Kendrion — Recovery in full swing

Kendrion (AMS: KENDR)

Last close As at 20/06/2024

EUR14.50

0.72 (5.22%)

Market capitalisation

209m

More on this equity

Research: Industrials

Kendrion — Recovery in full swing

Kendrion’s H121 results showed a strong recovery after the negative impact of the pandemic on the H120 results, with its Automotive division growing revenues organically by 29% y-o-y and Industrial by 15% y-o-y. Margins also recovered, driven by operating leverage. Despite short-term uncertainty about supply chain constraints and the impact of higher raw materials prices, underlying trends such as electrification and energy transition continue to support underlying growth. We raise our estimates and expect an EPS CAGR of 37% in 2021–23e. The unweighted average of our three valuation methods points to a fair value of €29 per share.

Johan van den Hooven

Written by

Johan van den Hooven

Analyst

Industrials

Kendrion

Recovery in full swing

H121 results review

Industrial engineering

31 August 2021

Price

€24.35

Market cap

€363m

Net debt (€m) at 30 June 2021

113

Shares in issue

14.9m

Free float

49%

Code

KENDR

Primary exchange

Euronext Amsterdam

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(0.2)

21.1

114.9

Rel (local)

(1.4)

10.1

54.5

52-week high/low

€24.60

€8.84

Business description

Kendrion develops, manufactures and markets high-quality electromagnetic systems for automotive (52% of revenues) and industrial applications (48%). The geographical spread of revenues is Germany 39%, other Europe 30%, the Americas 15% and Asia 16%.

Next events

Q321 results

2 November 2021

Analyst

Johan van den Hooven

+44 (0)20 3077 5700

Kendrion is a research client of Edison Investment Research Limited

Kendrion’s H121 results showed a strong recovery after the negative impact of the pandemic on the H120 results, with its Automotive division growing revenues organically by 29% y-o-y and Industrial by 15% y-o-y. Margins also recovered, driven by operating leverage. Despite short-term uncertainty about supply chain constraints and the impact of higher raw materials prices, underlying trends such as electrification and energy transition continue to support underlying growth. We raise our estimates and expect an EPS CAGR of 37% in 2021–23e. The unweighted average of our three valuation methods points to a fair value of €29 per share.

Year end

Revenue (€m)

EBITDA*
(€m)

EPS*
(€)

DPS
(€)

EV/EBITDA
(x)

P/E
(x)

12/19

412

43.8

0.94

0.00

8.7

25.9

12/20

396

44.6

0.79

0.40

8.3

30.8

12/21e

452

58.5

1.30

0.65

8.2

18.7

12/22e

482

65.0

1.63

0.82

7.2

14.9

Note: *EBITDA and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Almost back to normal

Despite the ongoing effects of the pandemic and supply chain constraints, Kendrion reported a strong recovery in H121, with the automotive and industrial segments almost back to normal levels. Organic revenue was up 22% y-o-y in H121 (41% in Q2 and 6% in Q1). All three business groups reported strong organic revenue growth in H121, ie automotive 29%, industrial brakes 15% and industrial actuators & controls 14%. The operating leverage effect of this higher revenue resulted in a margin recovery of 240bp to 13.6%.

Long-term trends remain in favour

Kendrion expects current positive economic activity levels to continue, but management is cautious about the impact of supply chain constraints and volatile order patterns. Underlying trends, such as autonomous driving, electrification, emission reduction and industrial automation, continue to support underlying growth. We have raised our estimates after the stronger than expected results in H121 and now expect 14% revenue growth in 2021 versus 10.5% previously, with a stronger improvement in the EBITDA margin (+160bp versus 110bp previously). We expect sales growth of 6–8% in 2021–23e and a 270bp improvement in the EBITDA margin to 14.0% in 2021–23e, mainly driven by operating leverage.

Valuation: Different methods all point at upside

Our valuation of Kendrion is based on three different methods: historical multiples, discounted cash flow and peer comparison. We have raised our estimates, which has a positive effect on all three methods, the average of which now points at a value of €29.0 per share, up from €28.2 previously. Kendrion is valued at a 10% discount to peers based on 2022e EV/EBITDA, which we think could diminish over time when the company demonstrates accelerating growth and higher profitability.

