TUNE’s in-line update and Middle East reassurance will be well received given nervousness in the run up to today (shares -18% over 4 weeks). Improved w/c management and the much awaited unwind of US stock means ND has fallen to £9m as expected, a key milestone which halves leverage to c0.4x. EBITDA margin has started to recover and, with R&D productivity a key focus, TUNE is well placed to rebuild profitability and FCF. On just 9x P/E (0.7x EV/sales) we see plenty of scope for rating expansion after recent weakness and re-iterate Buy.
