After the Interims in November, we said that forecast risk was higher due to the c37:63 H1:H2 PBT weighting, but that management was confident of achieving this. Unfortunately, this has not proved possible and results for FY18 are now anticipated to be significantly below previous expectations. Forecast downgrades are 27% off PBT in both FY18 and FY19. Forecast net debt of £32.9m is 2.1x EBITDA and well within covenant levels (2.75x). The FD and the Chairman are to leave and Mark Rollins, highly regarded by us from his time at Senior, becomes Chairman. There are good businesses within the Group, but there is a long road of confidence rebuilding ahead. We reduce our target price to 91p (P/E of 10x FY18) and move to Hold.
