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Report No. 115, 19 June 2015 WWW.LCC.ASIA
IMPORTANT DISCLAIMER
This report has been prepared by Lincoln Crowne & Company P...
Report No. 115, 19 June 2015 WWW.LCC.ASIA
IMPORTANT DISCLAIMER
This report has been prepared by Lincoln Crowne & Company P...
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Lincoln Crowne & Company Engineering & Contractors report no 115 20150619

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Lincoln Crowne & Company Weekly Engineering & Contractors Report Edition 115 for the Australian stock market dated 19th June 2015

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Lincoln Crowne & Company Engineering & Contractors report no 115 20150619

  1. 1. Report No. 115, 19 June 2015 WWW.LCC.ASIA 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 WEEKLYAustralianEngineering&MiningServices M&A Rumour and Activity The Australian market finished the week 1.13% higher with the S&P / ASX100 ending at 4665 points, with a broad-based recovery rally on Friday due to strong gains on Wall Street and higher commodity prices, despite lingering uncertainty over the Greek debt crisis. The Australian dollar was 0.09% lower for the week to end at US77.52 cents, propped up by bets that the US interest rate hike will occur later than anticipated and assurances from the US Federal Reserve that the US interest rates will not be raised too quickly (comments which led to a weaker US dollar), despite increasing bets on another interest rate cut from the Reserve Bank of Australia. The Australian Financial Review reported that CarVal Investors, a fund manager with a focus in distressed debt, had struck a deal to buy a local secured lender out of Pilbara-focused Viento Group through a voluntary administration process. The new investor will inject fresh equity and attempt to keep Viento’s clients on board with a turnaround story. The ASX-listed Viento Group Limited (ASX:VIE) entered into voluntary administration in April 2015, in the wake of $14.5 million loss and the breach of banking covenants. The AFR also said that many banks are becoming increasingly nervous in the sector, leading to opportunities for special situation/distressed debt funds such as CarVal Investors to enter the mining services sector. Distressed debt funds are said to be watching US high yield debt in the likes of Barminco Limited and Ausdrill Limited (ASX:ASL). Shares of both Skilled Group Limited (ASX:SKE) and Programmed Maintenance Services Limited (ASX:PRG) had been placed into a trading halt until 24 June 2015 pending the announcement of a potential transaction. While no details on the potential transaction were provided when the trading halt was announced, SKE had recently entered into active discussions with PRG on a potential merger in May 2015. Pacific Oilfield Pte. Ltd. agreed to acquire an additional 70% stake in Spindex Energy Services Pte. Ltd. from Spindex Industries Limited (SGX:564) for SGD1.8 million ($1 million) on 12 June 2015. Spindex Energy Services Pte. Ltd. provides engineering solutions for the