Comsec $11.10 (Accumulate/out perform)Investment view Management...

Comsec $11.10 (Accumulate/out perform)

Investment view

Management expects that the mix of higher rail sales and the addition of the AmeriCast
business will initially blend down EBITDA margin. However BKN is confident that it can
continue to grow the margin from its new base.

BKN's focus on the bottom line delivered a solid 2H08 result. Management has proven its
ability to improve margins even when volumes are flat.

CommSec expects mining volume growth in iron ore and coal. Initially we see the benefits
of this flowing through to a strong order book for BKN's wagons in FY09 and then
ultimately we see the volumes benefiting the Mining and Power and Cement divisions.

CommSec’s recommendation has been downgraded to

ACCUMULATE/OUT PERFORM
from Buy/Out Perform on valuation grounds. Since CommSec upgraded its
recommendation on the 8 January 2008 to Buy/Out Perform, BKN’s share price has
appreciated 47.9 % and the market has fallen 18%. BKN is now trading within 10% of
CommSec’s valuation