Lincoln Crowne & Company Weekly report on the Australian engineering & Mining Services Sectors for week ended 6th December 2013

1. WEEKLY
Australian Engineering & Mining Services
6 December 2013
WWW.LCC.ASIA
M&A Rumour and Activity
The Australian market was down over the week with the S&P / ASX100 ending at 4312 points. The RBA Board decided to
leave the cash rate unchanged at 2.5% and the Australian dollar ended the week at US 91 cents.
S&P Dow Jones announced changes to the S&P/ASX indices as a result of its December quarterly review. The recent
downturn in the sector caused several companies to fall out of the S&P/ASX 200 Index with Boart Longyear and Fleetwood
both removed.
Two deals were announced this week.
In a reverse merger, FRR Corporation (ASX:FRR) signed an agreement to acquire 100% of the shareholding in Newlease
Pty Limited (www.newlease.com.au), a high growth business offering cloud based subscription software licensing solutions
and services. FRR was formerly a provider of commercial air conditioners and fridges until it entered administration in 2011.
As part of the shareholder approval process, FRR Corporation Limited will change its name to Rhype Limited. The reverse
takeover is still subject to shareholder approval and ASX re-compliance.
Construction and building contractor Bina Goodyear Bhd (KLSE:BGYEAR) (www.binagoodyear.com.my) entered into a
business acquisition agreement to acquire several construction projects from property developer Astinas Construction &
Development Sdn Bhd for A$3.26M.
News Headlines and Key Sector Developments
Ticker News/Event
Ticker News/Event
BYL
Wholly-owned subsidiary, Bellamack Pty Ltd, has been selected to
develop Stage 2 of the Zuccoli residential development in Darwin.
The development will deliver 440 to 460 mixed-density residential
lots over four years to 2017, with expected revenue of $90M to
$100M
MIN
Reed Industrial Minerals Pty Ltd, owned 70:30 by Reed
Resources Ltd and Mineral Resources Ltd, has successfully
produced battery grade lithium hydroxide from its Mt Marion
Project in WA. A semi-pilot scale test work for the continuous
production of battery grade lithium hydroxide will commence
immediately with completion anticipated in June Q2014
FWD
In December 2012, Fleetwood entered into an agreement with Rio
Tinto to provide accommodation services at Searipple Village in
Karratha. Fleetwood and Rio Tinto have agreed to extend the term
of the agreement for a further 6 months commencing 1 December
2013
SND
Received two Letters of Intent for new projects in NSW. These
are expected to lead to fully executed contracts to the value of
approximately $18M. One Letter is for the design and
construction of 14 chemical storage tanks at Port Botany. The
other is for the refurbishment of two tanks and the design and
construction of 1 tank for fuel storage and distribution in
Newcastle
LEI
Leighton Contractors Pty Limited, as part of the Wellington
Gateway Partnership, has been selected by the New Zealand
Transport Agency as the preferred proponent to deliver the NZ$1B
Transmission Gully Motorway. The value to Leighton Contractors
