SRG delivered a solid result ~5% ahead of our earnings expectations. Strong conversion of earnings to cash put the Company in a net cash position at period end. This was despite the acquisition of Diona, which on its early performance looks to be a strategically sound addition to the stable. The order book has climbed to a record, Diona has added diversity, and recurring revenue of ~80% provides confidence that SRG can maintain its momentum. BUY maintained on an upgraded valuation of $1.54 (prior $1.43).
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