Monadelphous Group Limited (MND)
Views and News
The Creme de la Creme of Resource & Infrastructure Engineers
Monadelphous works for the majors in resource and infrastructure EPCM projects, typically called in where the top priorities are safe and timely delivery to specification.
Thus MND is appointed by BHP, RIO and other blue chip clients, again and again. To keep this swan-like reputation of course one often needs to paddle furiously under the water, and the P/E rating and risk may be higher than some would prefer, but you generally pay for quality. With Australia not as immune as we would like from the European malaise, showing lack of productivity growth and suffering from a high exchange rate, any investment has its worries. But there is no doubt we are a two (some say three) speed economy and this is likely to continue. Monadelphous is very obviously in the top gear area.
The above was written in 2012, before MND gave at the half-year results clear warning of the slowdown of resource development work. MND confirmed that FY13 would continue with a strong, in fact a likely record H2, but that visibility thereafter was low and revenues were likely to reduce considerably with a direct impact on profits.
Recent News Highlights
As at 31/12/2012 : see details at www.monadelphous.com.au (new window? Shift+Click)
| 23/11/2012 Secures QCLNG Maintenance Contract |
| 20/11/2012 AGM and Updated Outlook |
| 09/11/2012 Secures Facilities Management Extension and (6 Nov) Major Coal Construction Contract |
| 31/10/2012 Secures Karratha Gas Plant Services Contract and (24 October) Contracts Update |
| 16/10/2012 Annual Report |
| 30/08/2012 Secures Contract at Jimblebar |
| 17/02/2012 Two milestone framework agreements with RIO (non-exclusive): as preferred contractor on structural, mechanical & piping, and on electrical & instrumentation work on iron ore projects |
| 06/02/2012 Sells off 14% stake in Norfolk (NFK), for $24.4m; cost $8.2m, mainly February 2009 |
| 30/01/2012 $180m water transmission & pipeline contracts with RIO and Chevron-Gorgon |
| 24/01/2012 Market Update |
| 23/12/2011 Awarded Iron Ore Construction Contract |
| 22/12/2011 Muhibbah Marine JV Awarded $330M WICET Contract |
| 16/12/2011 Awarded $70 million Wheatstone Contract |
| 22/11/2011 2011 AGM Chairman and MD`s Address & Presentation |
| 18/11/2011 Monadelphous Contracts Update |
Half-yearly Performance & Estimates - MND
| Year-end June | FY11A | 1H12A | FY12A | 1H13A | FY13A | FY14E | FY15E |
|---|---|---|---|---|---|---|---|
| Sales, $m | 1,444 | 879.5 | 1,898 | 1,289 | 2,614 | 2,280 | 2,254 |
| EBITDA, $m | 153.4 | 89.7 | 196.5 | 125.3 | 247.1 | 207.6 | 206.7 |
| EBIT, $m | 128.9 | 76.9 | 167.8 | 110.2 | 217.2 | 178.0 | 180.3 |
| Report NPAT, $m | 95.1 | 57.6 | 126.0 | 79.1 | 156.4 | ||
| Adj. NPAT, $m | 156.4 | 129.1 | 129.0 | ||||
| Reported EPS, ¢ | 107.00 | 64.00 | 142.00 | 87.00 | 171.00 | ||
| Adjusted EPS, ¢ | 171.00 | 138.55 | 138.30 | ||||
| EPS %FY/Growth | 45% | 33% | 51% | 20% | -19% | 0% | |
