PEA’s 1H18 EBITDA of $21m on $30m revenue was in-line with guidance and forecasts. The Company has reaffirmed full year guidance for $43-44m EBITDA with recently installed capacity coming on-line in the 2H. Recently, concern has centred on PEA’s long-term growth potential after losing out on a spate of newly awarded contracts and slow progress in Africa. However, we believe the current EV of circa $240m, trading on a 5.3x FY19 EBITDA multiple, to be undemanding for a business with the consistency that PEA offers. Therefore, we upgrade to a BUY, on a revised $0.70 valuation (prior $0.67).
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