lcc asia pacific weekly report on developments in the australian engineering and mining services sectors - this one being edition 35

1. (0.4%)
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0.9%
0.5%
(1.5%)
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'15 '16 '17 '18 '19
ASX200 INDEX
Australia Week Ending
13 September 2019
Date Published
16 September 2019
Edition
325
Australian Engineering, Contractors & Service Providers
Market Performance - Overview
M&A Rumour and Activity
DAILY PERFORMANCE OF ASX200
Babylon Pump & Power Limited (AX.BPP) announced on 11 September 2019 the
completion of the acqusitions of Primepower Queensland Pty Ltd. Post
acquisition, Babylon will be one of the largest independent and diversified engine
re-builders in Australia.
ALS Limited (AX:ALS) acquired a testing laboratory in Mexico City for an
undisclosed sum.
Private equity backed CQMS Razer acquired various assets & technology of
California based Berkeley Forge & Tool .
Cardno (AX CDD) announced the proposed demerger of Integra from traditional
consulting activities. The Demerger implementation date has been set as 31
October 2019.
Over the past 12 months, the LCC Australian Contractors & Service Providers
Index® has continued the ASX200 as small cap stocks continue to trade strongly
despite volatile market conditions.
WWW.LCCASIAPACIFIC.COM
Index
Percentage change
Fixed income Yield
Change in basis point
Week YTD 12-months Week YTD 12-months
(Australia) S&P / ASX200 0.7% 17.7% 7.9% (Australia) 2-year gov bonds 0.74% 0.14 (1.04) (1.14)
(Japan) Topix 1.7% 2.9% (9.2%) (Australia) 5-year gov bonds 0.67% 0.14 (1.10) (1.34)
(Singapore) FTSE Strait Times Index 1.2% 2.5% (0.1%) (Australia) 10-year gov bonds 0.89% 0.19 (1.25) (1.49)
(Hong Kong) Hang Seng 3.8% 3.3% (1.1%)
(South Korea) Kospi 200 2.5% 1.4% (9.8%) Rate Week YTD 12-months
(US) S&P 500 1.8% 18.8% 3.5% AUD to USD 0.6846 1.6% (2.9%) (4.9%)
(US) Dow Jones Industrial 1.5% 14.9% 3.1%
(UK) FTSE 100 1.0% 8.2% (0.5%)
The ASX200 closed 0.7% higher for the week to end at 6647 points, as news that US and China agreeing to restart high-
level trade talks increased market optimism. The Australian Dollar closed the week 1.6% higher to end at US68.46,
following news of potential thawing of the US-China trade war and the release of strong Australian trade surplus
numbers.
WINNER:
BOUTIQUE
INVESTMENT
BANKING FIRM
OF THE YEAR
LCC Asia Pacific Insights | Australian Engineering, Contractors & Services Report Page 1Sources: Thomson Reuters Eikon, LCC Research

2. Offshore Oil & Gas Services News – Australia & Abroad
• The US House of Representatives on 11 September 2019 passed two bills blocking oil and gas drilling off the
Atlantic and Pacific coasts and the Florida Gulf Coast. This move sets the hamper President Trump’s push to
expand offshore oil and gas development (CNBC)
• Rystad Energy Research has forecast a flat Oilfield Services market over the coming 2 years driven by lowering
oil prices as a result of potential slowdown in the global economy
• Woodside Energy has entered a venture with Perth based Blue Ocean Monitoring to focus on ocean bottom
seismic data acquisition
Sources: Thomson Reuters Eikon, Company Announcements, LCC research
Ticker News/ Event Ticker News/ Event
CIM
Thiess has been awarded a six year, $1.3bn
contract extensions by Coronado Global
Resources to provide mining services at Curragh
SXE
Has issued 655,034 fully paid ordinary shares on the
vesting and exercise of 2017 Financial Year Performance
Rights
LCM
Announced that the Company Secretary Mr. David
Shaw is leaving the Company
VEE
Appointed a new Chief Financial Officer and Joint
Company Secretary David Rich
LYL
Appoints Justine Campbell as the new Chief
Financial Officer and Company Secretary after the
retirement of current CFO Keith Bakker
VMX
Announced awards of new contracts and preferred
contractor positions totally approx. $43mn across its
service and construction segments
SSM
Announced that the Chief Financial Officer Bob
Grant will retire from the Company at the end of
the 2020 Financial Year
RCL
Renergen announced the appointment of Bohrmeister
Technik as drilling contractor on horizontal well
development
WSP
West Star Industrial announced the win of a $5m
power station contract at FMG’s Eliwana project
News Headlines and Key Sector Developments
WWW.LCCASIAPACIFIC.COM
LCC Asia Pacific Insights | Australian Engineering, Contractors & Services Report
WINNER:
BOUTIQUE
INVESTMENT
BANKING FIRM
OF THE YEAR
We are driven to improve our technical knowledge of the
Resource Services, Oilfield Services, Electrical Services,
Infrastructure Services, Engineering and Resources Sectors, and
seek to be an active member within key industry peak bodies.
