A Growing Performer: an Equipment Supplier Geared to Resources Activity

Austin Engineering provides shovels for miners - a reliable way of making money in a mining boom and with stable long-term prospects. Its core business is in the mining and resources sector.

Its principal products and services include Westech dump truck bodies and others, the JEC mining product range, Excavator and loader buckets, Materials handling equipment, Large service vehicles and water tanks, and Tyre handlers.

Recent News Highlights

As at 31/12/2012 : see details at www.austineng.com.au   (new window? Shift+Click)

23/11/2012     AGM & Presentation

25/09/2012     Annual Report (23 Oct: Full Graphics Version)

23/08/2012     Full Year Results FY12 & Presentation

20/04/2012     Acquisition of Petroaceros S.A.C Business in Peru

21/02/2012     Half Year Results 1H12

06/01/2012     Confirmation of Acquisition of VyV Business in Calama, Chile

25/11/2011     AGM Presentation & Chairman's Address

22/11/2011     Expansion of Chilean Repair and Maintenance Services

14/11/2011     Award of Major Contract for Dump Truck Bodies in Chile

The acquisition of two mining services divisions of Petroaceros S.A.C in Peru enhances ANG's exposure to the rapidly expanding mining industry in Peru as well as the wider South American market. The operations have normalised EBITDA of A$1.5m and this should rise with the introduction of ANG's existing product range. The 'FRM' division, operating since 1984 from a plant in Lima, makes and repairs its own dump truck body and bucket range. The site maintenance division has two contracts, to be renegotiated in 2013, for equipment maintenance at the Yanaconcha and Antamina mine sites in Peru. Net assets and properties to be acquired total US$1.44m. There are 219 employees and the purchase price of US$5.69m was paid from cash resources at completion on 20 April 2012.

Pursuing ANG's plan to become a major supplier of mining products and services throughout South America, the purchase will give substantial increases in market share and growth in Peru. It will also allow ANG to undertake the maintenance aspect of its large contract with Xstrata in Peru awarded in 2011. Combined with the completion of the Chilean La Negra facility last year and the new Columbian facility in April 2012 it places ANG in a dominant position in South America.

The 1H12 result showed growth in all key measures over 1H11. Revenue rose 38% to $125.3m, EBITDA 17% to $19.9m, NPAT 9.9% to $11.7m and EPS 7% to 16.2¢. Business conditions were expected to remain favourable, weighted towards the second half. Thus on 21 February ANG raised its FY12 EBITDA target from the $40-45m given at the November 2011 AGM to $45-50m, up 26-40% on FY11.

Half-yearly Performance & Estimates - ANG

Year-end June	FY11A	1H12A	FY12A	1H13A	FY13A	FY14E	FY15E
Sales, $m	203.0	125.2	289.5	156.4	288.1	286.0	311.0
EBITDA, $m	35.8	19.9	50.2	30.1	51.2	48.7	52.6
EBIT, $m	31.6	17.2	43.8	25.3	42.2	39.4	43.0
Report NPAT, $m	21.5	11.7	29.6	17.3	28.5
Adj. NPAT, $m					28.5	27.2	30.5
Reported EPS, ¢	29.00	16.00	40.00	23.00	39.00
Adjusted EPS, ¢					39.00	37.20	41.70
EPS %FY/Growth		40%	38%	59%	-3%	-5%	12%
Dividend, ¢	11.5	3.5	14.0	4.5	15.0	14.50	15.25
Franking, %	100%	100%	100%	100%	100%	100%	100%
EBITDA Margin	18%	0	17%	19%	18%	17.0%	16.9%
NPAT Margin	11%	0	10%	11%	10%	9.5%	9.8%
ROE, %	21%	0	24%	13	19%
EBIT/Interest	25.0	0.0	17.5	18.93	16.42
Net Debt / Equity	0.13	0	-0.13	-0.14	-0.04
CashFlow/Sh, ¢	62.0	-3.8	34.2	18.4	30.3	49.7	52.3
Y/E Shares, m	71.9	72.4	72.4	72.4	73.2

Notes

Data sourced from IRESS Market Technology Limited. EPS Growth compared with the pcp is shown in most columns, except 1H11A and 1H12A which show the first half % of full year EPS. In a handful of cases, unadjusted share splits may give strange changes in ratios.

