After significant provisions DCG delivered a net loss of $74.9m in 1H20. The balance sheet deterioration since then is the key focus, threatening the firm’s viability and its ability to win work. Likely dilution from new capital initiatives, our earnings downgrades, heightened risk, and a current net debt position sees our valuation fall to $0.30 (prior $0.90) and we downgrade to SELL (prior HOLD) based on the last closing price. As part of a broader review, coverage will cease immediately post release of this note.
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