OSK Research, Feb 6
TECHNICS surprised on the downside this quarter, with revenue coming in a third below expectation and achieving a breakeven performance at the bottom line. The first and last quarters of the financial year are typically the weakest with the monsoon season preventing offshore work, but the $11.2 million showing is weaker than our seasonally adjusted $17 million expectation, after factoring in the loss of revenue from de-consolidating the Norr Offshore Group.
On the bright side, margins improved to 44 per cent. We are cutting our revenue forecast by 15 per cent, while reducing our EPS forecast by 10 per cent. Downgrade to "neutral" with a target price of $0.95.
NEUTRAL
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