Why this stock?
In Focus: The Q426 trading update (17 June) confirmed c 6% l-f-l revenue growth and reported revenue of c £540m, with broad-based growth across all four lead markets (UK, ANZ, Nigeria and Indonesia). FY26 adjusted operating profit is now expected at, or slightly above, the top of the £53–57m range – upgraded twice from an opening £48–53m.
Turnaround delivering: Six years into CEO Jonathan Myers’ brand-building strategy, the ‘locally loved’ model is working. H126 delivered 9.5% l-f-l revenue growth with double-digit growth in adjusted operating profit and EPS. Net debt has been cut from more than £110m to less than £30m in a year, mainly via the $70m (c £48.5m) sale of the 50% PZ Wilmar edible-oils joint venture.
Valuation: On Edison/ LSEG Data & Analytics forecasts the shares trade in the low-to-mid teens on forwards earnings with a yield near 3.5–4% – still a clear discount to larger branded fast-moving consumer goods (FMCG) peers on high-teens multiples, despite faster forecast EPS growth (FY27 consensus c 13%).
Catalysts ahead: FY26 full-year results on 6 August 2026, a widely expected increase in the final dividend, further central-cost reduction and a falling interest charge to drive PBT are expected.
Why now?
Key takeaway: This is a re-rating story. Edison believes that as the certainty of high single-digit EPS growth builds through calendar 2026, the prospective P/E should expand towards the high-teens multiples enjoyed by branded FMCG peers such as Unilever, Reckitt and Haleon.
Drivers: Central costs are guided to fall £5–10m in FY26 with a further gain in FY27, and the interest charge is expected to drop from £13.8m (FY25) to £9.5m (FY26) and £5m (FY27) – delivering the bulk of the forecast PBT uplift. The group operating margin rose to 13.2% in H1 (from 10.8%) and has scope to expand further.
Mind the near-term optics: Reported EPS is broadly flat in FY26 (7.30p to 7.20p) because the effective tax rate steps up from 18% to 28% – a function of the Nigerian profit mix and the PZ Wilmar disposal being booked post-tax. This masks strong PBT progress and unwinds into c 13% EPS growth in FY27.
Risks addressed: Nigerian naira volatility remains the key risk, but management’s guardrails – a cap of c £20m of cash held in Nigeria and a 1.0–1.5x leverage target – materially reduce the group’s sensitivity to future devaluations. In the CEO’s words, the strategy is to ‘stay and play’ in Africa while capping the downside.
What’s next: Watch the 6 August results for the final dividend, the operating-profit outturn (top of, or above, £53–57m), net debt (<£30m) and any FY27 steer. The stated medium-term ambition is mid-single-digit like-for-like revenue growth and high single-digit EPS growth annually – a double-digit total shareholder return.
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