re: ceo reassures me
I guess the bottom-line is that everyones not too sure about the future 'growth' of the company - as dicussed previously it is a contract based company in a cyclical industry(s).
The management MUST show the market thus proof that EPS will grow in '06/07 and 07/08.
Mixed data also doesnt help and adds to uncertainty:
1) Company says EPS 10
2) Aspect research says EPS 8.9 this yr and 9.4 next yr
2) Huntleys research newsletter/research says EPS 9.85 for this yr and a whopping 12.4 EPS next yr
No wonder everyone is confused
Bottom line though is GROWTH
Once we see or get re-assurance that growth is still intact and that the company is growing and will continue to do so, then, the P/E will climb back up to 10 or even more.
I know most of you know this, but I wanted to highlight this to 'others' non regular posters.
We have to be patient, and I think once the report comes out, things will change (hopefully for the better) as EPS 10 is confirmed as well as new tenders/contracts and future growth.
I think with all the 'investment' theyve been making the past yr in different regions plus the fact that they are already established 'players' in the scaffolding and formwork field o/seas (middle east caspain sea region), EPS should continue to grow in a very robust oil and gas/energy sector that will continue to stay that way for years to come.
It may take a little time for this 'investment' in other areas o/seas to flow through, but they are the biggest scaffolding servicer in the caspian sea region plus a 'player' in the local mkt where all contracors have sufferred due to price competition BUT the bottom line is there is sooooooooooooooooo much work in this region right now due to the mining boom, that there will be money to be made and an abundance of work for years to come for all contractors as margins may not be as high , but the volume of work is growing in the region due to the boom!
Long-term its a screaming buy;
Short term
1) Confirm EPS 10
2) prove EPS growth via new tenders/contracts
3) prove that they can compete for labour, and survive the price-cutting for now [ because at the end of the day margins may not be as high as b4, BUT work in the WA region is just growing more and more, so the volume of work in the region supports further 'growth' in operation opps]
Im looking for a bit of a re-rating after the report
PCG Price at posting:
0.0¢ Sentiment: Buy Disclosure: Not Held
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