Lincoln Crowne & Company market update on the Engineering & Mining Services Sectors for 8 November 2013. Report includes detail on 2 deals announced during the week in addition to Forge and Ausdrill guidance announcements

1. WEEKLY
Australian Engineering & Mining Services
8 November 2013
WWW.LCC.ASIA
M&A Rumour and Activity
The Australian market closed lower after strong US economic growth figures raised the possibility that the US Federal
Reserve could begin tapering its stimulus program. The Australian dollar ended the week at US94.7 cents.
It was a bit of a bumpy week for the Sector with Ausdrill coming out with a downgrade and Forge also signalling problems
with various contracts, going into trading halt and then Voluntary Suspension as a result.
As has become the pattern in sector with downgrades, ASL closed at $1.38 before updated market guidance and then
traded at $0.98, before closing out the week at $0.995. Volume on Thursday from when ASL recommenced trading was
huge.
Two deals were announced this week.
Swick Mining Services (ASX:SWK) agreed to invest $6.5M in Swedish mineral analysis business Orexplore which is
developing scanning technology. Swick said Orexplore had created a portable X-ray mineral scanner that was in a design
and development stage and would allow real time assay and structural analysis in the field. Under the deal, Swick will buy
an initial 23 per cent stake in Orexplore for 6.6M Swedish kronor (A$1.1M). Swick will increase the shareholding over two
and a half years to 52 per cent for an additional SEK16.6M (A$2.68M) and will provide another SEK16.6 million in debt
funding to help develop and commercialise products.
Kreuz Holdings Limited (SGX:5RK), a Singaporean listed investment holding company that provides subsea services to the
offshore oil and gas industry has been acquired by Headland Private Equity for A$405M.
News Headlines and Key Sector Developments
Ticker News/Event
Ticker News/Event
ASL
Has reviewed anticipated performance for FY14. ASL expects to
report NPAT of between $35M and $45M for FY14 on revenues of
between $825M and $925M. ASL reported NPAT of $90.4M on
revenue of $1,129M for FY13
FGE
Identified concerns relating to potential underperformance on
the Diamantina Power Station and West Angelas Power
Station projects that were acquired in January 2012. FGE
requested a trading halt and suspension from quotation to
enable it to clarify the position in relation to these projects and
to provide to ASX an update on its earnings guidance
BKN
Guides the market to an operating EBITDA of around $85M for the
first half of FY14, excluding a net positive effect from one-off
items, which is not expected to be significant. If recent
improvements in order intake continue, BKN still expect the full
year to be broadly comparable with the operating FY13 result
NWH
Wholly owned subsidiary Action Drill & Blast Pty Ltd has been
awarded a three year contract for drill and blast operations at
the Middlemount Coal Mine in Queensland. The contract is
valued at approximately $60M over the three years
DOW
Provided earnings guidance for FY14. DOW expects NPAT to be
flat at around $215M
SDM
Provided an earnings update. While market conditions
remaining challenging SDM anticipates that likely FY14
reported earnings will be broadly in line with FY13 results and
