DAVY VIEW

With the Bakkavor acquisition set to complete on January 16th, we remain confident that the transaction represents a compelling value creation opportunity. The acquisition materially enhances group scale, strengthens competitive positioning and expands the scope for operational efficiencies across the combined platform. Our analysis indicates that the £80m cost synergy target is conservative and does not fully capture the scale of the opportunity. We now forecast £103m of cost synergies over three years, driving 25% and 30% EPS accretion in FY28 and FY29. Execution risk appears limited, and we see a clear pathway to leverage of below 1.5x by FY28. We reiterate our ‘Outperform’ rating and issue a revised price target of £3.25 (27% upside).