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DHG [M-PF +4.2%] - Working through inventory - Update

9M15 results disappointed. Revenue declined 5.5% as DHG’s major clients continue to work off FY14 inventory. NPAT-MI grew just 2.5% vs. 9M14. A reboot of the sales program, focusing on smaller clients is beginning to yield results but a return to double digit earnings growth is a couple years out. For the FY16-20 period, we project CAGR for revenue at 7.2% (sector average) while that of NPATMI at 3.2%.