Transfield Services Limited (TSE)

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General Information
Company Name: Transfield Services Limited
Stock Code: TSE
GICS Sub-Industry: Diversified Commercial & Professional Services
Market Cap ($M): 728
Equiv. Shares (M): 512

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 1.375 $ 1.415 $ 1.415 $ 1.370 $ 1.420 20,477 $ -0.045  -3.169 %

Current Broker Consensus Recommendation more
Recommendation: Hold (2.5)
Recommendation Date: 16th Apr 2015
Brokers Surveyed: 2

Company Overview

Business Description:
Transfield Services Limited (TSE) is a provider of Operations and maintenance, asset management, project and capital management outsourcing and infrastructure development services. TSE operates in Australia, New Zealand and the Americas (comprising the USA, Canada and Chile.TSE business units include Infrastructure; Defence, Social and Property; Resources and Industrial.

Strategy Analysis:
TSE holds strong market share in Australia and NZ in outsourced asset maintenance. Contracts are usually of medium to long term duration across numerous industries such as power, rail, road, oil and gas, minerals, oil refineries, petrochemicals, water utilities and telecommunications. The willingness to establish alliance-style contracts allows the company to extend its skills to new areas. Solid cash flows and balance sheet support a strategy of growth via acquisition. Most customers are blue-chip and there are solid growth prospects. Transfield Services reported a net loss of $246.91m for the half-year ended 31 December 2012. Revenues from ordinary activities were $1.75bn, up 15% from the same period last year. Basic and Diluted EPS was (48.0) cents compared to 6.0 cents last year. Net operating cash flow was $30.65m compared to $25.64m last year. The interim dividend declared was 3.0 cents compared with 5.0 cents last year. A return to earnings growth for the group is expected in FY14, driven by: further overhead reduction flowing from the flatter ANZ organisation structure and integration of Easternwell in the ANZ Resources & Energy business; a program to identify and streamline contract overheads; a detailed operating model review to increase productivity and service level effectiveness; and optimisation of procurement and purchasing repetitive processes through automation or outsourcing.

Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F 89.2 17.4 6.1 8.2 7.0 4.9 5.0
2015  F 84.0 16.4 15.7 8.7 0.0 0.0 0.0
2014  A 72.6 14.2 86.8 7.1 0.0 0.0 0.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
Brambles (BXB) $18,489 M -0.1222 0.1999 0.0947 28.8368 24.0326 21.9535 2.29 2.38 2.48
Downer EDI (DOW) $1,907 M 0.0083 -0.0128 -0.0339 9.5217 9.6455 9.9840 5.25 5.58 5.71
Mineral Resources (MIN) $1,154 M 0.3748 -0.6440 -0.2877 4.6015 12.9249 18.1443 10.06 3.25 3.25
McMillan Shakespeare (MMS) $999 M -0.1123 0.1960 0.1423 16.7950 14.0426 12.2936 4.26 4.59 5.08
Transfield Services (TSE) $725 M 0.2435 -0.0672 0.0516 8.1981 8.7888 8.3579 0.00 0.00 5.29

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
TSE 1.03 8.69 0.95 10.00 0.20
Market 0.91 16.4 1.30 2.38 1.62
Sector 0.91 13.4 1.57 1.67 1.03

Name Position Start Date
Mr Graeme Peter Hunt Chief Executive Officer,Managing Director 07 May 2012
Mr Dean Anthony Pritchard Non-Executive Director 28 October 2013
Mr Geoffrey Kleemann Non-Executive Director 19 September 2014
Mr Douglas Norman Snedden Non-Executive Director 21 December 2009
Mr Roy McKelvie Non-Executive Director 31 August 2012
Ms Katherine (Kathy) Anne Hirschfeld Non-Executive Director 28 October 2013
Ms Diane Lee Smith-Gander Non-Executive Director,Non-Executive Chairman 22 October 2010

Name Position
Ian Maxted Chief Development Officer and Chief Executive Defence, Social and Property - ANZ
Sandra Dodds Chief Executive - Infrastructure ANZ
Stuart Nevison Chief Executive - Operations, Maintenance and Well servicing
Joe Sofra Chief Executive - Resources and Industrials ANZ
Stephen Phillips Chief Executive Business Services
Kate Munnings Chief Executive Operations
Vince Nicoletti Chief Financial Officer
Angelique Nesbitt Company Secretary
Philip Wratt President and Chief Executive Americas

Substantial Shareholders
Holding Name
57,849,887 (11.19%) Transfield Holdings Pty Ltd
95,849,104 (18.70%) Allan Gray Australia Pty Ltd
25,712,678 (5.02%) Dimensional Entities

Calendar of Events
Date Event
25 February 2016 Report (Interim)
02 October 2015 Report (Annual)
28 August 2015 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


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