Boparan - comment

FY23 Q4 numbers were slightly above our expectations. Management is cautiously optimistic about margin improvement and resulting deleveraging in FY24. Boparan has managed this particular conjuring trick before when a refinance is imminent. It is also in the interests of the company’s supermarket customers. Boparan needs to continue to improve cash flow to ensure it can cover its interest costs. Full year revenue was £739m (£727m forecast), and Adjusted EBITDA was £40m (£31m) boosted by better-than-forecast poultry margins. Cash flow remains weak, albeit in line with our model. Excluding exceptional costs, Boparan generated £33m in cash before interest of £54.1min FY23. The cash gap was covered through the £20m Meals and Bakery disposal. There is a call at 1230 today, and we will update afterwards.