DAVY VIEW

Total Produce’s trading update highlights the resilient and defensive nature of its operating model. While it has modestly lowered full-year expectations, this is a strong performance against an unprecedented macro backdrop. Trading on just 5.6x trailing earnings, the equity is materially dislocated from its fundamentals. The group has ample liquidity and headroom over covenants while its supply chains remain fully operational. Geographic, category and channel diversification continues to benefit the group. We will pare our FY 2020 EPS by c.7-8%.