is expected to be in excess of NZ$800M
WOR
Has been appointed on the development of major Russian
LNG production and export facility “Vladivostok LNG”. The
expected revenue to WOR from the project is RUR$2.19B
(A$70M), which includes the FEED (front-end engineering
design) deliverables for two 5MTPA LNG trains with supporting
utilities and infrastructure including loading terminal topsides
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
6 December 2013
Ticker Company Name
AJL
ASL
AAX
ANG
BLY
BKN
BYL
BOL
BSA
CDD
CGH
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
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)
241
255
80
226
125
890
41
64
26
1,002
114
73
299
14
2,004
78
47
111
10
147
51
83
79
63
104
5,264
91
162
420
132
57
1,991
61
1,441
67
16
340
19
354
405
35
77
123
57
94
134
30
63
6
512
1,017
19
123
3,976
149
0.96
0.78
0.70
3.30
0.30
5.53
0.35
0.14
0.12
6.80
0.36
0.29
1.86
0.29
4.75
0.69
0.16
0.20
0.05
2.86
0.74
0.53
0.52
0.30
0.61
16.25
1.56
4.30
2.40
0.12
0.78
10.84
0.64
16.44
0.04
0.06
1.18
0.10
3.02
2.84
0.13
0.83
0.57
0.22
1.21
0.93
0.48
0.33
0.04
1.13
6.41
0.01
0.90
16.43
0.92
0.90
0.82
0.65
3.09
0.28
5.26
0.38
0.14
0.12
6.94
0.36
0.29
1.78
0.30
4.61
0.64
0.15
0.19
0.05
2.43
0.59
0.49
0.53
0.30
0.50
15.61
1.30
4.15
2.40
0.11
0.75
10.70
0.64
15.61
0.04
0.06
1.22
0.10
2.99
2.97
0.14
0.98
0.55
0.20
1.21
0.83
0.48
0.29
0.04
1.00
6.23
0.01
0.85
16.11
0.81
0.97
0.85
0.74
3.30
0.30
5.55
0.38
0.15
0.13
7.13
0.41
0.30
1.90
0.30
4.86
0.70
0.16
0.21
0.05
2.86
0.75
0.53
0.53
0.31
0.61
16.38
1.56
4.30
2.43
0.12
0.78
11.00
0.67
16.46
0.04
0.06
1.25
0.11
3.09
3.16
0.14
1.00
0.57
0.22
1.26
0.93
0.48
0.33
0.04
1.19
6.49
0.01
0.90
16.56
0.94
0.90
0.76
0.57
3.00
0.26
5.17
0.35
0.13
0.12
6.53
0.36
0.29
1.72
0.27
4.56
0.60
0.15
0.19
0.05
2.26
0.56
0.49
0.52
0.28
0.49
15.51
1.26
3.88
2.34
0.10
0.70
10.54
0.63
15.56
0.04
0.06
1.14
0.10
2.91
2.82
0.13
0.83
0.53
0.20
1.20
0.82
0.47
0.29
0.04
1.00
6.04
0.01
0.83
15.90
0.77
Weekly Volume
% Change
▼
▲
▼
▼
▼
▼
▲
▼
▼
▲
—
▼
▼
▲
▼
▼
▼
▼
▼
▼
▼
▼
▲
▲
▼
▼
▼
▼
—
▼
▼
▼
—
▼
▲
▲
▲
—
▼
▲
▲
▲
▼
▼
—
▼
—
▼
—
▼
▼
▲
▼
▼
▼
-6.2%
5.2%
-7.1%
-6.4%
-6.8%
-4.9%
7.1%
-3.6%
-4.2%
2.1%
0.0%
-1.7%
-4.6%
5.3%
-2.9%
-8.0%
-3.2%
-5.0%
-3.8%
-15.0%
-20.3%
-8.5%
1.0%
1.7%
-18.9%
-3.9%
-16.7%
-3.5%
0.0%
-8.7%
-3.8%
-1.3%
0.0%
-5.0%
2.9%
3.5%
3.4%
0.0%
-1.0%
4.6%
7.7%
17.5%
-3.5%
-9.1%
0.0%
-10.8%
0.0%
-10.8%
0.0%
-11.5%
-2.8%
20.0%
-5.6%
-1.9%
-11.5%
EV/
EV/
EBITDA
EBIT
NM
2.6x
2.2x
5.6x
3.5x
7.4x
2.1x
3.4x
3.7x
8.5x
2.7x
8.3x
3.8x
2.0x
3.6x
7.0x
NM
3.0x
7.3x
4.6x
NM
3.5x
5.8x
4.7x
3.0x
3.3x
5.5x
4.2x
3.3x
1.1x
2.5x
6.2x
5.7x
5.3x
59.5x
1.3x
2.6x
2.2x
6.3x
5.6x
2.9x
8.2x
1.4x
NM
3.4x
3.2x
2.7x
2.1x
NM
5.5x
14.5x
NM
4.7x
8.0x
2.0x
Trend
NM
4.6x
2.8x
6.8x
10.4x
10.9x
3.7x
7.3x
10.8x
10.3x
5.3x
15.3x
4.3x
2.8x
6.6x
8.2x
NM
8.8x
10.0x
7.6x
NM
5.7x
6.3x
6.8x
4.0x
6.8x
5.8x
4.5x
5.1x
2.3x
3.5x
9.3x
75.3x
6.0x
NM
1.7x
3.5x
3.1x
7.7x
7.5x
5.9x
8.8x
3.1x
NM
3.8x
3.9x
9.0x
4.0x
NM
10.8x
27.0x
NM
10.3x
9.0x
9.2x
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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