Business Summary Decmil Group Limited (DCG) is a design, civil engineering and construction, accommodation services, manufacturing and maintenance company. DCG is focused on delivering integrated solutions to clients in the Australian oil and gas, mining and infrastructure sectors. DCG has three main business sectors being: Construction and Engineering works, Accommodation, and Renewable Energy. Construction and Engineering works: This business division involves the large and small scale concrete civil works on brown and greenfield projects in regional and remote areas; large scale implementation of industrial infrastructure, including industrial buildings, processing plants, workshops and storage facilities; app aspects of project development from design, site preparation and excavation to bulk earthworks, civil works and construction; government structure projects including office buildings, administration buildings and storage facilities; and the manufacture and installation of high pressure piping and tanking. The division operates through the company's wholly owned subsidiary being Decmil Australia Pty Ltd and Eastcoast Development Engineering Pty Ltd. Accommodation: This business division is involve in the design and constrict of permanent and temporary accommodation, including villages in remote areas; and the build, own and operate accommodation villages in remote areas. The division operates through the company's wholly owned subsidiary, Homeground Villages Pty Ltd. Renewable Energy: This division looks into civil works for remote wind and solar projects including site preparation, foundations and pilings. They also provide Structural and mechanical installations including towers for wind farms and framing systems and PV modules for solar projects; and Specialist electrical work for energy storage and distribution. Latest Research Balance sheet under focus Downgrade to Neutral/High Risk — Decmil’s share price has been negatively impacted by issues with two of its largest contracts, Sunraysia Solar Farm (~$280 million contract) and NZ Department of Corrections Modular Prisons (~$120 million). While Decmil’s management is optimistic that contract issues could be resolved over the next few months, we downgrade to Neutral/High Risk given i) we see potential that the resolution of the contracts could take longer than expected; and ii) resignation of long standing CFO. For more information see research 9 Jan 2020. GICS - Capital Goods Decmil Group Limited ASX Code: DCG Price: $0.375 12 Mth Target Price: $0.63 Rating: Neutral - High Important Disclaimer - This may affect your legal rights: Because this document has been prepared without consideration of any specific client's financial situation, particular needs and investment objectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement with Bell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell Potter Securities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate. Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document. This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. This is general investment advice only and does not constitute advice to any person. Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in this commission. Bell Potter Securities and its associates may hold shares in the companies recommended. Snapshot Date Market Cap. Shares on issue 12 Month High 12 Month Low 11 February 2020 $90m 239.3m $1.00 $0.36 Rating Rating 12 Mth Target Price Capital Gain Gross Yield Implied Total Return Neutral - High Risk $0.63 63.6% 14.8% 78.5% Investment Fundamentals FYE 30 Jun 2019A 2020F 2021F 2022F Profit $m 14.0 18.0 21.0 17.0 Profit (norm)* $m 14.0 18.0 21.0 17.0 EPS* ¢ 6.0 8.0 9.0 7.0 EPS Growth % 0.0 33.3 12.5 -22.2 P/E* x 6.4 4.8 4.3 5.5 P/E Relative % 0.0 0.0 0.0 0.0 DPS ¢ 3.0 0.0 4.0 3.0 Yield % 7.8 0.0 10.4 7.8 Franking % 0.0 0.0 100.0 100.0 * Adjusted for goodwill and unusual items Source: Based on Citi estimates Share Price Chart Total Return on $10,000 Investment
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Decmil Group Limited ASX Code: DCG Price: $0.375 …...Decmil Group Limited ASX Code: DCG Price: $0.375 12 Mth Target Price: $0.63 Rating: Neutral - High Important Disclaimer -This
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Business SummaryDecmil Group Limited (DCG) is a design, civil engineering and construction,accommodation services, manufacturing and maintenance company. DCG isfocused on delivering integrated solutions to clients in the Australian oil andgas, mining and infrastructure sectors. DCG has three main business sectorsbeing: Construction and Engineering works, Accommodation, and RenewableEnergy.
