can anyone comment on this , page-3

I wouldn't go for it myself. What they're doing here is a fairly common practice in floating that i don't like: small company (GSC) makes a large acquisition (CASC), then to pay for that acquisition, floats itself in an IPO. Companies like this are really asking you and me (the public) to pay for something we don't know about - e.g. it's only been 3 months since GCS bought CASC, so how do you know what you're really buying into?

I only breezed through the prospectus of GCS, so i can't say too much, but here's just a few general comments as to why i wouldn't buy in myself:

- Growth by acquisition: Companies like GCS that grow by acquisition are great when the going is good and will usually outperform companies focused on organic growth in boom times, but things go pear-shaped when the going gets tough. The thing that attracts me to PCG is that it's achieved all that it has through organic growth whilst maintaining low gearing - this proves the underlying quality of the business and management, and it's a strategy that keeps the company strong even if/when things go down.

- Concentration in both contracts and geography: GCS seems to be getting almost all of its revenue in the Perth market, which has been running white hot for the past couple years. Compare this to PCG, which has operations all over the place. I know which one i'd prefer. And a major problem with GCS' acquisition of CASC is that CASC is deriving 100% of its revenues from 2 projects, both of which are with Mulitplex (who are struggling big time).
That is a big risk - if either one of those projects strike trouble, CASC, and therefore GCS as the entire company will suffer. And from the sounds of things, CASC is carrying pretty much all of the contracting risk in these 2 projects. If Multiplex got bought out (which is a real possibility), and the new owners are looking to squeeze building costs to improve Multiplex's returns, the first place they'll look is to the little guys like CASC. It doesn't strike me as a particularly brilliant idea for CASC to have entered into fixed price contracts at a time when cost pressures for contractors in WA are soaring. To the best of my knowledge, PCG normally at least keep some scope in their contracts to pass cost increases onto the customer (which is why PCG don't normally attach a dollar value in their announcement of contract wins), which is very important when you get cost blow-outs.

- Margins: GCS is achieving juicy EBITDA margins of about 33% at the moment, which is very high, whereas in 2H'07 PCG got an EBITDA margin of about 25%. The problem for GCS is that they're predicting their EBITDA margins to reduce going forward, whereas PCG's will almost certainly increase. As a small company, you're more liable to have your margins squeezed (particularly when you carry all the contract risk in a market where cost pressures are immense). PCG, on the other hand, operates in parts of the world where cost pressures aren't as great (i.e. in the Middle East, they ship in Indians and Pakistanis on low wages to do the work, which helps contain cost pressures).

Anyway, hope that was helpful. GCS is priced attractively at only 8x FY2008 NPAT....... but PCG could easily make $18M NPAT next year, which would have them on a 10x FY2008 NPAT at the moment. And when you line it up like that, it's obvious which business i'd prefer to be in.

Cheers.