Oberon Capital has initiated coverage on Tooru (TOO) , arguing the AIM-listed health and wellness brands group is materially undervalued relative to the potential of its gluten-free portfolio and proposed Mylky acquisition. The broker highlighted the group’s strategy of building challenger wellness brands that could eventually attract larger strategic buyers.
The note points to Tooru’s ownership of gluten-free bakery brand Juvela, retail-focused OAF, plant-based nutrition brand Pulsin and plantain crisp brand Purely. Oberon said the company is attempting to replicate a proven consumer model where larger food groups acquire smaller fast-growing wellness brands once they achieve scale and distribution traction.
Oberon believes OAF is likely to become the group’s main growth engine over the next two to three years. The broker highlighted the brand’s rollout into Tesco and ASDA within months of launch, alongside its use of de-glutened wheat starch technology developed through Juvela’s prescription business. The broker said this provides a meaningful product differentiation in a competitive gluten-free market dominated by rice-flour alternatives.
The broker also noted that Juvela remains the core earnings contributor despite ongoing structural pressure from declining NHS gluten-free prescriptions. However, Oberon argued much of the prescription contraction has already occurred and said reduced NHS availability is increasingly shifting gluten-free spending into retail channels, potentially benefiting OAF.
Oberon said the proposed £12 million acquisition of Swedish plant-based milk machine business Mylky could significantly transform the scale of the group. Management estimates Mylky is currently operating at about €9 million annualised revenue with EBITDA of about €3.1 million. The broker described the business as a rapidly scaling, profitable e-commerce platform aligned with Tooru’s broader health and wellness strategy.
In valuation terms, Oberon noted Tooru currently trades on an enterprise value of about £8 million, including debt. The broker estimated Juvela and OAF alone could ultimately justify a valuation of roughly £24 million if OAF reaches £4 million annual revenue and achieves strong growth momentum.
Oberon expects the existing business to generate about £11 million revenue and £1 million EBITDA in 2026 prior to any contribution from Mylky, with a stronger operational step-up anticipated in 2027 as OAF scales further and Pulsin restructuring benefits flow through.
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Oberon’s initiation highlights the scale of Tooru’s ambition as it looks to build a portfolio of wellness and free-from brands capable of attracting buyers. However, near-term execution remains heavily tied to OAF’s supermarket rollout and the successful completion and integration of Mylky. If management can deliver sustained retail growth while improving profitability across the wider portfolio, the current valuation could begin to look increasingly modest.