SDM remains in a strong position to participate as and when
projects proceed
Source: Capital IQ, Thomson Reuters, 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

2. WEEKLY
Australian Engineering & Mining Services
8 November 2013
Ticker Company Name
AJL
ASL
AAX
ANG
BLY
BKN
BYL
BOL
BSA
CDD
CGH
CLO
COF
DCG
DSB
DOW
EAL
EGN
EHL
EVZ
FWD
FGE
GCS
GNG
HDX
IMD
LEI
LCM
LYL
MLD
MAH
MYE
MIN
MCE
MND
NMS
NOD
NWH
OTC
PRG
RCR
RQL
SND
SDM
SSM
SWL
SXE
STS
SWK
TPP
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
Clough 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
Forge Group 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
Neptune Marine Services 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
Transfield Services Limited
UGL Limited
VDM Group Limited
WDS Limited
WorleyParsons Limited
Watpac Limited
WWW.LCC.ASIA
Market Cap Open Price Close Price Week High Week Low
(AUD Million)
(AUD)
(AUD)
(AUD)
(AUD)
269
311
188
284
175
1,009
39
88
30
1,047
114
1,135
67
383
20
2,217
90
53
166
12
189
360
95
92
67
150
5,780
117
183
421
176
70
2,127
62
1,622
89
19
344
22
335
494
41
73
167
54
97
162
29
75
8
697
1,167
10
101
5,319
181
1.17
1.46
1.64
3.90
0.44
6.10
0.34
0.19
0.14
7.18
0.40
1.46
0.24
2.46
0.44
4.93
0.73
0.18
0.35
0.06
3.27
4.18
0.58
0.67
0.32
0.74
17.54
1.79
4.95
2.58
0.15
1.02
11.31
0.70
18.33
0.05
0.07
1.36
0.10
2.78
3.59
0.17
0.93
0.85
0.22
1.33
1.01
0.52
0.34
0.05
1.33
7.42
0.01
0.81
21.91
0.98
1.01
1.00
1.52
3.88
0.39
5.96
0.35
0.19
0.13
7.22
0.36
1.46
0.26
2.27
0.42
5.10
0.75
0.17
0.29
0.06
3.13
4.18
0.56
0.61
0.32
0.72
17.14
1.68
4.70
2.44
0.14
0.93
11.43
0.66
17.57
0.05
0.07
1.24
0.12
2.83
3.62
0.17
0.93
0.75
0.19
1.24
1.00
0.47
0.35
0.05
1.36
7.15
0.01
0.70
21.55
0.98
1.17
1.47
1.64
3.96
0.45
6.12
0.38
0.19
0.14
7.31
0.40
1.46
0.26
2.51
0.44
5.40
0.75
0.18
0.35
0.06
3.30
4.18
0.58
0.68
0.32
0.74
17.76
1.79
4.96
2.58
0.16
1.02
11.53
0.72
18.44
0.05
0.07
1.40
0.12
2.85
3.82
0.18
0.93
0.85
0.22
1.35
1.03
0.52
0.35
0.05
1.43
7.51
0.01
0.81
22.05
0.98
0.92
0.93
1.47
3.77
0.37
5.69
0.34
0.18
0.13
7.02
0.36
1.45
0.24
2.21
0.41
4.93
0.70
0.16
0.28
0.06
3.05
4.18
0.52
0.61
0.31
0.68
16.89
1.57
4.60
2.36
0.14
0.89
11.16
0.61
17.50
0.05
0.07
1.18
0.10
2.74
3.48
0.17
0.90
0.70
0.19
1.22
0.98
0.46
0.33
0.05
1.33
7.06
0.01
0.66
21.06
0.93
Weekly Volume
% Change
▼
▼
▼
▼
▼
▼
▲
▼
▼
▲
▼
▲
▲
▼
▼
▲
▲
▼
▼
—
▼
—
▼
▼
—
▼
▼
▼
▼
▼
▼
▼
▲
▼
▼
▼
▼
▼
▲
▲
▲
—
—
▼
▼
▼
▼
▼
▲
—
▲
▼
▲
▼
▼
▲
-14.1%
-31.8%
-7.3%
-0.5%
-11.5%
-2.3%
2.9%
-2.6%
-3.7%
0.6%
-10.0%
0.3%
10.6%
-7.7%
-4.6%
3.4%
3.4%
-2.9%
-18.6%
0.0%
-4.3%
0.0%
-3.4%
-9.0%
0.0%
-2.7%
-2.3%
-6.1%
-5.1%
-5.4%
-6.7%
-8.4%
1.1%
-5.7%
-4.1%
-4.0%
-2.9%
-9.2%
15.0%
1.8%
0.8%
0.0%
0.0%
-11.2%
-11.6%
-6.8%
-1.0%
-10.6%
3.0%
0.0%
2.3%
-3.6%
50.0%
-14.2%
-1.6%
0.5%
EV/
EV/
EBITDA
EBIT
NM
2.8x
4.6x
6.7x
3.7x
8.1x
2.0x
3.8x
3.9x
8.9x
2.7x
6.9x
7.9x
4.9x
2.4x
4.0x
7.7x
NM
3.4x
7.8x
5.7x
2.7x
3.8x
6.9x
4.9x
4.1x
3.5x
7.4x
4.9x
3.4x
1.4x
3.0x
6.5x
5.9x
6.0x
93.8x
1.5x
2.6x
2.4x
6.4x
7.1x
3.2x
7.7x
2.7x
NM
3.6x
4.1x
2.7x
2.5x
NM
6.4x
15.8x
NM
3.9x
10.2x
2.5x
Trend
NM
5.0x
6.0x
8.2x
11.1x
11.9x
3.5x
8.2x
11.6x
10.7x
5.3x
7.2x
14.6x
5.6x
3.3x
7.2x
9.1x
NM
9.7x
10.8x
9.4x
3.3x
6.1x
7.6x
7.1x
5.4x
7.4x
7.8x
5.2x
5.1x
2.8x
4.3x
9.9x
77.6x
6.8x
NM
2.1x
3.5x
3.5x
7.8x
9.6x
6.5x
8.2x
5.9x
NM
4.0x
5.0x
8.8x
4.8x
NM
12.6x
29.5x
NM
8.5x
11.6x
11.6x
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