| Dividend, ¢ | 95.0 | 50.0 | 125.0 | 62.0 | 137.0 | 116.00 | 117.50 |
| Franking, % | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| EBITDA Margin | 11% | 0 | 10% | 10% | 9% | 9.1% | 9.2% |
| NPAT Margin | 7% | 0 | 7% | 6% | 6% | 5.7% | 5.7% |
| ROE, % | 49% | 0 | 51% | 28 | 51% | ||
| EBIT/Interest | -48.0 | 0.0 | -51.3 | -6,481 | 371.22 | ||
| Net Debt / Equity | -0.67 | 0 | -0.62 | -0.45 | -0.46 | ||
| CashFlow/Sh, ¢ | 143.2 | 77.2 | 156.7 | 48.6 | 125.3 | 175.6 | 180.5 |
| Y/E Shares, m | 87.6 | 88.7 | 88.7 | 90.7 | 91.0 |
| 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 - MND
| Year-end June | 1H11A | FY11A | 1H12A | FY12A | 1H13A | FY13E | FY14E |
|---|---|---|---|---|---|---|---|
| Sales, $m | 700.2 | 1,444 | 879.5 | 1,898 | 1,289 | 2,570 | 2,627 |
| EBITDA, $m | 73.6 | 153.4 | 89.7 | 196.5 | 125.3 | 252.7 | 259.3 |
| EBIT, $m | 63.0 | 128.9 | 76.9 | 167.8 | 110.2 | 221.6 | 224.4 |
| Report NPAT, $m | 45.6 | 95.1 | 57.6 | 126.0 | 79.1 | ||
| Adj. NPAT, $m | 57.5 | 159.1 | 163.0 | ||||
| Reported EPS, ¢ | 51.00 | 107.00 | 64.00 | 142.00 | 87.00 | ||
| Adjusted EPS, ¢ | 64.30 | 175.30 | 180.40 | ||||
| EPS %FY/Growth | 48% | 45% | 33% | 0% | 23% | 3% | |
| Dividend, ¢ | 40.0 | 95.0 | 50.0 | 125.0 | 62.0 | 147.00 | 150.00 |
| Franking, % | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| EBITDA Margin | 10% | 11% | 0 | 10% | 10% | 9.8% | 9.9% |
| NPAT Margin | 7% | 7% | 0 | 7% | 6% | 6.2% | 6.2% |
| ROE, % | 58% | 49% | 0 | 51% | 28% | ||
| EBIT/Interest | -44.9 | -48.0 | 0.0 | -51.3 | -6,481 | ||
| Net Debt / Equity | -0.81 | -0.67 | 0 | -0.62 | -0.45 | ||
| CashFlow/Sh, ¢ | 70.7 | 143.2 | 77.2 | 156.7 | 48.6 | 193.0 | 213.8 |
| Y/E Shares, m | 87.6 | 87.6 | 88.7 | 88.7 | 90.7 |
| 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 - MND
| Year-end June | FY10A | 1H11A | FY11A | 1H12A | FY12A | FY13E | FY14E |
|---|---|---|---|---|---|---|---|
| Sales, $m | 1,275 | 700.2 | 1,444 | 879.5 | 1,898 | 2,169 | 2,451 |
| EBITDA, $m | 129.5 | 73.6 | 153.4 | 89.7 | 196.5 | 229.4 | 253.1 |
| EBIT, $m | 112.7 | 63.0 | 128.9 | 76.9 | 167.8 | 196.2 | 217.8 |
| Report NPAT, $m | 83.3 | 45.6 | 95.1 | 57.6 | 126.0 | ||
| Adj. NPAT, $m | 126.0 | 144.5 | 158.2 | ||||
| Reported EPS, ¢ | 95.00 | 51.00 | 107.00 | 64.00 | 142.00 | ||
| Adjusted EPS, ¢ | 142.00 | 160.90 | 176.60 | ||||
| EPS %FY/Growth | 48% | 13% | 45% | 33% | 13% | 10% | |
| Dividend, ¢ | 83.0 | 40.0 | 95.0 | 50.0 | 125.0 | 139.00 | 155.00 |
| Franking, % | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
| EBITDA Margin | 10% | 10% | 11% | 10.2% | 10% | 10.6% | 10.3% |
| NPAT Margin | 7% | 7% | 7% | 6.5% | 7% | 6.7% | 6.5% |
| ROE, % | 58% | 58% | 49% | 51% | |||
| EBIT/Interest | -44.9 | -44.9 | -48.0 | 0.00 | -51.29 | ||
| Net Debt / Equity | -0.81 | -0.81 | -0.67 | 0 | -0.62 | ||
| CashFlow/Sh, ¢ | 111.6 | 70.7 | 143.2 | 77.2 | 156.7 | 197.2 | 220.7 |
| Y/E Shares, m | 86.1 | 87.6 | 87.6 | 88.7 | 88.7 |
| 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
See general background above.
