new ord minnet research report

The revised DCF valuation is now $0.61 per share (WACC 13.0%).


in time it will be on industrea website.

Contract win, site tour & CB buyback...

In the past 10 days Industrea (IDL) has announced a $21.7m extension at
Mt Thorley Warkworth, conducted a HunterValleysite visit for 25
institutional investors and brokers and bought back $17.8m of its
convertible bonds.

The Mt Thorley Warkworth contract extension was for the hire of 7 of
Huddy's Caterpillar 789C dump trucks. Initially hired in Feb 2009 for 12
months the extension is for a further 24 months out to Feb 2012. It
should be noted that this is not the only gear Huddy*s has on the
RIOsite with the most recent addition being a brand new 550T excavator
that was added in October 2009.

The site visit went well with the key takeaway being that AMT, IME, PJB
and WADAM are all having a strong 2HFY10 on the back of the $10m/month
sales rate that has been maintained with Chinese customers over the past
year.

IDL has bought back $17.8m of the $70 convertible bonds. This leaves
$52.2m of the bonds remaining at a conversion price of $0.39 (133.8m
shares on conversion). The bonds are convertible/redeemable on 28 March
2011.

With the bond buyback OMhas made some adjustments for interest expense
and dilution (OMassumes conversion of the remainder in Mar 11). As a
result fully diluted eps increases in FY11 and FY12 by 4.2% and 4.3%
respectively.

The revised DCF valuation is now $0.61 per share (WACC 13.0%).

IDL continues to trade at mid-single digit multiples (FY11 PERof 6.9x).
OMexpects that this 50% discount to market will be eroded as the market
gains confidence in the earnings profile and develops a greater
understanding of the business post the introduction of meaningful
segment information. OMcontinues to recommend IDL as a BUY.