Aj Lucas Group Limited · ASX:AJL
Aj Lucas — ABN AMRO Morgans Annual Queensland Conference 2007
23 slides from Aj Lucas's conference presentation, Sep 13, 2007
Slide 1: AJ Lucas Group – ABN AMRO Morgans Annual Queensland Conference
For personal use only AJ Lucas Group ABN AMRO Morgans Annual Queensland Conference 13th September 2007
Slide 2: Overview
Overview For personal use only Specialist infrastructure / resources service provider Sector focus: Oil & Gas Water & Waste Water Resources Real Estate Balanced business focusing on; Maintainability of earnings High margins High degree of technical input and expertise Working for principals – govern
Slide 3: Lucas Philosophy
Lucas Philosophy For personal use only Best of best - Safety, Environment and Industrial Relations Premium service provider and quality of work performed Lucas culture of continuous improvement Problem solving through non-confrontational approach Innovation – creative approach to scope of works
Slide 4: Strategy
Strategy For personal use only Market leadership in chosen sectors Niche businesses Differentiate through innovation Integrated business – shared overhead platform Leverage off intellectual capital: To provide integrated service and “capture” clients Generate entrepreneurial opportunities High Barri
Slide 5: Strategy
Strategy For personal use only Leverage off key activities, position in market place and high degree of in-house expertise/technical knowledge to create: Business generating high cash flows Relatively low overhead structure Solid and maintainable earnings stream Additional “equity” type, development
Slide 6: Activities
Activities For personal use only Drilling: Underground (UIS) Vertical Surface to in-seam (SIS) Horizontal directional drilling (HDD) Well Services Pipelines: Cross country and urban Water, wastewater, oil & gas, fuel, slurry Including • EPC • D&C • Hydrostatic testing • Compressor stations Construct
Slide 7: Drilling
Drilling For personal use only Sector focus: CSG, Coal and Civil Instrumental in commercialisation of Australia’s CSG industry and the largest coal seam degasification company in Australia Lucas, with McDermott and Capricorn Weston, provides solid foundation and critical mass Market leader in CSG an
Slide 8: Drilling
Drilling For personal use only Market Activity Rigs Staff Share Sector UIS - underground exploration & gas 8 31 50-60% Coal extraction. Vertical - exploration, development, gas 37 151 25-30% Coal production drilling. CSG SIS - coal seam degasification from the 3 37 30-40% Coal surface. CSG HDD - tre
Slide 9: Drilling Outlook – Rig Fleet by Activity
Drilling Outlook For personal use only Rig Fleet by Activity 60 50 40 Underground Vertical 30 SIS HDD (Civil) 20 10 0 FY2005 FY2006 FY2007 FY2008 FY2009 * Excludes China
Slide 10: Drilling Outlook – Rig Fleet by Sector
Drilling Outlook For personal use only Rig Fleet by Sector 60 50 40 Geotech Civil 30 Coal Seam Gas Coal 20 10 0 FY2005 FY2006 FY2007 FY2008 FY2009
Slide 11: Drilling Outlook
Drilling Outlook For personal use only Mining Services sector remaining strong, large demand for drilling services Reduced CSG cost of production, encourages switch to gas fired power stations (QLD >40%, NSW = nil) Increase in negotiated contracts (1-3 yrs) CSG in its infancy, about 75% of Qld’s 5,0
Slide 12: Pipelines
Pipelines For personal use only Core AJL business > 25 years. Strong customer relationships Design and engineering, procurement and construction to testing and commissioning Experienced market leader; Oil and gas Water and wastewater Fuel and slurry Cross country and urban Reputation of delivery on
Slide 13: Past Pipeline Projects Carried Out in Australia
Cooper Basin Pipeline for Century Slurry PAST PASTPIPELINE PIPELINEPROJECTS PROJECTS Santos – 234km of 150mm Pipeline HDD of 7 Surat Basin Pipelines for and 100mm dia crossings and CARRIED CARRIED OUTIN OUT IN Hydrotesting Hartogen & Bridge Oil 137km of 150mm, 100mm AUSTRALIA AUSTRALIA dia For perso
Slide 14: Pipeline Outlook
Pipeline Outlook For personal use only Oil & gas – increased domestic and export demand Water and wastewater – national water shortage, all states Years of under-investment Drought Urban areas population growth increase by 8.5m by 2050 Water loss and leakage management, critical government issues Tr
Slide 15: Construction & Civil
Construction & Civil For personal use only Sydney orientated, well established – Australia’s oldest builder Focus on commercial and industrial construction Projects which require high degree of knowledge and experience Specialist expertise in major refurbishment, in particular, heritage buildings Sp
Slide 16: Construction & Civil Outlook
Construction & Civil Outlook For personal use only Strategy not to grow this business. Market leadership to continue but utilise for growth of Group business. Strategy to develop facilities management business Project management training programme initiated Selected developments/risk sharing opportu
Slide 17: Operations & Maintenance
Operations & Maintenance For personal use only Knowledge and understanding of the assets Leverage engineering expertise into sustainable services businesses in each of our sectors Turnkey build and operate packages Government owned water infrastructure, advancing outsourcing (75% of D&C, 30% of O&M)
Slide 18: High Quality Clients
High Quality Clients For personal use only Market Civil Segment Oil & Gas Water & Waste Water Coal CSG Construction Clients • APA Group • Coordinator General. QLD • BMA-BHP Billiton • Arrow Energy • Hyundai Mitsubishi Alliance • Santos • Sydney Water • AGL • Sydney City • Anglo Council • Epic Energy
Slide 19: Key issues/limits to growth
Key issues/limits to growth For personal use only Capacity constraints – lead time to procure additional equipment Skilled personnel and resources – availability and retention Cost pressures Working capital Balance sheet
Slide 20: Lucas Energy
Lucas Energy For personal use only Gloucester Basin (AJL 70% / MPO 30%) Dedicated management and exploration team established Drilling programme accelerated Land acquisition programme commenced Expenditure commitments being funded out of Group cash flow First reserves certification due early calenda
Slide 21: Summary - Outlook
Summary - Outlook For personal use only A$m FY2007 A FY2008 F Drilling 67.6 96.0 Pipelines 73.2 166.0 Construction and Civil 75.5 88.0 Total Revenue 216.3 350.0 EBITDA 15.4* 30.5 EBITDA % 7.1% 8.7% NPAT 6.4 14.6 * EBITDA Net FY2007 excludes $0.5m for P&E write-down
Slide 22: Summary - Balance by Activity
Summary - Balance by Activity For personal use only Revenue 30 June 2007 Revenue Budget 2008 Construction, 29% Construction, 34% Pipelines, 35% Pipelines, 45% Drilling Services, Drilling Services, 31% 26% Revenue Target Operations & Maintenance, 13% Pipelines, 42% Construction, 19% Drilling Services
Slide 23: Thank You
Thank You For personal use only ABN AMRO Morgan & attendants To the dedicated hard working staff at Lucas and their love of innovation and engineering excellence Contact Details; Allan Campbell CEO Phone: +61 2 9809 6866 Lucas Group Fax: +61 2 9807 6088 PO Box 675 Mobile: +61 413 616 616 RYDE NSW Em
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