oilfield equipment and drilling industries. Zhaojin Mining Industry Co Ltd (SEHK:1818) won an auction to acquire 60% stake in Beijing Dongfang Yanjing Mining Engineering Design Company Limited (“Beijing Dongfang”) from Shandong Zhaojin Group Co. Ltd. for RMB10.1 million ($2.11 million) in cash on 10 June 2015. Beijing Dongfang provides engineering design and consultation, technology development and technology consultation. News Headlines and Key Sector Developments Ticker News/Event Ticker News/Event AJL The Lancashire County Council Planning Officer provided a positive recommendation on the Preston New Road application, which is an important step for the development of Cuadrilla’s assets. The Councillors will make a decision at the end of June LCM Forager Funds Management Pty Ltd became a substantial shareholder with 6.79% stake ANG Awarded (i) a 2-year maintenance contract for the Las Bambas mine site in Peru and (ii) a supply contract for tray bodies for a large mining company in Australia’s west coast MAH Announced that its current banking review period has been extended to 30 June 2015 to allow the banks to work through their internal approval process BKN Announced the retirement of CEO Brian Hodges. The Board will be conducting a search process for a new CEO MAH Advised that it expects to impair the carrying value of equipment and inventory assets at a pre-tax charge of $95m-$125m for its FY15 results (which if further to the $130m impairment recorded in the 1H15 results) CIM Commenced a tender offer to buy back up to $500m of its 5.95% senior notes due 2022 MND Lodged a counterclaim ($200m) in response to a claim ($130m) by Wiggins Island Coal Export Terminal Pty Ltd filed against MMM, a JV 50%-owned by MND HDX Signed a 3-year agreement (with 1 year extension option) to provide overburden drilling services to three mines owned and operated by the Yancoal Group WDS Updated its earnings guidance for FY15, with a profit downgrade of c.$2m from $11-13m loss to $14-15m loss. The downgrade is primarily due to the slower-than-expected ramp up for a short term contract  Contract Wins Source: Capital IQ, LCC research  Contract Losses
  2. 2. Report No. 115, 19 June 2015 WWW.LCC.ASIA 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 WEEKLYAustralianEngineering&MiningServices Market Cap Open Price Close Price Week High Week Low Weekly Volume EV/ EV/ Ticker Company Name (AUD Million) (AUD) (AUD) (AUD) (AUD) % Change Trend EBITDA EBIT AJL AJ Lucas Group Limited 100 0.42 0.38 0.43 0.38 ▼ -10.7% 14.0x NM ASL Ausdrill Limited 139 0.43 0.45 0.45 0.41 ▲ 3.5% 3.7x 10.5x AAX Ausenco Limited 39 0.23 0.24 0.24 0.22 ▲ 2.2% NM NM ANG Austin Engineering Limited 57 0.67 0.68 0.69 0.66 ▲ 1.5% 17.3x NM BLY Boart Longyear Limited 130 0.16 0.14 0.16 0.14 ▼ -9.7% 39.4x NM BKN Bradken Limited 378 2.35 2.21 2.35 2.15 ▼ -6.0% 75.0x NM BYL Brierty Limited 44 0.35 0.35 0.35 0.33 — 0.0% 3.4x 5.3x BOL Boom Logistics Limited 56 0.12 0.12 0.12 0.12 — 0.0% 4.8x 50.4x BSA BSA Limited 72 0.17 0.17 0.18 0.17 — 0.0% 5.9x 18.0x CDD Cardno Limited 498 2.89 3.02 3.07 2.89 ▲ 4.5% 6.2x 7.9x