The company has put more than 40% of its UK staff on leave as channel partners there temporarily close or reduce their purchases.
Assuming the UK represents around 60% of the wider EMEA business and the curtailment lasts for the entire quarter, UBS estimates the June half sales could be down -13% in that region.
Meanwhile, Australian and US facilities are operating as normal. UBS notes the strong balance sheet and liquidity.
While some activity is expected to be delayed, the end market is considered relatively resilient. Buy rating maintained. Target is reduced to $3.50 from $3.79.
Sector: Capital Goods.
Target price is $3.50.Current Price is $2.45. Difference: $1.05 – (brackets indicate current price is over target). If RWC meets the UBS target it will return approximately 30% (excluding dividends, fees and charges – negative figures indicate an expected loss).