Construction and Engineering works: This business division involves thelarge and small scale concrete civil works on brown and greenfield projects inregional and remote areas; large scale implementation of industrialinfrastructure, including industrial buildings, processing plants, workshopsand storage facilities; app aspects of project development from design, sitepreparation and excavation to bulk earthworks, civil works and construction;government structure projects including office buildings, administrationbuildings and storage facilities; and the manufacture and installation of highpressure piping and tanking. The division operates through the company'swholly owned subsidiary being Decmil Australia Pty Ltd and EastcoastDevelopment Engineering Pty Ltd.
Accommodation: This business division is involve in the design andconstrict of permanent and temporary accommodation, including villages inremote areas; and the build, own and operate accommodation villages inremote areas. The division operates through the company's wholly ownedsubsidiary, Homeground Villages Pty Ltd.
Renewable Energy: This division looks into civil works for remote wind andsolar projects including site preparation, foundations and pilings. They alsoprovide Structural and mechanical installations including towers for windfarms and framing systems and PV modules for solar projects; and Specialistelectrical work for energy storage and distribution.
Latest ResearchBalance sheet under focus
Downgrade to Neutral/High Risk — Decmil’s share price has beennegatively impacted by issues with two of its largest contracts, SunraysiaSolar Farm (~$280 million contract) and NZ Department of CorrectionsModular Prisons (~$120 million). While Decmil’s management is optimisticthat contract issues could be resolved over
the next few months, we downgrade to Neutral/High Risk given i) we seepotential that the resolution of the contracts could take longer thanexpected; and ii) resignation of long standing CFO.
Important Disclaimer - This may affect your legal rights: Because this document has been prepared without consideration of any specific client's financial situation, particular needs and investmentobjectives, a Bell Potter Securities Limited investment adviser (or the financial services licensee, or the proper authority of such licensee, who has provided you with this report by arrangement withBell Potter Securities Limited) should be consulted before any investment decision is made. While this document is based on the information from sources which are considered reliable, Bell PotterSecurities Limited, its directors, employees and consultants do not represent, warrant or guarantee, expressly or impliedly, that the information contained in this document is complete or accurate.Nor does Bell Potter Securities Limited accept any responsibility to inform you of any matter that subsequently comes to its notice, which may affect any of the information contained in this document.This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Bell Potter Securities Limited. This is generalinvestment advice only and does not constitute advice to any person.Disclosure of Interest: Bell Potter Securities Limited receives commission from dealing in securities and its authorised representatives, or introducers of business, may directly share in thiscommission. Bell Potter Securities and its associates may hold shares in the companies recommended.
Snapshot
DateMarket Cap.Shares on issue12 Month High12 Month Low
11 February 2020$90m239.3m$1.00$0.36
RatingRating12 Mth Target Price
Capital GainGross Yield
Implied Total Return
Neutral - High Risk$0.6363.6%14.8%78.5%
Investment FundamentalsFYE 30 Jun 2019A 2020F 2021F 2022F
Top 5 Substantial ShareholdersThorney Opportunities Ltd 11.7%TIGA Trading Pty Ltd 11.7%Denis Criddle 11.6%Thorney Investments Group 10.9%Commonwealth Bank Group 8.6%
* Source: Morningstar. This chart shows the spread of recommendations from thosebroker analyst's in Australia with research coverage of this stock.
Principals & DirectorsPrincipals
Company Secretary Ms Alison Thompson
Directors
Mr Donald James Argent(Non-Executive Director)Mr William (Bill) Healy(Non-Executive Director)Mr David Saxelby(Non-Executive Director,Non-Executive Chairman)Mr Scott Criddle(Chief Executive Officer,Managing Director)Mr Andries (Dickie) Dique(Non-Executive Director)
To access further Research or for information regarding our recommendations and ratings please seewww.bellpotter.com.au