DAVY VIEW

Our forecast revisions reflect a flatter revenue curve and lower anticipated operating margin through FY21. The latter assumes friction from the on-boarding of network costs prior to the ramp-up of customer orders. The key equity debate remains the extent to which the current pandemic alters consumption patterns and the point of purchase – investors are watching closely as to how retailers and suppliers respond. Both entities would benefit from a return to footfall in the higher margin convenience aisle and store perimeter. The allure of a 14x FY21 P/E and 1.3x EV/IC may be outweighed in the short term by inherently subjective debates.