- Lincoln Crowne & Company
Transcription
- Lincoln Crowne & Company
WEEKLY Australian Engineering & Mining Services 7 November 2014 WWW.LCC.ASIA M&A Rumour and Activity The Australian market continued to climb higher, posting its fourth straight week of gains as speculation increased of more stimulus in Europe. The S&P / ASX100 finished the week 20 points higher at 4624 points. The Australian dollar finished the week 2.8 percent lower at US85.5, on the back of growing expectations of a US interest rate hike and declining commodity prices. The spot price for iron ore fell 5.4 percent over the week to close at $US75.5 a tonne and the RBA decided to keep the cash rate unchanged for a fourteenth consecutive month, at 2.5 percent. Engineering, maintenance and property services provider, UGL Limited (ASX: UGL), has completed the sale of its global property services business DTZ for $1.215 billion to a consortium comprising TPG Capital (www.tpg.com), PAG Asia Capital (www.pagasia.com) and Ontario Teacher’s Pension Plan (www.otpp.com). Completion of the sale follows the achievement of regulatory approvals and other conditions precedent. Net proceeds from the sale are expected to be in the range of $1.0-1.05 billion dependent on the finalisation of transaction costs and other sale adjustments including known liabilities which will be transferred with DTZ. A capital return of up to $500 million, or $3 per share was approved by shareholders at the Company’s AGM on 30 October 2014. The sale of DTZ will reposition UGL as an engineering and maintenance services business. Diversified resources and infrastructure services provider, Decmil Group Limited (ASX:DCG), has agreed to acquire the business assets of SAS Telecom Pty Limited (www.sastel.com.au). SAS is a supplier of communication systems, structured cabling and data supply to accommodation villages, resource projects, government infrastructure and commercial buildings. The company was placed into administration on 29 August 2014 following a contractual dispute. SAS earned FY14 revenue of circa $14 million, and had a FY14 EBITDA of circa $1 million. Subject to the satisfaction of conditions precedents, Decmil will acquire the remaining work in hand and other business assets for an aggregate sum of circa $1 million. The transaction will be effected as an asset acquisition with a completion date of 1 December 2014. The acquisition aligns with Decmil’s diversification strategy. It is rumoured that discussions between Chinese infrastructure player, China Communications Construction Company Limited (SEHK:1800), and Leighton Holdings’ (ASX:LEI), in relation to the sale of construction business, John Holland (www.johnholland.com.au) have progressed. CCCC is believed to be competing with Samsung C&T Corporation (KOSE:A000830) to acquire John Holland. However, Samsung C&T is said to be interested in only the infrastructure operations which represents circa 70 percent of the business. The remainder comprises John Holland rail, which is involved in maintaining rail networks and laying tracks. As a result, Australian-based developer of rail infrastructure, ATEC Rail Group (www.ateclimited.com.au) is rumoured to have entered the sales process. News Headlines and Key Sector Developments Ticker News/Event Ticker News/Event AJL Announced its JV with Spiecapag Australia Pty Ltd has been awarded a contract to construct APA Group's Eastern Goldfields Gas Pipeline in WA. Expected to commence in Mar 2015, with practical completion in Nov 2015 TSE Upgraded their previous guidance