Following the issues with the Sunraysia contract, added uncertainty around a NZ contract has led us to be more conservative with our forecasts. We expect weak interim profit and cash flow numbers. Earnings adjustments, together with a $7m Homeground impairment, sees our valuation fall to $0.90 (prior $1.10). While ahead of the current share price, we maintain a HOLD call; contracting is risky, and we would prefer current uncertainties to be resolved, particularly given the recent departure of the CFO, before revisiting.
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