Russell Research in the media
Stock Picks for Sunday Herald Sun – 2 June 2013
HOLD Monadelphous Group Limited, MND, $15.87
The price of this engineer to the resource majors has fallen by more than a third in 2013. Highly resilient, add for strong yield and longer term recovery.
In a note written for TheBull.com.au on 17 October 2011 we said:
High Sustainable Dividend Yields, Low Debt, Solid Growth
Monadelphous Limited (MND, $18.92 on Friday 14 Oct)
Monadelphous is a leader in building and maintaining projects for world class operators across mineral resources (notably iron ore), oil and gas and infrastructure. This ASX-200 Index stock has an envied reputation in the continuing themes of Australia’s growth. Its leadership team has produced a decade of year-on-year records despite the GFC. In the year ended June 2011, revenue rose 13.2% to $1,440 million, EBITDA 14.5% and net profit 14.2% to $95.1 million. EPS rose 12.4% to 108.8¢ and dividends 14.5% to 95¢. We expect annual EPS growth of over 12% for at least the next three years, giving a yield of 5.5% franked this year, rising towards 7%. This is underpinned by the asset-light balance sheet which had net cash of $130 million at 30 June.
Wave Chart
Profile
Monadelphous Group
Rating: ♥
Category: Best Stock ; Large
Action:
Website: www.monadelphous.com.au
| ASX code: | MND |
| Closing Price, 30/12/2013: | $ 18.400 |
| Market Capitalisation: | $ 1,688 million |
| 52 Week High: | $ 28.48 |
| 52 Week Low: | $ 14.63 |
| Sector: | Construction & Engineering |
| Index: | S&P/ASX 100 Index |
Summary of Fundamentals
| Year-end June | FY12A | FY13A | FY14E | FY15E |
|---|---|---|---|---|
| NPAT, $m | 126.0 | 156.4 | 130.0 | 126.8 |
| Reported EPS, ¢ | 142.00 | 171.00 | ||
| Adjusted EPS, ¢ | 170.60 | 141.25 | 136.40 | |
| EPS Growth, % | 33% | 20% | -17% | -3% |
| P/E Ratio, x | 12.96 | 10.79 | 13.03 | 13.49 |
| Dividend, ¢ | 125.0 | 137.0 | 116.60 | 117.00 |
| Franking, % | 100% | 100% | 100% | 100% |
| Div. Yield, % | 6.79 | 7.45 | 6.34 | 6.36 |
Notes
| Our Adjusted EPS is used for the last year and forward estimates and as basis for EPS Growth and P/E Ratio. We currently use Reported data for all historic NPAT, for the prior year EPS and as base for last year EPS growth. |
| Data & Chart sourced from IRESS Market Technology Ltd. |
One Year Chart
As at 30 December 2013
Other Highlights
| Sector: | Construction & Engineering |
| Return on Equity, FY13 : | 51% |
| Net Debt to Equity, FY13 : | -46 % |
| EBIT / Interest Cover, FY13 : | 371.22 x |
| Gicscode: | 20103010 |
| First Listed: | 28-Mar-91 |
Business Activities
Monadelphous Group Limited (MND) is leader in providing project management, construction, asset management and maintenance services to the resources, energy and infrastructure industries.
Glossary:
| ♠ | "A Core Stock" - reliable long-term yield & growth |
| ♥ | "We like it" - a seasoned performer, growth & yield |
| ♦ | "A tough scout" - creating a potential breakthrough |
| ♣ | "A steady performer" - giving reliable yield or growth |
| Best Stocks | Portfolio of selected attractive investments |
| Potential | Stocks that may have good improvement prospects |
| Speculative | More risky usually smaller stocks with spec. upside |
| Midcaps | In RR Midcap Index, $ 70m to 1,500m market cap. |
| Large Stocks | Larger Stocks upwards of $ 1,500m market cap |