SMALL CAP IDEA: Tooru’s brands are winning shelf space, but the shares tell a different

Six months ago I wrote about Tooru, the AIM-listed health and wellness group, and flagged what looked like a glaring valuation disconnect.

Since then, the business has hit every milestone management set out. The shares have gone the other way.

At around 0.2p, Tooru’s market capitalisation sits at roughly £4 million. That number bears no relation to what is happening inside the company.

A trading update on Monday confirmed that Tooru’s operating subsidiaries are generating monthly gross revenue of around £1 million and underlying earnings (EBITDA) of £150,000.

That run rate points to annualised group revenue north of £12 million and EBITDA approaching £1.8 million.

Those are not projections plucked from a slide deck. They reflect actual trading in the first quarter of 2026, and management expects the figures to improve from here as OAF builds its retail footprint and Pulsin benefits from fresh investment.

Shares of health and wellness firm Tooru are telling a different story, says Ian Lyall

OAF is gaining serious traction

Juvela, the group’s established gluten-free bakery business, continues to trade well. The real momentum, though, is coming from OAF, its retail-facing brand.

When I last wrote about Tooru, OAF had just expanded its range in Tesco. It has since launched in Asda, with initial sales tracking ahead of expectations. New product lines, including Softie Sub Rolls, are being added to Tesco shelves.

The brand also appeared at the Allergy and Free From Show in Birmingham, where it drew strong engagement from consumers and retail buyers.

Industry data from The Grocer put supermarket free-from sales at £4.2 billion last year. So, OAF is carving out space in a category where demand is structural, not cyclical.

Pulsin is back on the front foot

Six months ago, Pulsin was a turnaround story. It is now a business returning to growth with improved margins, helped by new capital investment and a fresh contract manufacturing arrangement.

Its presence across Holland and Barrett and other retail channels gives it a platform. The task now is to build velocity, and the early signs suggest that is happening.

Mylky could change the shape of the group

In April, Tooru agreed terms to acquire Mylky, a Dutch e-commerce business that sells compact machines allowing consumers to make their own plant-based milk at home.

The deal, valued at £12 million, would be funded through a mix of £6 million in cash and debt, a £3 million loan note and £3 million in new Tooru shares. Those shares are priced at 0.77p, roughly four times the current market price, a detail that says something about where management believes the real value sits.

Mylky was founded in early 2024 and has scaled fast. Management expects it generated revenue of £6.4 million and EBITDA of £2.1 million in 2025. Trading in the first quarter of 2026 is ahead of budget, with the trailing 12-month run rate pointing to revenue of £7.7 million and EBITDA of £2.6 million.

The business operates across eight European countries, has more than 70,000 customers and generates strong cash flow. It remains subject to due diligence, financing and shareholder approval, but completion would add meaningful scale and earnings to the group.

The valuation gap is hard to explain

Oberon Capital, which initiated coverage on Tooru recently, estimated the existing business alone could justify a valuation of around £24 million if OAF reaches £4 million in annual revenue. The broker pegged the current enterprise value, including debt, at roughly £8 million.

Apply a conservative food sector EBITDA multiple of five to eight times to the current run rate and you get a range of £9 million to £14 million for the existing business. Add Mylky and the picture shifts again.

CEO Scott Livingston has pointed to thin trading liquidity, a low profile with institutional investors and poor understanding among market makers as factors behind the disconnect.

There is another consideration. The UK food and beverage sector is in the grip of a dealmaking revival. Private equity groups and cash-rich trade buyers are hunting for profitable, fast-growing brands in health and wellness categories.

The British PE and VC industry is sitting on an estimated £190 billion of dry powder. Businesses with the profile Tooru is building do not tend to stay undervalued for long when acquirers are circling.

The usual caveats apply

I can only report the story as presented. Retail is a brutal arena and supermarkets will drop underperforming brands without hesitation. The Mylky acquisition is not yet complete and carries execution risk. AIM stocks are illiquid and volatile. Investors should always do their own work.

But for those willing to look beneath the surface, the gap between what Tooru is doing and what the market is paying for it is striking.

For all the market’s breaking mid- and small-cap news go to www.proactiveinvestors.co.uk

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