H121 results: On track for full recovery

Kendrion’s H121 results showed a clear recovery after the negative impact of the pandemic on the H120 results. Revenues increased by 21% y-o-y to €234.6m and included a small negative exchange rate effect of around 1%. Underlying demand in the different sectors was strong, although was somewhat held back by the impact of swings in demand and delays as a result of supply chain constraints (limited supply of semiconductors and various commodities including steel). Organic growth showed a clear improvement throughout the first half with 41% y-o-y growth in Q2 after the 6% y-o-y growth in Q1, resulting in 22% y-o-y growth in H121. The recovery was most pronounced in automotive, which was hardest hit during the pandemic, particularly in Q220. After organic growth of 4% y-o-y in Q121, automotive significantly recovered in Q221 from last year’s lows with 67% y-o-y organic growth. Recovery was driven by passenger cars and trucks, while the market for long-haul coaches remained weak due to the prolonged impact of the pandemic. The Industrial division also continued its recovery with around 15% y-o-y organic revenue growth in H121 after 8% y-o-y growth in Q121. Industrial brakes showed 18% y-o-y organic growth in Q2 after 11% y-o-y in Q1, benefiting from the acceleration in electrification in segments such as wind power, robotics and intralogistics. Industrial actuators & controls also showed stronger growth in Q2 vs Q1, ie 24% y-o-y vs 5% y-o-y. Higher demand was driven by the medical and machinery automation segments, while the aerospace and textiles segments continued on a lower level.

Kendrion reported 12% y-o-y revenue growth in its operations in China, which is below the growth rates of recent years, but this was due to the strong comparison base as last year wind power benefited strongly from governmental subsidies (particularly in Q2 and Q3). To fulfil strong demand in China, Kendrion is constructing a new plant, which will double capacity towards 28,000m2. Construction will start soon and the plant will be fully operational after the summer in 2022.

Normalised EBITDA recovered strongly by growing 46% y-o-y to €31.9m. Growth was driven by operating leverage from the higher revenue level and resulted in a margin increase of 240bp to 13.6%. Margin improvement in automotive was as expected due to the overall market recovery but we were impressed by the very strong 17% margin in Industrial, 260bp higher compared to last year. We believe that INTORQ (acquired in early 2020) is performing better than anticipated at the time of the acquisition. Kendrion does not provide divisional results on a quarterly basis, but does provide organic revenue growth by division (see Exhibit 1).

Exhibit 1: Kendrion quarterly results

€m

Q120

Q220

H120

Q121

Q221

H121

Industrial

97.7

111.6

Automotive

97.0

123.0

Total revenues

109.7

85.0

194.7

115.3

119.3

234.6

Industrial

-11%

-18%

-14%

8%

21%

15%

Automotive

-12%

-44%

-28%

4%

67%

29%

Total organic revenue growth

-12%

-34%

-23%

6%

41%

22%

Industrial

14.2

19.1

Automotive

7.6

12.8

Total EBITDA normalised

21.8

31.9

Industrial

14.5%

17.1%

Automotive

7.8%

10.4%

Total EBITDA margin

 

 

11.2%

 

 

13.6%

EBIT reported

5.0

0.3

5.3

9.1

8.8

17.9

Net profit reported

3.0

0.0

3.0

5.9

5.4

11.3

Net profit normalised

4.7

1.1

5.8

6.4

5.5

11.2

EPS reported

0.20

0.00

0.20

0.40

0.36

0.76

EPS normalised

0.31

0.07

0.39

0.43

0.37

0.75

Source: Kendrion, Edison Investment Research

After several years of restructuring charges (to simplify the organisation) there were no material exceptional charges in H121, thus the normalisation at EBITDA level was negligible. Normalised net profit almost doubled to €11.2m, reflecting EPS of €0.76.

