This morning’s Q1 update highlights a solid start to FY’16, in line with expectations. The main bright spot was the UK which saw strong growth in volumes after a number of quarters of lower YoY volumes in FY’15. The Middle East benefited from an enlarged fleet which drove acceleration in revenue growth as growth in the UAE, Kuwait, Oman and Qatar more than offset a decline in Saudi. Additional fleet investment in FY’15 has impacted margins, but this is expected to improve over the course of the year. Lavendon’s share price has fallen around 6% since we moved to Hold on 18th March. The Group’s valuation looks undemanding, and we believe attractive on a medium to long term view. In the near term, however, we expect Middle East uncertainty and the resultant risk to consensus forecasts to continue to weigh on the shares. We therefore remain at Hold.