If you told me that Decmil was looking to sell their property assets for even $60 million you would not have to weight long for a buyer. Oil & Gas is cyclical! I repeat cyclical! The Australian goverment and industry players are investing allot of money to ensure Australia is a big exporter of LNG and allot of this focus is in Queensland. I find it hard to believe that all these parties are wrong about Queensland. Not withstanding Decmil has experience building properties and villages within the area they would have to be particularly incompetent to be managing this inefficiently.
When it comes to there order book. I think it is right to be realistic on this for the next one or two years, as they would have to be particularly successful in tenders to reach the $450 mil target. However, this is only the short-term which is not going to make or break the company based on their capital structure.
Now in terms of earnings, they are moving into public infrastructure quite aggressively. This is obviously going to drop their margins by 2-3% over the next few years. However, to not include hisotircal performance in any analysis is obsurd. You simply end up relying on economic forecasts which get adjust every day on the hour.
DCG Price at posting:
$1.03 Sentiment: Buy Disclosure: Held