Kendrion’s free cash flow in H121 was comparable to last year at -€4m, mainly caused by higher working capital levels compared to year-end 2020. Net debt of €113m was €17.8m below the previous year although increased from €110m in Q121, largely due to the cash portion of €4m of the dividend payment. Net debt/EBITDA reduced slightly from 2.3x in Q1 to 2.1x in in Q2, which is well within the covenant of 4.75x at the end of Q2 and the long-term covenant of below 3.25x from 30 September 2021. The equity ratio increased 330bp y-o-y to 46.6%.

Further increase in estimates

Although Kendrion expects current positive economic activity levels to continue, it is cautious about the impact of supply chain constraints and volatile order patterns. The China operation is further expanding its pipeline in automotive and industrial and the company is on track to expand capacity in China from H222. Underlying trends, such as energy transition and electrification, continue to support ongoing underlying growth.

Kendrion’s medium-term targets for 2025 are unchanged: organic revenue growth of at least 5% on average pa and an EBITDA margin of at least 15% (13.6% in H121). Assuming that the company will achieve these targets, this delivers revenues of at least €625m in 2025 and EBITDA of at least €94m (CAGR of 16% versus FY20).

We have further increased our estimates after the better than expected Q221 results and now expect revenue growth of 14% in FY21 versus 10.5% previously, with Automotive growing 16% and Industrial 12%. We previously assumed that the anticipated market recovery would be spread over 2021 and 2022, but the recovery at Kendrion in 2021 seems stronger than we previously expected. IHS Markit expects 9–10% growth in automotive in both 2021 and 2022, after which the market is expected to recover to 2018 levels by 2024. Within automotive, much stronger growth is expected in electronics and software, which is Kendrion’s area of focus, with relatively new products such as active damping systems, AVAS sound systems and sensor cleaning systems, for which it signed a partnership agreement with an automotive tier one company to offer customers a complete cleaning system (production expected to start in 2024). As of FY22, we expect overall revenue growth of 6–8%, driven by underlying market trends and new products coming to market.

On increased revenues, we have also increased our EBITDA estimates. We expect a 270bp improvement in the EBITDA margin to 14.0% in FY21–23e (previously 13.7%), largely driven by operating leverage. The company seems well on the way to achieving the targeted 15% EBITDA margin in 2025. The stronger than expected margin in Industrial of around 17% ‘only’ requires automotive to recover profitability to around 13%. This level was last realised in 2017, so it does not seem an unrealistic expectation for it to be repeated over the next few years. The CAGR in our estimated EPS in 2021–23e is 37% (was 34%).

Exhibit 2: Change in estimates

€m

2021e

2022e

2023e

Old

New

Change

Old

New

Change

Old

New

Change

Sales

438

452

3.2%

478

482

0.9%

513

518

0.9%

EBITDA normalised

54.1

58.5

8.2%

62.9

65.0

3.4%

70.4

72.5

2.9%

EBITDA margin

12.3%

12.9%

13.2%

13.5%

13.7%

14.0%

EBITA margin

6.7%

7.6%

7.8%

8.4%

8.6%

9.1%

Net profit adjusted

16.4

19.4

18.6%

22.7

24.4

7.4%

28.3

29.7

4.8%

EPS adjusted (€)

1.10

1.30

18.5%

1.52

1.63

7.4%

1.90

1.99

4.8%

DPS (€)

0.55

0.65

18.5%

0.76

0.82

7.4%

0.95

0.99

4.8%

Source: Edison Investment Research

Valuation

To value Kendrion, we take the unweighted average of three valuation methods: historical multiples, discounted cash flow (DCF) and peer comparison. Please refer to our initiation note for more details.

We have increased our estimates after the stronger than anticipated H121 results, which has a beneficial effect on all three valuation methods. Using EV/EBITDA in 2022e, Kendrion is currently valued at a discount of 16% compared to its historical valuation. We maintain our assumption that a valuation in line with its historical multiples is justified, given that current profitability is in line with the historical average, which points to a value of €30.5 per share (versus €29.0 previously). In our DCF model, we have left our assumptions unchanged, but on a slightly higher tax rate we arrive at a value per share of €28.8 versus €29.4 previously.

