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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 companyÂ´ 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 LeightonÂ´s 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.
Nick Swales, Regional Director, Newcastle Office, Rathbones 27/10/2014 |
â€śIf you want to have a better performance than the crowd, you must do things differently from the crowd.â€ť Sir John Templeton.
Ric Spooner (Chief Market Analyst, CMC Markets) 20/10/2014 |
Today, Australian investors will not have to go it alone buying stocks as they did for much of last week. Bargain hunters this morning will be supported by the morale boosting encouragement of a 3% turnaround in the German Dax and a 264 point rally in the Dow Jones.
Carl Richards, director of investor education at the BAM Alliance 17/10/2014 |
â€śAs odd as it may sound, the sooner you start treating your investments like you treat life, the happier youâ€™ll be with the outcome.â€ť
William H. Gross, Janus Capital Group 16/10/2014 |
â€śFinancial markets are artificially priced. In the bond market, there is nothing normal about a three year German Bund yielding â€śminusâ€ť 10 basis points.â€ť
CMC Markets 8/10/2014 |
Share market indices around the globe are breaking down. While analysts cast around for reasons, itâ€™s clear that a time factor is in play. Simply put, many investors â€śfeelâ€ť a correction is overdue. How low could it go?
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