We initiate coverage on Ampol at a time when convenience sites are executing well with upside from a better sales mix and more foodservice offerings. In the next two years the company should also experience a substantial lift in profitability in its fuels businesses as throughput recovers and capital projects are completed.

Lovisa reported 1H25 EBIT of $90 million, up 11%, slightly below consensus estimates of $92 million. With revenue growth stunted by flat comparable sales, gross margin was the standout, hitting a record 82.4% (up 170bp). The trading update signaled an improvement in trading momentum with LFL at 3.7% and the company is confident that the store rollout will reaccelerate. Cost growth gives us pause. Gross margins need to be maintained to offset cost growth if comparable sales don’t deliver, which is difficult with increasing competition. Given the lack of traction in Asia, we have removed the probability of an accelerated China rollout.