CGH Calibre Group Limited 65 0.21 0.19 0.21 0.18 ▼ -11.9% 1.5x 3.4x CIM CIMIC Group Limited 7,051 20.75 20.83 20.84 20.05 ▲ 0.4% 13.7x 66.2x COF Coffey International Limited 36 0.16 0.14 0.15 0.14 ▼ -9.7% 5.0x 8.0x DCG Decmil Group Limited 217 1.18 1.30 1.30 1.18 ▲ 10.2% 2.1x 2.3x DSB DeltaSBD Limited 4 0.08 0.08 0.08 0.07 ▼ -6.3% 26.7x NM DOW Downer EDI Limited 2,189 5.00 5.06 5.14 4.99 ▲ 1.2% 4.4x 7.5x EAL E&A Limited 23 0.16 0.17 0.18 0.16 ▲ 6.3% 5.7x 7.4x EGN Engenco Limited 31 0.10 0.10 0.11 0.10 — 0.0% 4.8x NM EHL Emeco Holdings Limited 55 0.10 0.10 0.10 0.10 ▼ -2.0% 8.7x NM EVZ EVZ Limited 3 0.01 0.02 0.02 0.01 ▲ 7.1% 39.4x NM FWD Fleetwood Corporation Limited 92 1.57 1.51 1.58 1.44 ▼ -3.5% 5.2x 14.2x GCS Global Construction Services Limited 102 0.52 0.51 0.52 0.49 ▼ -1.9% 6.2x 11.7x GNG GR Engineering Services Limited 141 0.91 0.94 0.94 0.86 ▲ 3.9% 6.1x 7.6x HDX Hughes Drilling Pty Limited 37 0.20 0.18 0.18 0.18 ▼ -10.3% 3.4x 6.3x IMD Imdex Limited 63 0.29 0.29 0.30 0.28 ▲ 1.8% NM NM LCM Logicamms Limited 51 0.74 0.75 0.75 0.73 ▲ 1.4% 4.5x 5.9x LYL Lycopodium Limited 55 1.40 1.39 1.40 1.34 ▼ -1.1% 16.3x NM MLD MACA Limited 186 0.76 0.80 0.82 0.76 ▲ 6.0% 1.2x 1.9x MAH MacMahon Holdings Limited 61 0.05 0.05 0.05 0.05 — 0.0% 1.0x 4.3x MYE Mastermyne Limited 18 0.20 0.20 0.20 0.18 — 0.0% 2.2x 7.3x MIN Mineral Resources Limited 1,407 7.31 7.50 7.58 7.14 ▲ 2.6% 5.0x 11.4x MCE Matrix Composites & Engineering 47 0.53 0.50 0.56 0.50 ▼ -5.7% 1.2x 3.0x MND Monadelphous Group Limited 996 10.68 10.69 10.86 10.47 ▲ 0.1% 4.3x 5.0x MRM MMA Offshore Limited 225 0.58 0.61 0.62 0.58 ▲ 4.3% 2.6x 4.6x NOD Nomad Building Solutions Limited 33 0.08 0.07 0.08 0.07 ▼ -2.6% NM NM NWH NRWHoldings Limited 54 0.19 0.20 0.21 0.19 ▲ 2.6% 1.5x 12.8x OTC OTOC Limited 22 0.08 0.08 0.09 0.08 ▲ 5.1% 3.7x 9.5x PRG Programmed Maintenance Services 364 3.01 3.07 3.15 2.98 ▲ 2.0% 6.7x 8.3x RCR RCR Tomlinson Limited 272 1.91 1.97 2.01 1.88 ▲ 2.9% 4.4x 6.5x SND Saunders International Limited 52 0.66 0.66 0.66 0.63 ▲ 0.8% 3.3x 3.5x SDM Sedgman Limited 170 0.73 0.75 0.76 0.73 ▲ 2.7% 3.3x 6.2x SKE SKILLED Group Limited 372 1.50 1.59 1.60 1.49 ▲ 6.0% 6.5x 7.8x SSM Service Stream Limited 118 0.30 0.31 0.33 0.30 ▲ 1.7% 8.2x 10.2x SWL Seymour Whyte Limited 103 1.16 1.18 1.19 1.10 ▲ 1.3% 4.2x 5.2x SXE Southern Cross Electrical Engineering 45 0.29 0.29 0.29 0.29 ▼ -1.7% 0.8x 1.6x STS SRG Limited 41 0.65 0.65 0.65 0.65 — 0.0% 2.4x 9.7x SWK Swick Mining Services Limited 24 0.14 0.15 0.15 0.14 ▲ 3.6% 2.3x 9.4x TPP Tempo Australia Limited 9 0.05 0.05 0.05 0.05 ▼ -2.0% NM NM TTN Titan Energy Services Limited 7 0.10 0.08 0.10 0.08 ▼ -12.5% 1.5x 2.2x TSE Transfield Services Limited 784 1.60 1.53 1.60 1.49 ▼ -4.4% 5.7x 8.7x UGL UGL Limited 447 2.53 2.71 2.72 2.51 ▲ 7.1% NM NM VMG VDM Group Limited 29 0.01 0.01 0.01 0.01 ▼ -14.3% NM NM WDS WDS Limited 19 0.11 0.13 0.13 0.11 ▲ 18.2% 2.6x NM WOR WorleyParsons Limited 2,641 10.18 10.67 10.76 10.12 ▲ 4.8% 6.8x 7.7x WTP 152 0.83 0.81 0.83 0.80 ▼ -3.0% 0.7x 1.7x Source: Capital IQ, LCC research Watpac Limited

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