# GNG - GR Engineering Services



## System (18 April 2011)

GR Engineering Services Limited (GNG) is an engineering consulting and contracting organisation providing high quality process engineering design and construction services to the resources and mineral processing industry.

http://www.gres.com.au


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## Miner (19 April 2011)

Any idea when the scrip is likely to be listed ?  It seems the 80% is closely held and only a small part was released for public.


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## Miner (21 April 2011)

GNG entered into market with 89% premium and almost reaching double the issue price in two days

Promoters and Directors are almost holding 80%. 20% came through IPO.

Solid management and solid order book.

Jo Ricardo and Tony P are astute operators, long time ex WMC colleagues and JR Engineering partners.

In addition Jo is in the board of MIN . Good connection there.

Hope the heavy transaction in first two days and high price are sustainable.

Who knows GNG could be a new Worlie Parsons (WOR).


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## bloomy88 (22 April 2011)

Had a bit of a look at GNG and don't mind the look of them at all.

Very tightly held with 86% of the shares on issue being held by the top 20 shareholders but appears to be a very attractive company with minimal debt, lots of cash and a strong order book.

Based on 31 Dec 2010 half year profit of $10,630,057 / 150,000,000 (shares on issue) * 2 (to annualise)

= EPS of 14.17c and a P/E of 13 (on closing sp of $1.97)

This appears to be fairly attractive also, based on the P/E of their peers in the industry...


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## VSntchr (21 February 2012)

Horrid result out this morning...NPAT coming in at $6.7m for the half.

The company has flagged the following as the cause:

Profitability adversely impacted by 
declining margins resulting from:
 profit recognition accounting 
treatment in 1H12 for current 
projects
 delays in contracts being awarded 
due to uncertain financial and 
commodity market conditions
 increased overheads arising from 
being a listed public company and 
costs associated with positioning 
the Company on a future growth 
platform

...will be interesting to watch the price action this morning.


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## Nutmeg (21 February 2012)

The result was unexpected.  Still, it is important to peer through the fog.  Revenue was up by 12.2% and net cash grew to $51.2 million from $36 million.  

The share price got pummelled, of course, ending at $1.67.  Nevertheless, I think the long term prospects of this company are very good.  Personally, I added to my position at $1.70.  Looking at some of the analysts reports for GNG produced at the end of last year, I think they were overly optimistic.  And as we all know: hell hath no fury like an analyst's estimate spurned!


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## suhm (21 February 2012)

Gapped down on high volume. A couple more cents until it reaches an all time low. Everyone who has bought since listing is out of the money and I tried to get into the float and my broker couldn't get me stock so only insiders and clients of the lead broker got stock in the float.

Revenue may be up but profit is down so you have negative jaws, it may improve as they may have a different method of profit recognition more weighted towards finishing projects. Would need a better explanation of accounting treatment though.

Annualised pe is stil 18.5 vs 12 for forge group who have a much stronger track record and a market darling.

Could be a good one but I don't see this going up soon. I made a similair comment about QBE after the profit downgrade but it seems to be an uptrend now.


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## Nutmeg (22 February 2012)

suhm said:


> Gapped down on high volume. A couple more cents until it reaches an all time low. Everyone who has bought since listing is out of the money and I tried to get into the float and my broker couldn't get me stock so only insiders and clients of the lead broker got stock in the float.
> 
> Revenue may be up but profit is down so you have negative jaws, it may improve as they may have a different method of profit recognition more weighted towards finishing projects. Would need a better explanation of accounting treatment though.
> 
> ...




The question is not whether the price goes up today, tomorrow, next week or next month.  The question is: what is the business doing?  All the signs are that is growing.  And that is what you want from a company that's just listed.


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## suhm (22 February 2012)

You need to look at price and value I love qbe and wdc. I think they are great businesses. I have followed them for years but have never owned any shares in them as the price has always been higher than my value, GNG at 1 dollar was below my value at the current price it is not


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## Nutmeg (22 February 2012)

suhm said:


> You need to look at price and value I love qbe and wdc. I think they are great businesses. I have followed them for years but have never owned any shares in them as the price has always been higher than my value, GNG at 1 dollar was below my value at the current price it is not




I agree, although I would add that you need to assess value first then look at price.  If you look at price first, it is likely to influence your valuation.  I think one of the hardest facets of a business to value with any precision is a business' prospects.  With a business with little history of earnings like GNG, it is much harder, although not impossible. I like GNG's management a lot.  They are owner-operators.  They don't like debt and they know what they are doing.  The share price will buzz around but what matters is the fundamentals.