Not only does this strategy reinforce our fundamental enjoyment
and drive to better service clients within these Sectors, but it
allows us to continually build deep operational and business
knowledge of both broad and niche industries.
This differentiates LCC from other Advisory Firms as we deliver
much more to the Client Leadership Team and Board of
Directors than “commoditised” transactional experience and
“general advice”
LCC’s Sector Association Involvement
Page 2

3. (20%)
(15%)
(10%)
(5%)
0%
5%
10%
15%
20%
25%
30%
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
LCCASCPI ASX200
(100%)
(50%)
0%
50%
100%
150%
200%
250%
LCCASCPI ASX200
LCC Australian Contractors & Service Providers Index®
(LCCACSPI)
WWW.LCCASIAPACIFIC.COM
The LCCACSPI Index highlight the strong market
recovery of the constituents since mid-2016
(after underperforming from 2011 to 2016)
Since 2011 Rolling 1 year
Since 2011 Rolling 1 year
Over the past year, the sector has broadly tracked
the ASX200, with the index performing strongly
since June 2019 as a result of the strong share
price performance of small cap companies
While the Engineering Services constituents
(within the Index) have outperformed (tracking
sideways from 2011 to 2016) – Mining Services
players had enjoyed a stronger market rally owing
to their larger fall pre-2016
While confidence has returned to the sector, the
market is wary of lofty valuations of some of these
players following the share price rally in 2016/17
WINNER:
BOUTIQUE
INVESTMENT
BANKING FIRM
OF THE YEAR
LCC Asia Pacific Insights | Australian Engineering, Contractors & Services Report Sources: Thomson Reuters Eikon, LCC Research
(30%)
(20%)
(10%)
0%
10%
20%
30%
40%
50%
60%
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Jul-19
Aug-19
Sep-19
LCCASCPI Engineering Services
Mining Services Others
(150%)
(100%)
(50%)
0%
50%
100%
150%
200%
250%
300%
350%
LCCACSPI Engineering Services
Mining Services Others
Page 3

4. ASX-listed Companies
LCC Asia Pacific Insights | Australian Engineering, Contractors & Services Report Sources: Thomson Reuters Eikon, LCC Research
WWW.LCCASIAPACIFIC.COM
WINNER:
BOUTIQUE
INVESTMENT
BANKING FIRM
OF THE YEAR
Page 4
Ticker Company Name
Market Cap
(A$ m)
Open Price
(A$)
Close Price
(A$)
Week High
(A$)
Week Low
(A$)
Volume
Trend
EV/
EBITDA
EV/
EBIT
Engineering Services
ACF.AX Acrow Formwork and Construction Services Ltd 48 0.29 0.27 0.29 0.27 ▼ (5.3%) 3.0x 3.3x
AJL.AX AJ Lucas Group Ltd 109 0.14 0.15 0.15 0.12 ▲ 3.6% 13.6x 20.3x
BOL.AX Boom Logistics Ltd 70 0.16 0.16 0.16 0.16 ▼ (3.0%) 6.2x n.m.
BPP.AX Babylon Pump & Power Ltd 8 0.02 0.02 0.02 0.02 ▲ 5.9% n.m. n.m.
