Dept of Defence is an important client to VNT comprising c18% of 1H24 revenue & slightly less on earnings basis considering 6.8% DS&I EBITDA margin < 8.1% group margin. More broadly, public sector work comprises c.75% revenue. Severe stock price move today reflective of market fears that VNT loses entirety of Defence-related work; we think thisis unlikely, particularly given a number of Defence contracts on foot with years left to run. Defence has also awarded two contracts worth $173m pa to VNT over past 18 months during which investigations by ACCC have been proceeding. VNT was also awarded by Defence "Base Services Contractor of the Year" in November. We note that VNT has a 30+ year relationship with Defence.
VNT Price at posting:
$3.69 Sentiment: Hold Disclosure: Held
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