Aj Lucas Group Limited · ASX:AJL
Aj Lucas — H1 2007 Earnings Presentation
12 slides from Aj Lucas's earnings presentation, Mar 7, 2007
Slide 1: AJ Lucas Group Limited Results Presentation
AJ LUCAS GROUP LIMITED RESULTS PRESENTATION Half-year ended 31 December 2006
Slide 2: Presentation Outline
Presentation Outline Highlights OQ Group Financial Performance Q) Business Unit Performance QO) Issues QO CSM Assets OQ) Balance Sheet/Capital Requirements Q) Strategy Q) Outlook
Slide 3: Highlights
Highlights Profit disappointing. EBITDA performance as expected — SIS & FM under performed EBITDA increased by 24% to $6.8m Strong operating contribution from McDermott Drilling and Underground Drilling Results impacted by project delays ($35m revenue; $4.4m margin) Record order book of $250m Glouce
Slide 4: Group Financial Performance
Facilities management goodwill ($1.0m) and Pipeline Rights ($1.8m) written off Net profit of $3.1m recognised from acquisition of McDermott Drilling Delays in the commencement of projects impacted on revenue ($35m) and margin ($4.4m): will be recovered in second half Plant under-recovery of $2.5m (2
Slide 5: Divisional report — Pipelines and HDD
Goro Project slowed by local conditions and previous unrest + Conservative approach to profit recognition on Goro Project *« HDD performed well but plant under-recovery + Planning complete on Western Corridor project; construction to commence shortly + PSP Alliance Contract with Dec 2006 Divisional
Slide 6: Divisional report — Drilling Services
Underground sis Vertical Wellhead Divisional report — McDermott Drilling acquired in July 2007 ~ Operating profit of $1.9m ~ Net profit of $3.1 million recognised from acquisition + Underground drilling ~- Operating profit of $1.3m + SIS drilling ~ Operating loss of $0.5m Drilling Services Dec 2006
Slide 7: Divisional report — Construction and Civil
Delays in project commencement (Ivy and Hyundai) Facilities Management continues to under-perform * — Strong order book with focus on negotiated work * — Margin reduction because of business mix Divisional report — Construction and Civil Dec 2006 Dec 2005 Revenue : : $364 $42.6m “SEBIT So $1.5m Marg
Slide 8: Issues
Issues Pressure on costs * Availability of skilled personnel — all levels + Recovery of plant investment in SIS and HDD + Increased competition; new entrants in market
Slide 9: CSM Assets
CSM Assets Recruited new management team, based in Melbourne * Gloucester Basin Phase Il development plan agreed — Expenditure of $13m - $15m over 18 months planned — 12 core wells, 3 production pilots, aeromagnetic programme and seismic reprocessing + Gloucester Basin, although prospective, must be
Slide 10: Balance Sheet/Capital Requirements
Balance Sheet/Capital Requirements Strong operating cash flow but working capital requirements increasing Gloucester Basin development programme accelerated * Additional plant required for pipeline activity * Convertible notes ($10million) mature in December 2007 (conversion price at least $2.00 per
Slide 11: Strategy
Strategy Balanced business mix — on track FM/O&M business needs a lot of senior executive time Risk mitigation through project alliances and partnerships eg. Water). Corridor with Transfield, Cascades with PSP (Sydney ater Diversify activities into Asia with local partners, commence activities in Ch
Slide 12: Outlook
Outlook Order book of $250 million — Projects commenced: — Western Corridor (Pipeline) $85 million — Cascades (HDD) $20 million — lvy (Construction) $68 million — Hyundai (Construction) $45 million — Drilling (Vertical and underground) $21 million — Slipways (Civil) $24 million High demand for pipel