DAVY VIEW

Total Produce’s interim results highlight the critical importance of the produce category to consumers and the relevancy of its operating model to B2B partners. Against an acutely challenging backdrop (and historical 20-25% exposure to the food service channel), flat like-for-like (LFL) sales through the first half is a stand-out performance. With a robust profit performance and more constructive outlook, we will nudge up our EPS by 2-3% (which captures an FX headwind). Trading on 8.1x FY 2020 EPS, there is a material dislocation between the equity and fundamentals and we reiterate our ‘Outperform’ rating.