BSA.AX BSA Ltd 182 0.38 0.43 0.43 0.37 ▲ 11.8% 5.2x 6.4x
CDD.AX Cardno Ltd 435 0.95 0.98 0.96 0.92 ▲ 2.6% 8.6x 15.4x
CIM.AX CIMIC Group Ltd 9,974 31.31 30.91 31.24 28.88 ▼ (0.3%) 5.2x 8.6x
CVL.AX Civmec Ltd 209 0.28 0.39 0.36 0.28 ▲ 11.6% 13.3x 24.9x
DCG.AX Decmil Group Ltd 223 0.92 0.94 0.92 0.91 ▲ 1.6% 5.9x 6.6x
DOW.AX Downer EDI Ltd 4,567 7.70 7.68 7.64 7.33 ▼ (0.4%) 7.4x 13.6x
EGN.AX Engenco Ltd 156 0.50 0.50 0.50 0.50 — 0.0% 8.9x 11.9x
FWD.AX Fleetwood Corp Ltd 181 1.70 1.91 1.83 1.70 ▲ 12.4% 4.4x 5.8x
GNG.AX GR Engineering Services Ltd 141 0.90 0.92 0.91 0.90 ▲ 2.2% 11.3x 13.2x
JLG.AX Johns Lyng Group Ltd 398 1.93 1.80 1.80 1.69 ▼ (2.2%) 17.3x 20.4x
LCM.AX LogiCamms Ltd 47 0.21 0.24 0.23 0.21 ▲ 23.7% 46.0x n.m.
LLC.AX LendLease Group 9,539 17.02 16.91 16.93 16.65 ▼ (0.9%) 40.2x 72.8x
LYL.AX Lycopodium Ltd 226 5.72 5.69 5.75 5.68 ▼ (0.2%) 4.5x 4.7x
MND.AX Monadelphous Group Ltd 1,527 15.81 16.19 15.69 14.98 ▲ 1.8% 14.9x 18.9x
PGX.AX Primero Group Ltd 57 0.39 0.38 0.38 0.36 ▼ (5.0%) 4.1x 4.6x
RDG.AX Resource Development Group Ltd 9 0.02 0.02 0.02 0.01 ▼ (11.8%) 1.0x 5.6x
SND.AX Saunders International Ltd 31 0.31 0.30 0.30 0.30 — 0.0% n.m. n.m.
SRG.AX SRG Global Ltd 191 0.44 0.44 0.44 0.42 ▼ (2.2%) 10.5x 210.5x
SSM.AX Service Stream Ltd 1,101 2.84 2.71 2.74 2.66 ▼ (5.6%) 11.7x 14.1x
SXE.AX Southern Cross Electrical Engineering Ltd 136 0.54 0.58 0.55 0.54 ▲ 8.4% 3.7x 4.6x
SOP.AX SML Corporation Ltd 11 0.05 0.05 0.05 0.05 ▼ (4.0%) 67.1x n.m.
TPP.AX Tempo Australia Ltd 13 0.06 0.05 0.05 0.05 ▼ (3.7%) n.m. n.m.
VMG.AX VDM Group Ltd 14 0.00 0.00 0.00 0.00 ▼ (33.3%) n.m. n.m.
VMX.AX Valmec Ltd 37 0.28 0.30 0.28 0.27 ▲ 7.3% 4.7x 6.3x
VRS.AX Veris Ltd 22 0.06 0.06 0.06 0.06 ▲ 1.8% 6.7x 58.4x
WOR.AX WorleyParsons Ltd 6,633 12.00 12.78 12.51 11.71 ▲ 4.0% 17.5x 21.2x
Mining Services
ASL.AX Ausdrill Ltd 1,488 2.02 2.17 2.10 2.00 ▲ 8.8% 6.9x 20.0x
ALQ.AX ALS Ltd 3,884 7.64 8.05 7.94 7.64 ▲ 5.0% 12.9x 16.4x
ANG.AX Austin Engineering Ltd 101 0.17 0.18 0.18 0.16 ▲ 2.9% 6.5x 10.0x
BLY.AX Boart Longyear Ltd 184 0.01 0.01 0.01 0.01 ▲ 16.7% 8.1x 12.6x
EHL.AX Emeco Holdings Ltd 679 1.88 2.10 2.05 1.82 ▲ 11.1% 5.6x 10.1x
IMD.AX Imdex Ltd 555 1.35 1.47 1.38 1.33 ▲ 8.5% 10.2x 14.0x
IPL.AX Incitec Pivot Ltd 5,267 2.89 3.28 3.16 2.74 ▲ 2.2% 11.5x 21.1x
MAH.AX Macmahon Holdings Ltd 461 0.21 0.22 0.22 0.21 ▲ 4.9% 3.0x 7.6x
MIN.AX Mineral Resources Ltd 2,600 13.20 13.82 13.62 12.85 ▲ 4.5% 8.2x 11.0x
MLD.AX MACA Ltd 241 0.93 0.90 0.92 0.89 ▼ (1.6%) 7.0x 102.3x
MSV.AX Mitchell Services Ltd 106 0.06 0.06 0.06 0.06 — 0.0% 4.8x 8.5x
MYE.AX Mastermyne Group Ltd 119 1.24 1.18 1.22 1.14 ▼ (2.9%) 5.2x 9.0x
NWH.AX NRW Holdings Ltd 923 2.36 2.45 2.41 2.34 ▲ 1.2% 6.6x 11.4x
ORI.AX Orica Ltd 8,228 21.22 21.62 21.56 21.09 ▲ 0.4% 11.7x 17.2x