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## So_Cynical (29 April 2012)

VSntchr said:


> (21st-February-2012) Horrid result out this morning...NPAT coming in at $6.7m for the half.
> ...will be interesting to watch the price action this morning.




The SP fell off a cliff in Feb, $2 to $1.60 



Nutmeg said:


> (21st-February-2012) The share price got pummelled, of course, ending at $1.67.  Nevertheless, I think the long term prospects of this company are very good.  *Personally, I added to my position at $1.70.*







Nutmeg said:


> (22st-February-2012) *The question is not whether the price goes up today, tomorrow, next week or next month*.  The question is: what is the business doing?  All the signs are that is growing.  And that is what you want from a company that's just listed.




GNG closed on Friday at $1.435 ~ you still holding Nutmeg?

These guys are sitting on 51 million in cash with almost no debt, MC of 215 mill...the last dividend only cost em 6 million....the current low could be an opportunity?
~


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## robusta (1 June 2012)

Wow, now the price is getting interesting, I had a buy price in at $1.01 today but did not get filled. I am starting to rethink this one however in favour of something with more consistent earnings.


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## So_Cynical (1 June 2012)

robusta said:


> Wow, now the price is getting interesting, I had a buy price in at $1.01 today but did not get filled. I am starting to rethink this one however in favour of something with more consistent earnings.




Lets face it robusta...your more a value kinda guy than a true contrarian..perhaps stick to what your comfortable with.



When you post on these falling knife threads i get the feeling that your hearts not in it.


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## robusta (2 June 2012)

So_Cynical said:


> Lets face it robusta...your more a value kinda guy than a true contrarian..perhaps stick to what your comfortable with.
> 
> 
> 
> When you post on these falling knife threads i get the feeling that your hearts not in it.




You are probably right, I am not interested in being contrarian for the sake of it however a high quality company that is out of favour is another matter entirely. This keeps me looking at the 52 week lows in the search of another Cochlear, Thorn Group, Data#3, Navitas or M2 Telecommunications.


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## Ves (2 June 2012)

What source are you using to monitor the 52-week lows by the way? Never really considered that myself.


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## robusta (2 June 2012)

Ves said:


> What source are you using to monitor the 52-week lows by the way? Never really considered that myself.




ASX Investor Data

http://asxinvestordata.blogspot.com.au/

You get the 52 week highs and lows, day on day gainers and losers also at the end of the week you get weekly gainers and losers same monthly. There is also a whole lot more, takeovers, buybacks, director dealings, dividend yields....

I found this site on ASF but can not find the original thread to give credit where it is due. This is a invaluable resource to me, for example a couple of weeks ago I noticed BKL hitting new lows so I have had plenty of time to research and decide on a price that would temp me to hit the buy button. Same with GNG, back when it was ~$1.60 I decided to get interested when there was a margin of safety under $1.15 - $1.30 and here I am.

All things equal I would much rather a piece of Blackmores


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## Ves (2 June 2012)

robusta said:


> ASX Investor Data
> 
> http://asxinvestordata.blogspot.com.au/
> 
> ...




Thanks mate  - I'll have a look.  



> All things equal I would much rather a piece of Blackmores



Good company with my limited research... but looks pricey still.  Perhaps it will have some short term profit troubles or similar at some point.


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## robusta (2 June 2012)

Ves said:


> Thanks mate  - I'll have a look.
> 
> 
> Good company with my limited research... but looks pricey still.  Perhaps it will have some short term profit troubles or similar at some point.




Very good company IMO, under $21.00 would start to get interesting.


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## So_Cynical (2 June 2012)

robusta said:


> ASX Investor Data
> 
> http://asxinvestordata.blogspot.com.au/
> 
> You get the 52 week highs and lows, day on day gainers and losers also at the end of the week you get weekly gainers and losers same monthly. There is also a whole lot more, takeovers, buybacks, director dealings, dividend yields....




I Don't want to derail this thread but...im wondering if you noticed the 1 exceptional stock on the 52 week low list, looking again there's actually a few stand outs.


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## robusta (2 June 2012)

So_Cynical said:


> I Don't want to derail this thread but...im wondering if you noticed the 1 exceptional stock on the 52 week low list, looking again there's actually a few stand outs.




REH has been on my watch list  for a long time as has HHL. Neither are cheap enough for me yet.


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## Miner (5 June 2012)

GNG fot a flog and the price came down lower than $1. It could go further lower.\A heavy risk on arbitration as disclosed by the company today.

I beg the question of disclosure. How the company will take the hit of such a big arbitration processing for more than one year in the terms of confidentiality ?

Hope ASx will not put a blind eye.

Interesting this could affect MIN as well. It is primarily the business dealings between GNG and MIN, Joe Ricardo is a director in MIN.

