Macmahon Has Capital Management Options, Says Deutsche Bank --...

Macmahon Has Capital Management Options, Says Deutsche Bank -- Market Talk
31/08/2015 10:55AM AEST

0055 GMT [Dow Jones] The outlook for engineering contractor Macmahon Holdings (MAH.AU) may be challenging but at least its balance sheet is strong, says Deutsche Bank. The broker, which upgrades its price target by 40% to A$0.07/share, says Macmahon's A$74 million in net cash gives it options for capital management in the absence of major contract wins. "Management has done well in stabilizing the business through a severe downturn, implementing cost cutting measures and shedding assets, leaving the balance sheet in a very strong position," analyst Wassim Kisirwani says. Still, the broker retains a hold call on Macmahon. "Notwithstanding the tender pipeline and the stock's large discount to net tangible assets, we feel that conditions remain extremely challenging, with further risks to revenue and margins," Kisirwani says