Lincoln Crowne & Company Market Update on the Engineering & Mining Services Sectors - featuring news on M & A activity and corporate performance issues for the week ended 15 November 2013 Companies issuing guidance for the week included AJ Lucas, Ausdrill and Forge Group - which continues to be in trading halt (suspension) whilst trying to get a capital raising completed

1. WEEKLY
Australian Engineering & Mining Services
15 November 2013
WWW.LCC.ASIA
M&A Rumour and Activity
The Australian market closed the week up as investors welcomed the new US Federal Reserve chair's indication she would
maintain economic stimulus. The Australian dollar ended the week at US93.6 cents.
Murray & Roberts’ proposed acquisition of Clough was approved at General and Scheme Meetings. Murray & Roberts
currently owns 62% of Clough having first invested in Clough in 2003.
Two Australian deals were announced this week.
Thomas & Coffey Limited (ASX: THO) entered into a conditional agreement to sell its maintenance business for
$33.5M, subject to working capital and other adjustments to be determined on Completion, to ATIVO Pty Ltd, a wholly
owned subsidiary of Skilled Group Limited (ASX: SKE).
Two unknown institutional investors acquired a 9.1% stake in resources and infrastructure services provider OTOC Limited
(ASX:OTC). The vendors sold 17.65M shares of OTOC Limited.
V Offshore Engineering Pte Ltd, a Singaporean oil and gas services provider, signed a non-binding memorandum of
understanding to acquire a 74% stake in marine services provider Vigahs Marine Technologies Pte. Ltd
(http://www.vigahs.com.sg) for SGD 5.3M.
Performance across the sector continues to be turbulent with Forge and Ausdrill continuing to feel the pain with guidance
while Structural Systems entered a trading halt as it attempts to quantify an ongoing contractual matter.
News Headlines and Key Sector Developments
Ticker News/Event
Ticker News/Event
AJL
Results for the first half FY14 are forecast to meet budget with
new business opportunities currently being pursued. The Drilling
business however remains challenging. AJL expects underlying
EBITDA for FY2014 in the range of $12 – 15M
NWH
Reaffirmed revenue guidance between $1-1.2B for FY14, of
which $1B is currently secured. This is subject to continued
ramp up on existing projects with revenue weighted to the
second half
EGN
Received an order to supply Santos Limited with three wellhead
compression packages to the value of $2M for their Cooper Basin
gas gathering operations
STS
Have requested a trading halt pending an announcement
regarding an ongoing contractual matter
FGE
Extended its voluntary suspension in relation to potential
underperformance on the Diamantina Power Station and West
Angeles Power Station. FGE is currently in discussions with its
financiers and advisors in order to determine what actions FGE
may take to address the concerns identified
VMG
Following several successful adjudication determinations, VDM