on underlying EBITDA of $240-$260M to $260-$280M DOW Announced that following the acquisition of Tenix, they are increasing the target statutory NPAT for FY15 to $210M, up from the previous target of $205M UGL Announced that the JV between CH2M HILL, UGL, and GE, contracted to build the power station for the Ichthys LNG Project, has experienced road blocks in its design and procurement phase. The forecast project costs have increased resulting in the JV recognising a provision of USD170M HDX Announced the contract extension for the provision of overburden drilling services with Anglo American Coal at the Callide Mine. Extended to Dec 2015 WDS Announced the resignation of Nicola Matthew as Company Secretary LEI Announced the appointment of Mr John Easy to the role of Group General Counsel and Company Secretary. My Easy previously held the corresponding position at Dexus Group WOR Rosenberg WorleyParsons has been awarded an EPCI contract for ConocoPhillips’ capacity increase project on the Ekofisk Complex in the Norwegian part of the North Sea. Contract value is estimated to be $167M VDM Advised that it has signed a Distribution Agreement with Changlin Company Ltd appointing VDM as sales and service distributor for Changlin products WTP Announced that discussions with Pluton Resources’ new Receivers, KordaMentha, have progessed. WTP has agreed to complete some limited scope works on site, on a fully indemnified basis in relation to payment for these services Source: Capital IQ, LCC research IMPORTANT DISCLAIMER This report has been prepared by Lincoln Crowne & Company Pty. Limited ("LCC"). The research is based on information obtained from sources believed to be accurate and reliable. LCC does not guarantee the accuracy, reliability, completeness or suitability of any such information and makes no warranty, guarantee or representation, expressly or impliedly about this research. LCC accepts no obligation to correct or update the information. No opinion or recommendation is made within this research. This report is not intended to be, nor should it be relied on, as a substitute for professional advice. This report should not be relied upon as the sole basis for any investment decision or planning, and LCC does not accept any responsibility on this basis for actions made. Page 1 / 2 WEEKLY Australian Engineering & Mining Services 7 November 2014 WWW.LCC.ASIA Market Cap Open Price Close Price Week High Week Low (AUD Million) (AUD) (AUD) (AUD) (AUD) Ticker Company Name AJL ASL AAX ANG BLY BKN BYL BOL BSA CDD CGH COF DCG DSB DOW EAL EGN EHL EVZ FWD GCS GNG HDX IMD LEI LCM LYL MLD MAH MYE MIN MCE MND MRM NOD NWH OTC PRG RCR RQL SND SDM SSM SWL SXE STS SWK TPP TTN TSE UGL VMG WDS WOR WTP AJ Lucas Group Limited Ausdrill Limited Ausenco Limited Austin Engineering Limited Boart Longyear Limited Bradken Limited Brierty Limited Boom Logistics Limited BSA Limited Cardno Limited Calibre Group Limited Coffey International Limited Decmil Group Limited DeltaSBD Limited Downer EDI Limited E&A Limited Engenco Limited Emeco Holdings Limited EVZ Limited Fleetwood Corporation Limited Global Construction Services Limited GR Engineering Services Limited Hughes Drilling Pty Limited Imdex Limited Leighton Holdings Limited Logicamms Limited Lycopodium Limited MACA Limited MacMahon Holdings Limited Mastermyne Limited Mineral Resources Limited Matrix Composites & Engineering Monadelphous Group Limited Mermaid Marine Australia Limited Nomad Building Solutions Limited NRW Holdings Limited OTOC Limited Programmed Maintenance Services