GCS continued to pile on the cash, finishing the 1H with $42m net cash on the balance sheet. Whilst the 1H18 result was below our expectation, due mainly to lower than expected returns form the commercial and resources segments, we were positively surprised by the $16.6m operating cash inflow. GCS has substantially changed its business structure over the last 18 months, diversifying onto the East Coast and changing its product offering to be less capital intensive. The result is a more appealing business for investors in our view. We believe GCS has a strong pipeline of opportunity in the near-term and expect a stronger 2H. BUY maintained on a $1.00 valuation (prior $1.05).
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