has been awarded and has received circa $4M. The amounts
recovered will have a positive earnings and cashflow impact for
VMG in the period received as VMG has not previously
recognised the value of works performed
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
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2. WEEKLY
Australian Engineering & Mining Services
15 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)
233
297
168
266
182
1,056
41
88
31
1,034
142
1,139
73
373
20
2,226
87
48
146
12
190
360
95
104
70
150
5,696
115
175
434
163
68
2,140
61
1,619
89
18
349
22
355
487
41
72
163
51
98
160
32
74
7
663
1,169
10
113
5,363
195
1.01
1.02
1.53
3.89
0.39
6.00
0.34
0.19
0.13
7.20
0.36
1.46
0.27
2.28
0.43
5.11
0.75
0.17
0.28
0.06
3.17
4.18
0.58
0.63
0.31
0.72
17.33
1.68
4.75
2.41
0.15
0.93
11.50
0.67
17.79
0.05
0.07
1.27
0.12
2.80
3.70
0.17
0.93
0.76
0.19
1.24
1.00
0.47
0.34
0.05
1.37
7.23
0.01
0.68
22.00
1.01
0.87
0.95
1.36
3.64
0.40
6.24
0.37
0.19
0.14
7.16
0.45
1.47
0.29
2.21
0.43
5.12
0.73
0.16
0.25
0.06
3.14
4.18
0.56
0.69
0.34
0.72
16.89
1.66
4.50
2.50
0.13
0.90
11.50
0.64
17.54
0.05
0.07
1.25
0.12
3.00
3.57
0.17
0.92
0.73
0.18
1.26
0.99
0.51
0.34
0.05
1.30
7.16
0.01
0.78
21.73
1.06
1.03
1.05
1.55
3.97
0.42
6.29
0.38
0.19
0.14
7.28
0.47
1.47
0.32
2.29
0.43
5.26
0.75
0.17
0.30
0.06
3.22
4.18
0.60
0.69
0.34
0.74
18.15
1.76
4.88
2.55
0.15
0.96
11.61
0.67
17.93
0.05
0.07
1.31
0.12
3.14
3.70
0.17
0.93
0.79
0.20
1.26
1.00
0.51
0.35
0.05
1.37
7.36
0.01
0.82
22.70
1.06
0.75
0.93
1.33
3.64
0.38
5.92
0.33
0.18
0.13
6.81
0.31
1.45
0.27
2.09
0.42
5.01
0.73
0.16
0.25
0.06
2.95
4.18
0.52
0.63
0.31
0.69
16.57
1.57
4.50
2.39
0.13
0.90
11.21
0.60
17.48
0.05
0.07
1.20
0.11
2.77
3.46
0.16
0.90
0.71
0.18
1.03
0.95
0.47
0.34
0.05
1.29
7.08
0.01
0.67
21.06
1.00
Weekly Volume
% Change
▼
▼
▼
▼
▲
▲
▲
▼
▲
▼
▲
▲
▲
▼
—
▲
▼
▼
▼
▲
▼
—
▼
▲
▲
▼
▼
▼
▼
▲
▼
▼
—
▼
▼
—
▼
▼
—
▲
▼
—
▼
▼
▼
▲
▼
▲
—
▼
▼
▼
—
▲
▼
▲
-13.4%
-6.9%
-11.1%
-6.4%
3.9%
4.0%
8.8%
-2.6%
3.8%
-0.6%
25.0%
0.7%
5.6%
-3.1%
0.0%
0.2%
-3.3%
-6.1%
-10.7%
3.5%
-0.9%
0.0%
-3.5%
9.5%
8.1%
-0.7%
-2.5%
-1.5%
-5.3%
3.7%
-10.3%
-3.2%
0.0%
-4.5%
-1.4%
0.0%
-2.9%
-1.6%
0.0%
7.1%
-3.5%
0.0%
-1.1%
-3.9%
-5.3%
1.6%
-1.0%
7.4%
0.0%
-6.0%
-5.5%
-1.0%
0.0%
14.7%
-1.2%
5.5%
EV/
EV/
EBITDA
EBIT
NM
2.7x
4.2x
6.4x
3.7x
8.3x
2.1x
3.8x
4.0x
8.8x
3.1x
6.9x
8.3x
4.8x
2.4x
4.0x
7.5x
NM
3.2x
8.0x
5.7x
2.7x
3.8x
8.0x
5.1x
4.1x
3.5x
7.3x
4.7x
3.5x
1.3x
2.9x
6.6x
5.7x
6.0x
93.8x
1.5x
2.6x
2.4x
6.7x
7.0x
3.2x
7.6x
2.6x
NM
3.7x
4.0x
2.8x
2.5x
NM
6.3x
15.8x
NM
4.3x
10.3x
2.7x
Trend
NM
4.9x
5.4x
7.7x
11.2x
12.3x
3.6x
8.2x
11.9x
10.6x
6.2x
7.2x
15.3x
5.4x
3.3x
7.2x
8.8x
NM
9.4x
11.0x
9.4x
3.3x
6.1x
8.8x
7.3x
5.4x
7.3x
7.7x
5.0x
5.2x
2.7x
4.1x
9.9x
75.3x
6.8x
NM
2.0x
3.6x
3.5x
8.2x
9.4x
6.5x
8.1x
5.6x
NM
4.1x
5.0x
9.3x
4.7x
NM
12.3x
29.6x
NM
9.5x
11.6x
12.7x
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
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