RCR Tomlinson Limited Resource Equipment Limited Saunders International Limited Sedgman Limited Service Stream Limited Seymour Whyte Limited Southern Cross Electrical Engineering Structural Systems Limited Swick Mining Services Limited Tempo Australia Limited Titan Energy Services Limited Transfield Services Limited UGL Limited VDM Group Limited WDS Limited WorleyParsons Limited Watpac Limited 187 172 78 84 112 633 52 70 29 870 129 84 308 5 2,020 72 31 103 5 101 72 108 27 123 7,373 54 63 272 115 35 1,528 85 1,097 632 14 190 51 324 329 53 67 107 70 128 77 37 42 10 21 966 893 31 42 3,191 142 0.70 0.60 0.50 1.12 0.24 3.87 0.45 0.15 0.12 5.60 0.37 0.30 1.78 0.10 4.76 0.53 0.11 0.19 0.03 1.74 0.44 0.80 0.13 0.59 22.00 0.77 1.60 1.34 0.10 0.54 8.50 0.90 12.52 1.86 0.05 0.77 0.20 2.59 2.74 0.17 0.87 0.50 0.18 1.53 0.52 0.60 0.27 0.05 0.44 1.89 6.96 0.01 0.27 13.53 0.82 0.70 0.55 0.47 1.00 0.23 3.70 0.42 0.15 0.11 5.31 0.37 0.33 1.83 0.11 4.64 0.55 0.10 0.18 0.03 1.66 0.43 0.72 0.13 0.57 21.78 0.77 1.60 1.17 0.09 0.46 8.16 0.90 11.80 1.72 0.05 0.68 0.21 2.73 2.38 0.17 0.85 0.47 0.18 1.46 0.48 0.58 0.26 0.06 0.41 1.89 5.46 0.01 0.29 12.89 0.75 0.77 0.65 0.51 1.13 0.25 3.91 0.45 0.15 0.12 5.62 0.38 0.33 1.83 0.11 4.85 0.57 0.11 0.19 0.03 1.74 0.43 0.86 0.13 0.60 22.44 0.78 1.62 1.36 0.10 0.54 8.51 0.92 12.54 1.86 0.05 0.79 0.21 2.76 2.74 0.18 0.87 0.50 0.18 1.55 0.52 0.60 0.27 0.06 0.44 1.93 7.00 0.01 0.30 13.75 0.82 0.68 0.52 0.47 1.00 0.22 3.60 0.41 0.15 0.10 5.23 0.37 0.31 1.70 0.10 4.59 0.53 0.10 0.18 0.02 1.66 0.42 0.66 0.12 0.55 21.51 0.77 1.60 1.17 0.09 0.45 7.90 0.88 11.69 1.71 0.05 0.67 0.20 2.50 2.25 0.16 0.85 0.44 0.18 1.43 0.48 0.58 0.26 0.05 0.38 1.78 5.25 0.01 0.26 12.65 0.71 EV/ EV/ % Change Weekly Volume Trend EBITDA EBIT — ▼ ▼ ▼ ▼ ▼ ▼ ▼ ▼ ▼ — ▲ ▲ ▲ ▼ ▲ ▼ ▼ — ▼ ▼ ▼ ▲ ▼ ▼ — — ▼ ▼ ▼ ▼ — ▼ ▼ ▼ ▼ ▲ ▲ ▼ — ▼ ▼ — ▼ ▼ ▼ ▼ ▲ ▼ ▼ ▼ ▼ ▲ ▼ ▼ 0.0% -8.3% -6.0% -10.7% -6.2% -4.4% -6.7% -1.7% -4.3% -5.2% 0.0% 10.0% 2.5% 10.0% -2.5% 3.8% -9.1% -2.7% 0.0% -4.6% -3.4% -10.0% 4.0% -3.4% -1.0% 0.0% 0.0% -12.7% -6.1% -14.0% -4.0% 0.0% -5.8% -7.8% -3.8% -11.7% 2.5% 5.4% -13.1% 0.0% -2.3% -6.0% 0.0% -4.3% -8.7% -3.3% -3.8% 9.8% -8.0% -0.3% -21.6% -9.1% 9.4% -4.7% -8.5% NM 3.4x NM 11.2x 17.1x 6.7x 2.1x 3.9x 4.2x 7.9x 2.6x 6.2x 3.2x 77.0x 3.5x 6.8x 8.3x 6.0x NM 5.8x 4.9x 5.4x 3.6x NM 5.0x 11.2x 3.3x 1.9x 1.1x 3.0x 2.9x 4.0x 4.2x 6.6x 6.9x 1.9x 4.2x 6.1x 4.8x 12.6x 5.1x 2.9x 6.4x 5.0x 2.3x 2.0x 3.6x 15.7x 1.2x 6.7x 20.7x NM 0.7x 7.1x 0.4x NM 8.4x NM 41.8x NM 11.9x 3.5x 11.8x 16.1x 9.7x 5.1x 9.5x 3.5x NM 6.1x 8.4x NM NM NM 15.1x 8.5x 6.2x 7.1x NM 9.6x 18.6x 4.0x 3.0x 2.6x 7.4x 5.2x 10.0x 4.8x 9.7x NM 3.2x 5.9x 7.4x 6.6x NM 5.4x NM 10.4x 5.7x 3.9x 8.2x 17.9x 19.9x 1.6x 10.4x 48.8x NM 1.3x 8.3x 0.9x So urce: Capital IQ, LCC research IMPORTANT DISCLAIMER This report has been prepared by Lincoln Crowne & Company Pty. Limited ("LCC"). The research is based on information obtained from sources believed to be accurate and reliable. LCC does not guarantee the accuracy, reliability, completeness or suitability of any such information and makes no warranty, guarantee or representation, expressly or impliedly about this research. LCC accepts no obligation to correct or update the information. No opinion or recommendation is made within this research. This report is not intended to be, nor should it be relied on, as a substitute for professional advice. This report should not be relied upon as the sole basis for any investment decision or planning, and LCC does not accept any responsibility on this basis for actions made. Page 2 / 2