AUSDRILL LIMITED (ASL)



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General Information
Company Name: Ausdrill Limited
Stock Code: ASL
Website: www.ausdrill.com.au
GICS Sub-Industry: Construction Machinery & Heavy Trucks
Market Cap ($M): 287
Equiv. Shares (M): 312

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 0.945 $ 0.925 $ 0.950 $ 0.920 $ 0.920 568,093 $ 0.025  2.717 %

Current Broker Consensus Recommendation more
Recommendation: Hold
Recommendation Date: 4th Mar 2014
12 Month Target Price (average): $1.123
Brokers Surveyed: 6

Company Overview

Business Description:
Ausdrill Limited (ASL) is a diversified mining services company with key operations in Australia and Africa. The offered services include drill and blast, grade control, water well drilling and equipment sales, hire and parts. In addition, Ausdrill provides load and haul and crusher feed services as well as specialist underground mining services in Africa. The Australian operations are primarily based in Western Australia and the African operations are primarily located in Ghana.

Strategy Analysis:
ASL strategy is to vertically integrate and become 'the complete service company¬ī to the mining industry in Australia and Africa. ASL has been extremely successful in acquiring businesses and integrating the operations, with the Brandrill operations now achieving similar margins to ASL. Participating in joint ventures has provided significant low-cost opportunities for the company to gain skills and expand operations to include coal seam gas drilling in Australia and underground gold mining in Africa. ASL has developed a strong niche, providing drill and blast contract services to the gold mining industry. But while project work is buoyant, contract renewal and extensions are becoming more difficult due to increasing competition for tenders. The appointment of former Leighton¬īs CEO Wal King to the Board provides ASL with detailed experience and knowledge of the construction and contract mining industry. Ausdrill reported NPAT down 11.9% to $48.14m for the half-year ended 31 December 2012. Revenues from ordinary activities were $580.16m, up 13.4% from the same period last year. Whilst revenues have increased as a result of increased activity in Africa, the Group's profits were impacted by a number of significant items as well as a general slowdown in activity in the Australian mining sector from September 2012 onwards. Diluted EPS was 15.67 cents compared to 17.97 cents last year. Net operating cash flow was $52.88m compared to $68.32m last year. The interim dividend declared was 6.5 cents in line with 6.5 cents last year. Looking ahead, at an operating level the second half should see the benefit of a full six month contribution from the BTP acquisition as well as the ramp-up at the Syama project.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2015  F 29.2 9.4 -17.1 9.8 4.0 4.3 100.0
2014  F 35.2 11.4 -65.0 8.1 4.5 4.9 100.0
2013  A 100.5 32.5 -8.1 7.9 12.0 4.6 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F
Ausdrill (ASL) $287 M -0.1311 -0.6575 0.4136 2.8643 8.3636 5.9164 0.1304 0.0530 0.0765

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
ASL 0.97 6.16 0.35 10.00 0.26
Market 1.07 16.0 1.27 1.98 1.72
Sector 1.13 11.0 1.03 10.00 0.42

Directors
Name Position Start Date
Mr Ronald George Sayers Managing Director 06 March 1987
Mr Terence Edward O'Connor Non-Executive Chairman 03 November 1993
Mr Wallace Macarthur King Non-Executive Deputy Chairman,Non-Executive Director 05 April 2011
Mr Terrence John Strapp Non-Executive Director 25 July 2005
Mr Donald James Argent Non-Executive Director 25 July 2012
Mr Mark Anthony Connelly Non-Executive Director 25 July 2012

Management
Name Position
Mark Joseph Hughes --
J E Martins Chief Financial Officer
C Tuckwell Chief Operating Officer African Operations (from 1 August 2012)
A J McCulloch Chief Operating Officer Australian Operations
Efstratios (Strati) Gregoriadis Company Secretary
Domenic Mark Santini Company Secretary
M C Crocker Group Engineering Manager

Substantial Shareholders
Holding Name
36,846,782 (11.80%) Cherry Garden Nominees Pty Ltd
16,064,489 (5.28%) Bremerton Pty Ltd
16,787,171 (5.28%) Invesco Australia Ltd

Calendar of Events
Date Event
27 February 2015 Report (Interim)
10 October 2014 Report (Annual)
28 August 2014 Report (Annual)
28 August 2014 Report (Prelim)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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