MCE’s FY19 results provide reasons to be positive. Achieving full year revenue of $38m needed a much stronger 2H19, which also delivered the first positive EBITDA since 2H16. Broad trends in the offshore oil & gas space are positive, the order book is currently ~$25m, and MCE has a near-term opportunity pipeline in excess of $50m. Forecasting is a challenge, however recent macro trends suggest our top line growth forecasts in the coming years are achievable. Despite an NTA of $0.88 per share, our unchanged $0.40 valuation is a reasonable ~15x multiple of our FY21 net earnings forecast, and a HOLD call remains appropriate while we await evidence that our forecasts can be backfilled.
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