More Decmil Ark Drama, page-14

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Crumbed Cutlet

351 Posts.

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12/03/15

13:01

Post #: 14902193
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Originally posted by Kaidog ↑

Yes based on the limited information provided on Pipeline and given their work in hand (WIH) is substantially competed they require significant volumes of work.

So my assessment of Decmil is:

1). Limited work in hand with contracts being finalised this FY;
2). Scant "real" opportunities in their core business areas;
3). Depressed market where their core business is focused;
4). They haven't advertise any new projects and given their lack of secured work and the significant lang between work commencing and income they are looking like having a significant hole in their earnings;
5). Negativity surrounding Manus island alleged junket may impact on their future government work;
6). Their village in Gladstone which is providing significant income may become a liability due to likely reductions in room occupancy as Gladstone projects are completed.
7). Decmil is attempting to tender and if successful deliver work in areas new to them like PPP's and this holds significant risk for untested businesses.

No matter how Decmil tries to sell the business it still has a narrow service offering and is only now trying to diversifying the business. This takes time and requires business maturity, which Decmil may not possess and it is therefore likely to feel the impact of the end of the mining boom.

All indicators are turning towards selling.

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Good analysis Kaidog. DCG is hamstrung by very green management and running out of work might be better than desperately buying work they don't understand. This is a problem many years in the making and they'll need some major changes to turn things around. The village could turn nasty from a valuation perspective once the Gladstone LNG projects go live.

DCG Price at posting: $1.26 Sentiment: Sell Disclosure: Not Held
1 Upvote

0 Great analysis

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More Decmil Ark Drama, page-14

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