DNH any more !!


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## skc (5 June 2012)

Miner said:


> GNG fot a flog and the price came down lower than $1. It could go further lower.\A heavy risk on arbitration as disclosed by the company today.
> 
> I beg the question of disclosure. How the company will take the hit of such a big arbitration processing for more than one year in the terms of confidentiality ?
> 
> ...




I like how they used Gold Ridge's own words against their claim. I wonder if the arbitrator will accept a defence that all company announcements are made to sound positive... even when in reality it wasn't?!

I guess claims and (bigger) counterclaims are pretty standard tactics in arbitration. GNG's decision on not disclosing early, however, certainly turned out ot be the wrong one. They probably just wished Gold Ridge would just go away quietly...

I don't think much needs to be priced in on this event alone... I'd be more worried with the recent profit downgrade.


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## beatthemarket (20 June 2012)

The dispute will drag on until the arbitration trial in November 2012 and the current market uncertainty is likely to mean more contract delays.  It is difficult to see any good news for GNG for the next 6 to 12 months.


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## trillionaire#1 (21 June 2012)

Pointless trivia : I was told that the MD Joseph Ricciardo is the father of up and coming F1 racing driver Daniel Ricciardo?


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## tech/a (19 October 2016)

Hasn't raised a mention for 4 yrs!!

Up around 19% since I pointed it out on the Charts of Interest thread
on 8/10/16

https://www.aussiestockforums.com/forums/showthread.php?t=31431&page=2


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## systematic (19 October 2016)

tech/a said:


> Hasn't raised a mention for 4 yrs!!





Not completely overlooked.  Included in a portfolio in this post 10 months ago; currently up 156%


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## tech/a (19 October 2016)

systematic said:


> Not completely overlooked.  Included in a portfolio in this post 10 months ago; currently up 156%




That's a great buy
How's all the others going in the portfolio
You posted?


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## systematic (19 October 2016)

tech/a said:


> That's a great buy
> How's all the others going in the portfolio
> You posted?




Individual stocks anywhere from -100% to the likes of GNG.
Portfolio up 37% at last check (no divs included).


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## NotWarrenBuffet (26 September 2019)

As I write (Sept. 26), this stock hasn't traded since Sept 20, and no news or announcements. Anyone got any theories or info?


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## greggles (26 September 2019)

NotWarrenBuffet said:


> As I write (Sept. 26), this stock hasn't traded since Sept 20, and no news or announcements. Anyone got any theories or info?




From the trading halt announcement dated 20 September:


> The Company is seeking the trading halt pending an announcement to the market regarding the status of the operations and maintenance services contract between its wholly owned subsidiary, Upstream Productions Solutions Pty Limited (Upstream PS) and Timor Sea Oil & Gas Australia Pty Limited (in administration) (TOGA), the appointment of administrators to TOGA on 20 September 2019 and the impact of that appointment on the Company.




Sounds serious.


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## finicky (25 August 2020)

*GNG* made a stat NPAT *loss* FY20 but made underlying profit. Took a receivables impairment from an oil vessel contract. Oil vessel corroded and shut down by government on environmental concerns. Doesn't appear to be GNG's fault as it has been awarded a $32m short term contract by govt to keep situation stable.

Cash rose to $37.5m, investments $5.3m, non current debt only $3m.
Will pay 4cps dividend which makes 6cps for full year = *6% ff yield*

*FY21 Update and Outlook*

As the consolidated entity moves into FY21, GR Engineering has a strong order book dominated by Australian projects. 
The consolidated entity expects revenue for FY21 to be in the range of $280 million to $300 million (FY20 $222m) with improved EBITDA margins.

Held
Sentiment: No fat in s.p, looks a bit overvalued.


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## finicky (17 September 2020)

Should be a good fy21 for GNG but work can dry up fast in this industry I've found. Plus they are prone to f*kups from their clients like the recent write off of $17m receivables owed by an oiler client (Timor Oil & Gas) who bankrupted when the government shut them down because of a corroded floating vessel. Gold mining will help support GNG's business for a while yet. Don't hold enough to bother selling if it gets over valued, might as well hang on for the dividends - the original reason for buying GNG.

Appointment as Preferred Tenderer – Warrawoona Gold Project

GR Engineering Services Limited (ASX: GNG) (GR Engineering) is pleased to announce that it has
been appointed preferred tenderer by *Calidus Resources* Limited (Calidus - CAI) in relation to the design and 
construction of the process plant and associated infrastructure for the Warrawoona Gold Project (the 
Project).
The Project is located in the East Pilbara district of the Pilbara Goldfield Western Australia, 
approximately 150km south east of Port Hedland and approximately 25km south east of the town of 
Marble Bar.
Calidus is in the process of finalising operating permits and are likely to commence project development 
in early 2021.