Half-year Performance & Estimates - ANG

Year-end June	1H11A	FY11A	1H12A	FY12A	1H13A	FY13E	FY14E
Sales, $m	93.0	203.0	125.2	289.5	156.4	329.0	352.0
EBITDA, $m	17.0	35.8	19.9	50.2	30.1	59.1	64.9
EBIT, $m	15.3	31.6	17.2	43.8	25.3	51.1	55.6
Report NPAT, $m	10.7	21.5	11.7	29.6	17.3
Adj. NPAT, $m					17.3	33.6	36.9
Reported EPS, ¢	15.00	29.00	16.00	40.00	23.00
Adjusted EPS, ¢					23.00	46.20	51.00
EPS %FY/Growth	52%		40%	38%	44%	16%	10%
Dividend, ¢	3.0	11.5	3.5	14.0	4.5	16.50	18.50
Franking, %	100%	100%	100%	100%	100%	100%	100%
EBITDA Margin	20%	18%	0	17%	19%	18.0%	18.4%
NPAT Margin	13%	11%	0	10%	11%	10.2%	10.5%
ROE, %	22%	21%	0	24%	13%
EBIT/Interest	616.6	25.0	0.0	17.5	18.93
Net Debt / Equity	0.02	0.13	0	-0.13	-0.14
CashFlow/Sh, ¢	16.4	62.0	-3.8	34.2	18.4	44.5	63.4
Y/E Shares, m	71.7	71.9	72.4	72.4	72.4

Notes

EPS Growth compared with the pcp is shown in most columns, except 1H10A and 1H11A which show the first half % of full year EPS.

Half-yearly Performance & Estimates - ANG

Year-end June	FY10A	1H11A	FY11A	1H12A	FY12A	FY13E	FY14E
Sales, $m	143.4	93.0	203.0	125.2	289.5	306.0	326.0
EBITDA, $m	29.1	17.0	35.8	19.9	50.2	56.4	60.7
EBIT, $m	26.6	15.3	31.6	17.2	43.8	49.2	53.6
Report NPAT, $m	19.3	10.7	21.5	11.7	29.6
Adj. NPAT, $m					29.6	33.7	37.6
Reported EPS, ¢	27.00	15.00	29.00	16.00	40.00
Adjusted EPS, ¢					40.00	45.65	50.60
EPS %FY/Growth		52%	7%	40%	38%	14%	11%
Dividend, ¢	9.5	3.0	11.5	3.5	14.0	15.25	17.00
Franking, %	100%	100%	100%	100%	100%	100%	100%
EBITDA Margin	20%	20%	18%	14.9%	17%	18.4%	18.6%
NPAT Margin	13%	13%	11%	8.7%	10%	11.0%	11.5%
ROE, %	22%	22%	21%		24%
EBIT/Interest	616.6	616.6	25.0	0.00	17.45
Net Debt / Equity	0.02	0.02	0.13	0	-0.13
CashFlow/Sh, ¢	19.5	16.4	62.0	-3.8	34.2	52.9	62.4
Y/E Shares, m	69.4	71.7	71.9	72.4	72.4

Notes

Data sourced from IRESS Market Technology Limited. EPS Growth compared with the pcp is shown in most columns, except 1H11A and 1H12A which show the first half % of full year EPS. In a handful of cases, unadjusted share splits may give strange changes in ratios.

Company Overview

ANG has Australian manufacturing facilities in Brisbane, Perth, Mackay and Muswellbrook, overseas in the American state of Wyoming through its subsidiary Western Technology Services (Westech) and Austin Ingenieros Chile Ltda located in the northern mining region of Antofagasta. In addition, joint-venture operations in the Middle East and South America also provide manufacturing facilities in Oman and Brazil.

Russell Research in the media

Stock Picks for Sunday Herald Sun - 3 June 2012

BUY: Austin Engineering Limited, ANG, $4.35

On a roll, making dump truck bodies and other mining equipment with organic and acquisition growth in Australia and globally.

Stock Picks for The Bull.com.au -  6 February 2012

Buy: Austin Engineering , ANG

This supplier of “shovels to miners” is in a sweet spot for strong long-term demand. It supplies dump truck bodies, excavator and loader buckets and other mining equipment. Fast growing operations span Australia, North America and Chile, with joint ventures in Brazil and the Middle East.