ferret's stock to watch: cci holdings limited

(SWCHL) Ferret's Stock to Watch: CCI HOLDINGS LIMITED
RWE News
8:21:020 6/03/2006
KEY LOGISTICS COMPANY TO COAL INDUSTRY IN RECOVERY MODE

Sydney - Monday - March 6: (RWE Aust Business News)
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OVERVIEW
********

When a company gets into trouble, it receives little sympathy
from the market until things improve.
Even then regaining investor confidence is not an easy task.
Take CCI Holdings (CHL) for an example which turned a loss into
a profit in the last financial half year but the shares have hardly
budged.
The company recently reported a net profit of $1.45 million in
the six months to December 31, compared with a loss of $2.3 million for
the previous corresponding period.
The total revenue increased by 13.9 per cent to $29.2 million and
EBITDA increased to $3.25 million for the six months from $2.59 million
previously, and there were no further abnormal write-downs recorded in
the period.
All the wholly owned businesses contributed positively to the
group profit.
CCI Australia Pty Ltd performed well during the period,
maintaining its position as Australia's leading coal superintending
(export certification) company, catering for more than 45 per cent of
the export market.
Some of CCI Australia's major achievements during the period
included:
* Renegotiating contracts with higher prices with most
customers, as a result of the company's excellent service and recognised
contribution to the industry markets. This process has been helped by
high coal prices realised by the mining sector.
* Renewing its major export superintending contract with long
standing customer BMA for a further three years at tonnage levels
similar to last year.
* Growing CCI Australia's environmental business significantly
during the period. In addition, this business has now moved into higher
value added consulting activities.
* Recording zero lost time injuries in the period, reflecting
the company's serious focus on safety.
* Accelerating training within CCI Australia. The first group of
supervisors have completed Certificate IV training in frontline
management and this programme will be rolled out to other areas in the
group.
CCI Pope Pty Ltd performed very well during the period,
demonstrating its leadership in the fields of non-destructive testing,
condition monitoring and metallurgical services. Revenue and returns
were both comfortably above budget.
Very strong demand for Pope's suite of asset reliability
technical services was underpinned by the resources sector, in
particular coal.
Some of CCI Pope's major achievements during the period
included:
* Fulfilling the increasing demand from the industry for the
use of the CCI Pope's unique ShafTest ultrasonic technology to check the
integrity of critical shafts in heavy equipment and structures.
* Providing highly specialised support services in a number of
offshore locations for one of the world's leading aircraft engine
manufacturers.
* Reducing skill shortage pressures through continual emphasis
on the company's internal traineeship and by further successful
recruitment drives overseas. These programmes have enabled the company
[to meet] the demands of industry clients in remote locations, which are
extremely challenging to service.
* Continuing the company's excellent safety record by recording
zero lost time injuries in the period.
* Introducing value added reliability engineering services to
its market.
* Enhancing and rolling out the beta version of ARMour On Line,
CCI Pope's specialised data and report management package.
CCI Engineering Pty Ltd, CCI's hydraulics service provider,
continued to build on its stable platform of upgrade and maintenance
work with significant Hunter Valley based companies such as Hydro
Aluminium, PWCS and Onesteel as well as many other Hunter Valley
operators. It has contributed positively to group results throughout the
period.

SHARE PRICE MOVEMENTS
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Shares of CCI Holdings on Friday sold steady at 17.5c. Rolling
high for the year has been 19.5c and low 12.5c. The company has 131
million shares on issue with a market cap of $22.93 million. The
directors decided not to pay a dividend for the period because they
believed that at this stage reinvestment in plant and equipment would be
more prudent and will give better value to shareholders in the longer
term. They will reappraise the scope for a dividend after the results
for the full year are to hand.
CCI Ukraine Ltd also performed very well during the period.
The company's major achievements during the period included
substantially increased volumes of work and profit during the period
through its customer sectors and the signing of several new contracts
with Electric Power utilities in the Ukraine for quality control
services.
There were differing performances reflected from CCI's joint
ventures.
PT Surveyor-CCI, the company's Indonesian joint venture
superintending company, increased its business although recorded a minor
loss of $28,616 in the period.
This business has more than doubled in the last twelve months
and the board recognises its potential for the future.
PT Surveyor-CCI has an expanding client base and has very good
opportunities to grow to become an important contributor to the group.
On the other hand, the new management of the Indonesian engineering
joint venture, PT CCI Indonesia continues to struggle with inherited
financial and other handicaps.
The business is being monitored closely.
Legal proceedings for the Group have shown no change since
the November annual general meeting.
Mediation continues with the outstanding claim on Barclay
Mowlem and the company is are awaiting a likely hearing date of July
2006 for the JV Cannane litigation.
Commenting on the future outlook, directors say the current
buoyant market conditions and growth opportunities are expected to
continue for some time.
The board is confident that various initiatives taken by
it and management over this period will improve customer service
delivery and increase market share and will complement the group's
strengthened finances.
In the immediate future attention is being given to reducing
debtor levels, increased training and upgrading of reporting systems.
Results for the full year are expected to continue the growth
shown in the first half.
A new strategic plan for the company is being developed. Group
objectives include planning for significant growth in CCI's core
and new activities over the next five years, coupled with an ongoing
application of prudent financial controls.

BACKGROUND
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CCI Holdings Ltd is the holding company for a group of
synergistic companies providing a range of services to the Australian
and international coal industries.
The company operates through subsidiaries including CCI
Australia, CCI Engineering, CCI Pope and CCI Ukraine.
While the coal industry is its major focus the company's
services are used by a number of large industries such as oil and gas,
steel, petrochemical and construction.
CCI was listed on the Australian Stock Exchange in 1991 and
has experienced rapid growth with revenue increasing seven-fold in ten
years.
It has about 1,700 shareholders who have enjoyed substantial
dividends over the years.
The company is old fashioned in that it is focused on earning
profits, paying tax and rewarding shareholders.
CCI employs more than 600 people world wide, many whom have
worked for the company for more than ten years.
The staff represent the second largest shareholder in the
company with shares held in their own names or the company-sponsored
Employee Share Scheme.
Coupled with the shareholding of the founder and managing
director, employees speak for approximately 13 per cent of the company's
shares.
CCI personnel have a wide range of qualifications in disciplines
such as geology, mechanical engineering, environmental science,
metallurgy, chemistry, physics and mathematics.
Other skills are in mineral processing, environmental science,
software engineering and process and dynamic systems modelling.
ENDS
!END