Hi S1mon... yup i had ASZ in mind re their fantastic 'pipeline'...

Hi S1mon... yup i had ASZ in mind re their fantastic 'pipeline' that went up in smoke. But getting back to SDM this is my hope/expectation.
1) 2HFY12 result about 7% above 1HFY12.
2) Final FY12 div of 5-5.5c ffr. They have oodles of cash and low capex, so can certainly afford it.
3) EPS in FY13 to rise about 15% over FY12.
4) Total divs in FY13 to reach 11-11.5c ffr.

So if SP is $1.50 and div 11.5c=7.67% net. With franking credits = 10.9%. Now one never buys a share coz it has low PE and high divs UNLESS one has a high degree of confidence earnings stream can be maintained. SDM has only about 30% of earnings from long term operation type contracts. 70% comes from construction. Main query is:
A) Can SDM continue to win tenders?
B) Will the numerous planned openings of new coal mines promulgated worldwide actually proceed?
C) Can SDM maintain margins?

I am confident re 'C'. New management have made 'cost-control' a key. 'B' is much harder to ascertain. But the numbers involved are so huge that even if a full 50% of planned ventures never eventuate.... SDM is proficient enough to win a reasonable slice of remaining pie.... that will allow my forecast figures to materialise. Danger is that opponents desparate for new work... tender to simply win work and sacrifice profits. Flip side is that mine infrastructure costing hundreds of millions has to be designed and built to the highest specification.... and this is something SDM excel at. In summary: every purchase carries some risk. My hope is that the current SP warrants a punt.