buy from argonaut, page-2

Bell Potter put out an update the other day too, still neutral. Hopefully mcg is still banned so he cant abuse me again :/

The MRM first half result played out as expected from our perspective. The Dampier Supply base assets (which we consider the jewel in the crown for MRM) doubled their contribution to group EBITDA. At the same time the Vessels
business (70% of group earnings) EBITDA increased at a more modest rate of 11%. Importantly the vessels business took the decision to acquire 4 new vessels during the half at a cost of $71m. This resulted in the company reporting
an effective tax rate of just 1.6% as the company took advantage of the government investment allowance. Net debt levels increased materially during the period from $59.8m to $134.1m and gearing from 36% to 76% due to the
material vessels expenditure. We appreciate the fact that the company has acquired new vessels to support
specific contracts, but we also note managements comments that competition in this segment is increasing. Our market intelligence suggest there has been a material increase in the supply of new and used vessels in the South East Asian
region including Australia and that prices have fallen materially (the market has changed materially since the Global Financial Crisis). This suggests to us that
competition is increasing and given the raft of material offshore oil and gas developments in Australia, new tender opportunities relating to these projects
are likely to be aggressively bid. In these circumstances, we suggest a cautious approach to MRM is warranted.