strategic framework set out at the recent CMD and today’s announcement of a JV in Vietnam significantly de-risks expansion plans. Our view is that under a new leadership team ZTF has been revitalised with a much clearer value creation proposition. Yet, this is far from being reflected in the current valuation with the shares trading on a sub 10x PER. Conviction BUY.
