A step change in the number of rigs deployed during 1Q20 boosted revenue, although impacted margin due to mobilisation costs. With steady state operation at new projects taking longer than we previously expected, we have pared back FY20 forecasts to match guidance (EBITDA similar to FY19). SWK’s focus is on margins at existing projects, and gains here will be key to watch for in 2H20. The earnings skew to the latter part of the year does have positive FY21 implications, where our forecasts are conservative relative to Company targets. Our valuation of $0.30 (prior $0.32) underpins a SPEC BUY call.
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