Aj Lucas Group Limited · ASX:AJL
Aj Lucas — H1 FY2008 Earnings Presentation
18 slides from Aj Lucas's earnings presentation, Feb 22, 2008
Slide 1: Results Presentation Half Year ended 31 Dec 2007
For personal use only AJ LUCAS GROUP LIMITED RESULTS PRESENTATION Half Year ended 31 Dec 2007
Slide 2: Presentation Outline
Presentation Outline For personal use only AJ LUCAS GROUP LIMITED Highlights Key Objectives Group Financial Performance Business Unit Performance Coal Seam Gas Assets Cash flow Strategy Outlook 2
Slide 3: Highlights
Highlights For personal use only AJ LUCAS GROUP LIMITED • Record financial performance – Revenue increased by 141% to $205.3m – Profit before tax increased by 571% to $11.0m – EBITDA increased by 200% to $18.8m (FY07 Full Year $14.9m) – EPS increased by 557% to 15.1 cents • Strong performance from a
Slide 4: Key Objectives
Key Objectives For personal use only AJ LUCAS GROUP LIMITED • Occupational health and safety – Excellent safety and industrial relations record – Big effort across group, including subcontractors – Upscaled systems • Environmental issues - none • Additional trenchless and infrastructure installation
Slide 5: Group Financial Performance
Group Financial Performance For personal use only AJ LUCAS GROUP LIMITED Change 2007 2006 % • Strong earnings growth Revenue $205.3m $85.0m 141 • Significant investment in plant EBITDA $18.8m $6.3m 200 and equipment EBIT $13.3m $2.1m 541 • Record order book Net profit after tax $8.2m $1.2m 568 • Str
Slide 6: Strong Growth
Strong Growth For personal use only AJ LUCAS GROUP LIMITED Operating Revenue $m Underlying Underlying EBITDA $m EBITDA Margin 217.3 22.1 8.4 205.3 18.3 6.2 10.8 171.3 10.6 (9.0) 2005 2006 2007 2008 74.2 (6.7) 2005 2006 2007 2008 2005 2006 2007 2008 H1 H2 6
Slide 7: Analysis of Profit Growth
Analysis of Profit Growth For personal use only AJ LUCAS GROUP LIMITED 25 Organic Growth $11.5m 20 0.9 (1.8) 2.6 (3.2) 15 4.8 (0.6) 11.0 $m 10 6.7 5 1.6 0 P B T Dec 06 Gro wth in Sales M argin Gro wth CWD A cq S G&A Interest Legal fees Intangible P B T Dec 07 expenses amortisation -5 7
Slide 8: Pipeline Division
Pipeline Division For personal use only AJ LUCAS GROUP LIMITED Change 2007 2006 % Revenue $95.3m $19.3m 394 EBITDA $7.6m $0.5m Impairments - $1.8m Underlying EBITDA $7.6m $2.3m 230 Underlying EBITDA margin 8.0% 11.8% 8
Slide 9: Pipeline Division
Pipeline Division For personal use only AJ LUCAS GROUP LIMITED • Full service EPC, design and construct, construction service offered • Emphasis on engineering and knowledge of the work • Division expanding rapidly – more staff (+ 124 people) and more specialist equipment (+$3.5m) • Outlook very bri
Slide 10: Drilling Division
Drilling Division For personal use only AJ LUCAS GROUP LIMITED Change 2007 2006 % Revenue $58.2m $29.7m 96 EBITDA $11.5m $8.5m Non recurring/ non operational items $3.0m ($3.8m) 212 Underlying EBITDA $14.5m $4.7m Underlying EBITDA margin 24.9% 15.7% 10
Slide 11: Drilling Division
Drilling Division For personal use only AJ LUCAS GROUP LIMITED • Largest drilling services provider to coal and coal seam gas sectors in Australia (56 rigs) • Well balanced equipment portfolio – Underground – Vertical – SIS – Trenchless technology • Significant focus on technology and work practices
Slide 12: Construction Division
Construction Division For personal use only AJ LUCAS GROUP LIMITED Change 2007 2006 % Revenue $51.8m $36.1m 43 EBITDA $1.6m $0.1m Non-operational items $0.2m $1.0m Underlying EBITDA $1.8m $1.1m 67 Underlying EBITDA margin 3.5% 3.0% 12
Slide 13: Construction Division
Construction Division For personal use only AJ LUCAS GROUP LIMITED • Repositioning of business well advanced – focus on performance and client relationships - “builder of choice” • Strong cash flow and project management training ground • Construction and project management skills combine with engin
Slide 14: Coal Seam Gas Assets
Coal Seam Gas Assets For personal use only AJ LUCAS GROUP LIMITED Gloucester Basin • Phase II work programme accelerated. Very encouraging results thus far. Reserves certification due by end February 2008 • Land acquisition programme and commercialisation negotiations commenced • Expenditure commitm
Slide 15: Cash Flow
Cash Flow For personal use only AJ LUCAS GROUP LIMITED • Exploration and development expenditure Sources Applications funded out of operating 6.4 Operating cash flow 24.2 Exploration & development cash flow expenditure Net borrowings 10.4 • Acquisition finance self financing through secure Plant & e
Slide 16: Sydney Gas Investment
Sydney Gas Investment For personal use only AJ LUCAS GROUP LIMITED • Strategic investment (15.35%). Options over further 10% subject to milestones • Andy Lukas CEO • 3 year Technical Services and 2 year Drilling Services Agreements – Accelerate exploration and development of Sydney Basin – Strengthe
Slide 17: Phase IV Growth Strategy
Phase IV Growth Strategy For personal use only AJ LUCAS GROUP LIMITED • Upscale systems and procedures. Greater emphasis on: – Management of risk – Training – Succession planning – OHS&E • Greater emphasis on marketing and business development • Balance/mix of activities – Grow pipeline and drilling
Slide 18: Outlook
Outlook For personal use only AJ LUCAS GROUP LIMITED • Strong order book of $472 million • Revenue guidance (FY2008): $430 - $450 million • Increased demand for pipeline and drilling work • 2nd half will be impacted by current wet weather in Queensland • Margins to be maintained (or improved) • Bala