AUSTAL LIMITED (ASB)



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General Information
Company Name: Austal Limited
Stock Code: ASB
Website: www.austal.com
GICS Sub-Industry: Construction Machinery & Heavy Trucks
Market Cap ($M): 369
Equiv. Shares (M): 346

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 1.100 $ 1.065 $ 1.100 $ 1.060 $ 1.065 104,479 $ 0.035  3.286 %

Current Broker Consensus Recommendation more
Recommendation: Buy
Recommendation Date: 11th Mar 2014
12 Month Target Price (average): $1.14
Brokers Surveyed: 2

Company Overview

Business Description:
Austal Limited (ASB) is a global defence prime contractor. The Company designs, constructs and maintains revolutionary platforms such as the Littoral Combat Ship and the Joint High Speed Vessel for the United States Navy, as well as a range of patrol and auxiliary vessels for defence forces and government agencies globally. Austal’s primary facilities comprise a defence shipyard in Henderson, Western Australia; a defence shipyard in Mobile, Alabama; and a commercial shipyard in Balamban, Philippines.

Strategy Analysis:
ASB offers a diversified range of vessels across a wide geographic market. Its current focus is on commercial and defence shipbuilding but a strong A$ and soft European ferry market is forcing a scale down in commercial shipbuilding in Australia and a refocus on defence work. The newly acquired Philippines shipyard will focus on constructing smaller commercial vessels at a more competitive cost. Recent defence contract wins should lessen earnings volatility, as they tend to span over a few years. The establishment of a Service business with long-term maintenance contracts will also provide another stable revenue stream. Austal reported NPAT of $5.4m for the half-year ended 31 December 2012. Revenues from ordinary activities were $389.41m, up 45.6% from the same period last year. Diluted EPS was 2.14 cents compared to (1.26) cents last year. The net operating cash outflow was $20.92m compared to an outflow of $2.9m in the pcp. No dividend was declared.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2014  F 35.2 10.7 27.2 10.0 2.5 2.3 10.0
2013  F 21.5 8.4 -- 12.7 0.0 0.0 0.0
2012  A -2.7 -1.5 -112.5 -143.8 0.0 0.0 0.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2012 A 2013 F 2014 F 2012 A 2013 F 2014 F 2012 A 2013 F 2014 F
Austal (ASB) $359 M 1.2003 -0.2534 0.2876 7.8528 10.5183 8.1689 0.0000 0.0193 0.0386
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
ASB 1.49 10.18 0.91 10.00 0.32
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 Andrew Bellamy Chief Executive Officer 24 February 2011
Mr John Rothwell Non-Executive Chairman 09 October 1987
Mr Dario A Amara Non-Executive Director 16 August 2005
Mr Charles Roland Giles Everist Non-Executive Director 08 November 2013
Mr David Singleton Non-Executive Director 21 December 2011
Hon Ian Gordon Campbell Non-Executive Director (other) 01 August 2007

Management
Name Position
Greg Jason Chief Financial Officer
Brian Leathers Chief Financial Officer USA
Graham Backhouse President Australia
Joey Turano President Philippines
Craig Perciavalle President USA

Substantial Shareholders
Holding Name
63,903,464 (18.47%) HSBC Custody Nominees
24,582,926 (7.10%) Citicorp Nominees Pty Ltd <CFS Developing Companies A/C>
32,200,745 (9.31%) Austro Pty Ltd
26,595,621 (7.69%) Longreach (WA) Pty Ltd
50,322,109 (14.54%) J P Morgan Nominees Australia Limited
43,992,038 (12.71%) National Nominees Limited

Calendar of Events
Date Event
26 February 2015 Report (Interim)
01 October 2014 Report (Annual)
29 August 2014 Report (Annual)
29 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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