For the peer group comparison, we have not changed our assumption that a valuation in line with its peers is merited and, using EV/EBITDA in 2022e, this currently delivers a value per share of €27.9 (was €26.2). The updated unweighted average of these three valuation methods points to a valuation of €29.0 per share, up from €28.2 previously (see Exhibit 3).

Exhibit 3: Valuation methods Kendrion

Valuation method

Edison assumptions

Equity value per share (€)

Historical valuation

2022e EV/EBITDA in line with historical multiples

30.5

DCF

Terminal growth 1.5%, terminal EBITA margin 7.5%

28.8

Peer group

2022e EV/EBITDA in line with peers

27.9

Average value per share

29.0

Current share price

24.4

Upside/(downside)

19%

Source: Edison Investment Research

Exhibit 4: Peer comparison

Currency

Share
price

Market cap (local FX)

EV/Sales (x)

EV/EBITDA (x)

EBITDA margin

2021e

2022e

2023e

2021e

2022e

2023e

2022e

Aalberts

52.62

5,798

2.0

1.9

1.8

10.4

9.7

8.9

19%

Emerson Electric

US$

104.77

62,632

3.4

3.2

3.0

14.9

13.3

12.5

23%

SKF

NOK

219.5

99,202

1.4

1.3

1.2

8.0

7.3

6.8

18%

TKH

51.5

2,129

1.6

1.4

1.3

10.8

8.9

7.7

15%

Industrial average

2.1

2.0

1.8

11.0

9.8

9.0

19%

BorgWarner

US$

43.49

10,428

1.1

1.0

0.8

7.1

6.2

5.4

16%

Continental

114.9

22,897

0.8

0.7

0.7

6.4

5.1

4.6

14%

ElringKlinger

14.01

888

0.9

0.8

0.7

6.8

6.2

5.6

13%

Hella

60.62

6,736

1.0

1.0

0.9

8.2

7.6

6.6

13%

Automotive average

1.0

0.9

0.8

7.1

6.3

5.5

14%

Universe average

1.5

1.4

1.3

9.1

8.1

7.3

16%

.

Kendrion

24.65

364

1.1

1.0

0.9

8.2

7.2

6.3

14%

Premium/(discount)

-31%

-31%

-33%

-10%

-10%

-13%

Assumed premium/(discount)

0%

0%

0%

0%

Implied value per share (€)

38.7

39.5

27.9

29.1

Source: Refinitiv, Edison Investment Research. Note: Prices as at 29 August 2021.


Exhibit 5: Financial summary

€ m

2018

2019

2020

2021e

2022e

2023e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

448.6

412.4

396.4

452.2

481.7

518.0

Gross Profit

211.9

193.3

191.0

218.9

232.7

251.3

EBITDA normalised

58.5

43.8

44.6

58.5

65.0

72.5

EBITDA reported

49.7

38.1

40.2

56.5

64.0

72.5

Depreciation & Amortisation

(23.1)

(24.0)

(25.7)

(24.3)

(24.8)

(25.4)

EBIT normalised

35.4

19.8

18.9

34.2

40.2

47.1

Amortisation of acquired intangibles

(2.3)

(2.2)

(4.4)

(3.6)

(3.6)

(3.6)

Exceptionals (Edison definition)

(8.8)

(5.7)

(4.4)

(2.0)

(1.0)

0.0

EBIT reported

24.3

11.9

10.1

28.6

35.6

43.5

Net Interest

(3.1)

(0.9)

(4.4)

(3.8)

(3.3)

(2.8)

Participations

(0.1)

0.0

0.0

0.0

0.0

0.0

Profit Before Tax

21.1

11.0

5.7

24.8

32.3

40.7

Reported tax

(7.3)

(2.7)

(1.4)

(6.9)

(8.7)

(11.0)

Profit After Tax

13.8

8.3

4.3

17.9

23.6

29.7

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

22.6

12.6

11.7

19.4

24.4

29.7

Net income (reported)

13.8

8.3

4.3

17.9

23.6

29.7

Average number of shares (m)

13.4

13.5

14.8

14.9

14.9

14.9

Total number of shares (m)

13.5

14.9

14.9

14.9

14.9

14.9

EPS normalised (€)

