Ausgroup

Ausgroup: Reported good set of 4Q12 results. Rev at A$175.3m, +18.3% yoy and -3.8% qoq, while net profit at $8.3m, +88% yoy and +22% qoq. Result brings FY12 rev to $632m, +5% yoy and net profit to $23.3m, +88.1% yoy. Gross margins increased to 12.4% vs 9.6% yoy. Strong rev was due to grp’s integrated services segment and fabrication and manufacturing segments which recorded an increase in activity, but the major projects segment posted a fall in rev due to the timing of awards of contracts. Grp has proposed a div of 1c/share (0.64c final and 0.36c special). Grp’s fundamentals remain strong with a net cash position of $26.7m, while orderbook stands at A$324m, underpinning earnings visibility for ½ a yr. Grp has secured A$792m contracts in FY12 and has about A$593m worth of tenders submitted to date. (Speaking to grp’s mgt, reveals that they are fairly confident that FY13 orderwins should exceed that of FY12) Going forward, grp remains confident of prospects, noting that expressions of interests by clients are at record levels, with a number of committed projects entering construction and maintenance stages, which would lead to increased demand for integrated service providers. At current price, grp trades at just 6x P/E. (Ex-cash at 5.1x) vs Civmec’s forward annualized P/E of approx. 19x. Other key notable factors during analyst briefing was the presence of some fund managers, which includes Lumiere Capital, a well-known local fund specializing in investing in small-mid cap co’s.