SRG has continued to build its order book thanks to wins in the Asset Services segment, the latest of which is a $90m preferred tenderer award from Alcoa for work at its Kwinana alumina refinery. The addition of recurring revenue streams to the higher margin Asset and Mining Services segments is positive, and a pick-up in construction activity in coming periods would build significantly on this more consistent baseload. The latter segment continues to face a challenging environment in the short term however, and we pare back FY20 EBITDA by 5% as a result. Still, we believe the business is well set up for a medium-term recovery and maintain our BUY recommendation and $0.55 valuation.
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