Aj Lucas Group Limited · ASX:AJL
Aj Lucas — FY2008 Earnings Presentation
19 slides from Aj Lucas's earnings presentation, Aug 26, 2008
Slide 1: Infrastructure solutions: Results 2007-2008
Infrastructure solutions Water & wastewater Energy Resources Results 2007-2008 26 August 2008 Tuesday, 26 August 2008 1
Slide 2: Group financial performance
Group financial performance 2008 2007 Change Revenue $424.3m $216.4m +96% EBITDA $37.4m $14.9m +151% EBIT $26.0m $5.9m +388% Net profit after tax $13.5m $6.4m +111% Underlying EBITDA $44.5m $19.0m +134% Net cash from operations $50.1m $9.6m +421% Earnings per share 24.5c 11.9c +106% Dividend per sha
Slide 3: Highlights
Highlights • Revenue growth of 460% over four years from $75m to $420m • Improved margin reflects: • Change in business mix • Improved systems and management controls • Better contract conditions • “Balanced business growth across different sectors leads to more sustainable earnings stream Tuesday,
Slide 4: Highlights (continued)
Highlights (continued) • Strong cash flow supports growth without requirement for equity • Drilling technology leadership enhances demand for services and creates CSG investment opportunities • Acquisition of Mitchell Drilling strengthens Lucas’ market leadership in drilling services • Rapidly matur
Slide 5: Analysis of profit growth
Analysis of profit growth $30.0M $0.7M $3.8M $6.0M $26.1M $22.5M $23.0M $1.8M $21.2M $0.8M $3.5M $20.1M $20.4M $20.4M $12.4M $16.7M $15.0M $7.5M $4.2M $4.2M $0M 07 h th q s t s n 08 es se fee t Ac io ow ow er en at n n D l t Ju Ju Gr Gr tis ga In p CW ex or T T Le ue in PB PB am A g en ar G& v M le
Slide 6: Cash flow & balance sheet
Cash flow & balance sheet • Operating cash flow increased 421% to $50m • Interest cover very high (6.7X) due to strong cash generation • Gearing ratio reduced from 61.1% to 52.2% • All borrowing facilities renegotiated in August 2008 – repayment profile extended • Match debt finance maturity profile
Slide 7: Pipelines
Pipelines 2008 2007 • Overall margin improvement 0.9% Revenue $218.5m $73.2m • Employee base expanding + 190 people FY 08 EBITDA $20.0m $4.3m • Acceptance of CSG as viable energy source and continuing drought Impairments – $1.8m support strong growth Underlying EBITDA $20.0m $6.1m • Integration with
Slide 8: Drilling
Drilling • Focus on coal & CSG, both sectors 2008 2007 growing strongly Revenue $88.4m $67.6m • Innovative drilling techniques leading commercialisation of CSG EBITDA $18.1m $14.6m • Strong market conditions (rig utilisation 92%) Non recurring/ non operational items $6.1m $(2.2)m • Contract terms &
Slide 9: Construction & Infrastructure
Construction & Infrastructure 2008 2007 • Targeted change in Revenue $117.3m $75.5m business mix supporting margin improvement EBITDA $3.2m $0.5m • Expansion into NSW North Coast civil and Non-operational items $1.0m $1.5m infrastructure markets • Construction market is tight, Underlying EBITDA $4.2
Slide 10: Lucas Mitchell Drilling
Lucas Mitchell Drilling • Covers all areas on East Coast • Complete range of drilling services Mackay Moranbah • Full-service ‘one-stop CSG shop’ Roma Rockhampton • 650 people Darra Gunnedah • Brisbane headquarters Muswellbrook • 88 rigs Minto Wyong Tuesday, 26 August 2008 10
Slide 11: Lucas Mitchell Drilling clients
Lucas Mitchell Drilling clients Tuesday, 26 August 2008 11
Slide 12: Coal seam gas
Coal seam gas “The pressing need to reduce greenhouse gas emissions, plus the sheer value of the resource (estimated at $200 billion) will make coal seam methane a major resource for the future.” Lucas annual report, 2000 Tuesday, 26 August 2008 12
Slide 13: Coal seam gas
Coal seam gas • Lucas has a portfolio of domestic and international CSG and shale gas assets • Australian corporate sector CSG restructuring will continue • Lucas intends to restructure/rehouse its Australian CSG assets • Gloucester gas forecast to market at end 2009/beginning 2010 • Lucas is the on
Slide 14: Water
Water “Water inflows are shrinking, populations are growing, water restrictions and leak reduction are approaching their limits. So water security has quickly become a national priority.” Lucas annual report, 2007 Tuesday, 26 August 2008 14
Slide 15: Water
Water • Lucas is investing in water and water technology opportunities • CSG sector, municipal wastewater, recycled water all need treatment • Lucas has the exclusive Australasian licence for Origin Water’s compact water treatment, membrane bioreactor and reverse osmosis systems • Partnerships and s
Slide 16: Looking ahead
Looking ahead Alternative/sustainable energies • Geosequestration of CO2 • Geothermal energy development • Shale gas in Europe • Tidal energy Water & wastewater opportunities All harness our core expertise and leverage Lucas’ existing intellectual capabilities and market knowledge. Tuesday, 26 Augus
Slide 17: Group outlook
Group outlook • Sector fundamentals remain strong: energy, water & wastewater, resources and infrastructure • Contribution from Mitchell Drilling • We are better placed than ever in terms of personnel and equipment to capitalise on the outlook for all sectors and Lucas’ position within each sector •
Slide 18: Group outlook (continued)
Group outlook (continued) • Continued investment in: • Emerging technologies • Engineering processes • Staff training & skill development • Systems and procedures • Forecast capex 2009 $38 million, to be funded from existing lines and operating cash flow • Revenue forecast at more than $600 million
Slide 19: This presentation has been compiled by AJ Lucas Group Limited from sources it believes
This presentation has been compiled by AJ Lucas Group Limited from sources it believes to be reliable. However it is not warranted as to its completeness or accuracy. This presentation is not an offer to sell or a solicitation to buy any securities. As it is prepared for general circulation, all rea