RUL.AX RPMGlobal Holdings Ltd 159 0.68 0.74 0.72 0.67 ▲ 8.8% 22.4x 71.0x
SWK.AX Swick Mining Services Ltd 57 0.25 0.25 0.25 0.24 ▼ (2.0%) 3.1x 21.8x
Marine Services
ASB.AX Austal Ltd 1,587 4.26 4.52 4.49 4.10 ▲ 7.1% 11.11 16.19
MCE.AX Matrix Composites & Engineering Ltd 37 0.37 0.37 0.37 0.35 — 0.0% n.m. n.m.
MRM.AX MMA Offshore Ltd 172 0.20 0.20 0.20 0.19 ▲ 5.3% 12.4x n.m.
NMS.AX Neptune Marine Services Ltd 17 0.28 0.28 0.28 0.28 ▼ (6.7%) 14.3x n.m.
VEE.AX VEEM Ltd 76 0.56 0.59 0.56 0.56 ▲ 4.5% 20.8x 34.4x
ZGL.AX Zicom Group Ltd 18 0.11 0.08 0.11 0.08 ▼ (26.4%) n.m. n.m.
Facilities Management & Services
AEI.AX Aeris Environmental Ltd 53 0.25 0.25 0.24 0.23 ▼ (2.0%) n.m. n.m.
ALQ.AX ALS Ltd 3,884 7.64 8.05 7.94 7.64 ▲ 5.0% 12.9x 16.4x
GMG.AX Goodman Group 25,013 14.45 13.68 14.18 13.64 ▼ (5.8%) 54.2x 54.2x
HIL.AX Hills Ltd 63 0.20 0.27 0.26 0.20 ▲ 42.1% 5.5x 13.3x
MIL.AX Millennium Services Group Ltd 13 0.25 0.29 0.30 0.25 ▲ 16.3% n.m. n.m.
ENE.AX Enevis Ltd 11 0.19 0.16 0.19 0.14 ▼ (3.0%) 35.6x 70.3x
TPS.AX Threat Protect Australia Ltd 34 0.17 0.17 0.17 0.17 — 0.0% 38.3x n.m.
UBN.AX Urbanise com Ltd 21 0.03 0.03 0.03 0.03 ▲ 20.0% n.m. n.m.
Weekly
change (%)

5. lccasiapacific.com.au SYDNEY | BRISBANE | NEW YORK
LCC Asia Pacific is a boutique investment banking practice, providing independent
corporate finance & strategy advice to clients in Australia and across Asia Pacific
markets. We have acted for ambitious clients ranging from “emerging” companies,
up to Fortune 100 & “Mega” Asian listed entities.
LCC Asia Pacific provides clear, unbiased counsel to CEOs and Boards of Directors
considering growth strategies, business transformation and challenging corporate
decisions. We understand that to service such clients requires a high performance
approach, and a tenacity to deliver results.
For more information, visit www.lccasiapacific.com.au.
© 2019 LCC Asia Pacific
Founded in 2004, LCC Asia Pacific is an award-winning boutique investment banking & strategic advisory
firm that specializes in the engineering & contracting sector as well as general & specialised services –
including mining, drilling, energy & oilfield (onshore & offshore)
We provide our clients with key insights on the Engineering, Contracting and Oil Field Services Sectors –
assisting with in depth strategy formulation and execution of both organic and M & A engagements
About LCC Asia Pacific – we deliver Deal Craft™
Nicholas Assef
Engineering & Contracting Services Sector Leader
naa@lccapac.com
Disclaimer
This general information has been prepared by LCC Asia Pacific Pty. Limited ("LCC"). The research is based on public 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.
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