1.69

0.94

0.79

1.30

1.63

1.99

EPS reported (€)

1.03

0.62

0.29

1.20

1.58

1.99

DPS (€)

0.87

0.00

0.40

0.65

0.82

0.99

Revenue growth

-2.9%

-8.1%

-3.9%

14.1%

6.5%

7.5%

Gross Margin

47.2%

46.9%

48.2%

48.4%

48.3%

48.5%

EBITDA Margin

13.0%

10.6%

11.3%

12.9%

13.5%

14.0%

Normalised Operating Margin

7.9%

4.8%

4.8%

7.6%

8.4%

9.1%

BALANCE SHEET

Fixed Assets

246.4

244.8

299.6

301.1

304.0

303.0

Intangible Assets

116.1

115.5

158.1

154.7

151.5

148.4

Tangible Assets

113.6

111.4

118.7

123.6

129.7

131.8

Investments & other

16.7

17.9

22.8

22.8

22.8

22.8

Current Assets

128.9

113.2

129.5

153.1

165.3

181.4

Stocks

63.5

56.3

61.7

72.6

76.8

82.1

Debtors

48.0

42.9

47.2

61.9

66.0

70.9

Other current assets

7.2

6.9

7.6

7.8

8.3

8.9

Cash & cash equivalents

10.2

7.1

13.0

10.8

14.2

19.4

Current Liabilities

81.2

73.8

87.9

106.1

112.3

119.8

Creditors

41.7

41.3

44.0

57.7

61.5

66.1

Other current liabilities

27.3

26.9

31.9

36.4

38.8

41.7

Short term borrowings

12.2

5.6

12.0

12.0

12.0

12.0

Long Term Liabilities

112.0

80.7

137.8

132.8

127.8

117.8

Long term borrowings

78.5

48.9

104.2

99.2

94.2

84.2

Other long term liabilities

33.5

31.8

33.6

33.6

33.6

33.6

Shareholders' equity

182.1

203.5

203.4

215.3

229.2

246.8

Balance sheet total

375.3

358.0

429.1

454.2

469.3

484.4

CASH FLOW

Op Cash Flow before WC and tax

51.4

36.1

40.6

56.5

64.0

72.5

Working capital

(8.3)

13.0

5.4

(7.6)

(2.7)

(3.3)

Tax

(4.2)

(6.1)

(1.3)

(6.9)

(8.7)

(11.0)

Net interest

(2.2)

(2.1)

(2.9)

(3.8)

(3.3)

(2.8)

Net operating cash flow

36.7

40.9

41.8

38.1

49.4

55.4

Capex

(31.4)

(20.0)

(16.0)

(29.4)

(31.3)

(28.0)

Acquisitions/disposals

(2.6)

0.1

(78.2)

0.0

0.0

0.0

Equity financing

(6.6)

23.3

0.0

0.0

0.0

0.0

Dividends

(5.8)

(8.1)

0.0

(6.0)

(9.7)

(12.2)

Other

(0.2)

(3.1)

(3.4)

0.0

0.0

0.0

Net Cash Flow

(9.9)

33.1

(55.8)

2.8

8.4

15.2

Opening net debt/(cash)

70.6

80.5

47.4

103.2

100.4

92.0

Closing net debt/(cash)

80.5

47.4

103.2

100.4

92.0

76.8

Source: Kendrion, Edison Investment Research


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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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Fulham Shore — Hungry for more

Fulham Shore has hit the spot with a positive trading update, a forceful endorsement of post-pandemic growth opportunities and confirmation of its own resources and ambition. In the eight weeks to 15 August sales showed impressive resilience (up 8%+ on 2019) despite exposure (almost 25% of sites) to subdued city centres (sales down 41%) as well as continued restrictions in the first half of the period. Increasing site availability and extensive savings in rents and capital costs on COVID-19 fallout look set to return openings to 2019 levels (10 due this year) and in the medium term a step change in estate size (a further 150+ locations across the UK plus international franchising). A cash-generative model with strong finances (£3.5m net cash with £28m headroom) should back this ambition.

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