contractors busy again

PURE SPECULATION: Robin Bromby | August 17, 2009
Article from: The Australian.

Contractors busy again.

IN a Diggers & Dealers debriefing note to clients, ABN Amro Morgans said the message from the mining services companies was that the worst was behind them, but that it still remained one of the toughest businesses around with increased competition. It was capital intensive and had low profit margins. But two companies stood out to the ABN Amro boys. These were Sedgman (SDM), on which they have a "buy", and Swick Mining (SWK), which they don't cover.

During the week, Sedgman said it was opening an office in Johannesburg. The contractor has been working on two coal projects in Mozambique and expects to pick up more business in Southern Africa.

But Hartleys does cover Swick and they have a "buy" on the stock. Swick has just secured another drilling contract in Alaska and, with 43 rigs at work in Australia, the contractor is back to its 2008 peak here.

The Australian implies no investment recommendation and this report contains material that is speculative in nature. Investors should seek professional investment advice.