AVI managed to trim additional cost in 1H21 which we believe could serve the business well through the post-lockdown period. In our view, the key to earnings growth lies in the group’s ability to maintain or expand gross profitability which we believe could be under threat from short-term swings in soft commodity prices. The group’s core food business remains robust in our opinion, and our chief concern relates to its Fashion business and the degree to which the economic downturn could impact footfall and possibly lead to fair-value adjustments of Spitz.
