DAVY VIEW

The soft organic constant currency (OCC) revenue movement in May and June can be attributed to two issues: weakness in the UK ahead of the election and continued subdued volumes at National Signal after exceptional 2023 growth. While the organic upgrade cycle has paused on a cautious macro outlook, we upgrade our FY24E and FY25E adjusted EBITA by 1.5% and 2.6% respectively to reflect the inorganic contribution from the Trident Industries acquisition. We see the share price pullback from recent all-time highs as an opportunity to buy into the multiple-year, US infrastructure-driven compound growth tailwinds. We reiterate our ‘Outperform’ rating and 2,350p price target.