DECMIL GROUP LIMITED (DCG)



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General Information
Company Name: Decmil Group Limited
Stock Code: DCG
Website: www.decmilgroup.com.au
GICS Sub-Industry: Construction & Engineering
Market Cap ($M): 252
Equiv. Shares (M): 168

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 1.500 $ 1.600 $ 1.600 $ 1.485 $ 1.610 386,472 $ -0.110  -6.832 %

Current Broker Consensus Recommendation more
Recommendation: Hold
Recommendation Date: 3rd May 2013
12 Month Target Price (average): $2.25
Brokers Surveyed: 2

Company Overview

Business Description:
Decmil Group Limited (DCG) is engaged in multi-disciplined design, civil engineering and construction company for the oil and gas, resources and infrastructure sectors. Its principal activities are as follows: civil works; industrial and non-process infrastructure; accomodation and government infrastructure.

Strategy Analysis:
DCG sold its non-core businesses (Novocoat/Matrix Engineers/Eastman Fort) in 2010 in order to refocus on its revenue-generating businesses, retaining Decmil Australia as the core asset. DCG is targeting sustainable growth through a continued focus on client relationships. Arguably the most important strategy would be to ensure retention of current big-ticket clients such as BHP Billiton, Chevron, Woodside and Rio Tinto. Labour market conditions are a key risk to the company Decmil Group reported NPAT of $44.11m for the half-year ended 31 December 2012. Revenues from ordinary activities were $332.94m, up 58% from the same period last year. Diluted EPS was 26.30 cents compared to 10.02 cents last year. Net operating cash flow was $37.07m compared to $29.59m last year. The interim dividend declared was 4.0 cents compared with 2.5 cents last year.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2014  F 48.5 28.7 14.8 5.2 11.0 7.3 --
2013  F 42.1 25.0 -5.3 6.0 10.0 6.7 --
2012  A 39.1 26.4 43.5 9.0 9.0 3.8 100.0
Source: Aspect actuals / Thomson IBES 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
Clough (CLO) $914 M 0.0077 -- -- 21.2094 -- -- 0.0221 -- --
Decmil Group (DCG) $271 M 0.4332 -0.0545 0.1501 6.0916 6.4426 5.6019 0.0559 0.0621 0.0683
Leighton (LEI) $6,222 M 0.3175 0.2583 0.1296 13.8618 11.0162 9.7526 0.0434 0.0537 0.0585
Monadelphous (MND) $1,510 M 0.3321 0.2191 -0.0240 11.6598 9.5639 9.7987 0.0753 0.0867 0.0894
UGL (UGL) $1,216 M 0.0626 -0.3953 0.2082 7.2085 11.9203 9.8662 0.0959 0.0714 0.0808

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
DCG 0.23 5.97 1.11 1.39 0.40
Market 0.84 14.8 1.26 1.90 1.75
Sector 0.72 7.36 1.06 1.39 0.43

Directors
Name Position Start Date
Mr Scott Criddle Chief Executive Officer,Managing Director 28 April 2010
Mr Giles Everist Non-Executive Chairman 04 January 2010
Mr William (Bill) Healy Non-Executive Director 23 April 2009
Mr Lee Verios Non-Executive Director 28 April 2010
Mr Denis Criddle Non-Executive Director 31 August 2007
Mr Trevor Davies Non-Executive Director 28 March 2013

Management
Name Position
Justine Campbell Chief Financial Officer,Company Secretary
Ray Sputore Managing Director, Decmil Australia Pty Ltd
Brad Kelman Managing Director, Decmil Investments Pty Ltd

Substantial Shareholders
Holding Name
8,650,000 (5.18%) Robert Franco
13,468,422 (8.06%) Thorney Investment Pty Ltd
15,446,896 (9.24%) Acorn Capital Limited
22,273,232 (13.33%) Broadway Pty Ltd
8,853,361 (5.30%) AMP Limited
8,487,399 (5.08%) Commonwealth Bank of Australia

Calendar of Events
Date Event
18 February 2014 Report (Interim)
14 October 2013 Report (Annual)
22 August 2013 Report (Annual)
22 August 2013 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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