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## finicky (4 October 2020)

Just saw a subscriber video by Nordesmic (between the lines on Patreon) about GR Engineering. He sounds pretty upbeat and took up a position again after selling out due to the Upstream Solutions debacle. That was not GR's fault btw - as underscored by the Aust Govt engagIng GNG to keep the floating vessel stable. Cost over $20m impairment to receivables though.
He reminds that a lot of their business comes from gold plant epc and a lot of money flowing into this services sector. Reminds of client quality implying their good rep: recently OZL, SAR, KLA. Says its illiquid and run almost like a private company with high management ownership and smallish float.

The weekly chart has consolidated the break above $1 resistance and this has been over a year bottoming formation. Low volume however.

GNG 2 Year Wkly


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## galumay (4 October 2020)

You have piqued my interest @finicky - I am off to have a deeper look, although I already have enough of these sort of businesses and at first glance the ones I hold are higher quality than this.


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## finicky (4 October 2020)

Cyclical business @galumay so doesn't look your cup of tea. Could be in for a modest run my guess.
I hold but am not adding at this price, the Wuhan drop was a good price.


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## galumay (4 October 2020)

Yep, I own a couple of cyclicals in the mining services sector, I had more of a look, I do like it, but I would have liked it a lot more around 70c!

I try not to increase the number of businesses i hold as it gets hard to manage keeping up to date with them, so generally I only add a new position if I sell out of another. I have put GNG on my watchlist for inclusion as it meets most of my criteria for an investible business. Thanks for bringing it to my attention!


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## finicky (22 February 2021)

GNG very much back on track with earnings and dividend restored. It's vulnerability to macro conditions and to counter party failure having been recently demonstrated, I can't see how it can be worth 5.5 x book value in the current share price so I wouldnt be even close to buying more. This is a share to buy when it gets smashed sometime through no fault of the company because it will definitely bounce back and you'll get a ridiculous ff yield on the purchase price. Well worth holding meantime for the current still generous dividend. Good visibility of earnings ahead say m.d!


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## galumay (22 February 2021)

Good result, @finicky - no doubt the good mining services businesses are on a strong rebound.


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## finicky (31 May 2021)

GNG @ 1.39 up 4.5% last I looked.
Has upgraded what was already buoyant guidance for FY21 - higher revenue with higher margin than previously expected for H2. Has sailed through the China Wuhan Warfare Virology Pandemic with no impediment to delivery of contracted services and no supply issues for its equipment. Not experiencing labour shortage and is increasing its workforce for a strong pipeline of contracts.

Held


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## galumay (31 May 2021)

Having a great year, finicky, well done.


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## finicky (24 August 2021)

Stellar fy21 result with record revenue and PBT and company expects higher revenue again in fy22 ($440 million to $460 million)

Strong cash conversion with 84% ($69m) more cash in bank than pcp and that is after paying a $14m dividend and paying initial $7.5m cash for an acquisition.

Full year dividend yield is 8.2% ff ($0.12) on yesterday's closing price. Good stock candidate to pick up on cycle lows or really bad news not of its own making - during 2020 covid, plenty of time to buy at less than 70c which would be a 17% ff div yield at yesterday's close.


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## divs4ever (24 August 2021)

yes  a nice result considering there is no genuine civil construction boom ( as there should have been about now )

 i hold GNG , my av. SP is 97.5 cents ( averaged down between August 2016 and November 2019 )

 is doing much better than DCG   ,  but LYL hasn't been doing too badly either  ( i hold both )

be careful but the mining investment boom ( cycle ) should be gearing up in the next two years  , maybe LYL , and GNG  have a nice mid-term future ahead of them 

 DYOR


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## finicky (24 August 2021)

Something I like about GNG given my bias to gold is the majority of work they are getting is design and construction of gold plants. I like the low and steady share issuance of LYL, the big bank balance  and mostly strong ROE. They also have that gold presence. I have followed but never bought - maybe in the next cycle.


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## divs4ever (24 August 2021)

finicky said:


> Something I like about GNG given my bias to gold is the majority of work they are getting is design and construction of gold plants. I like the low and steady share issuance of LYL, the big bank balance  and mostly strong ROE. They also have that gold presence. I have followed but never bought - maybe in the next cycle.



if so , what about SXE ( supplies a lot of power generation gear to mining sites )

(  i hold SXE )

 one company i did do well with after some major scares was NWH  , i have exited them now , and may yet regret that exit

 i was more into copper , nickel  and iron plays up until late 2019 

 but yes i am currently beefing up gold-producer exposure now


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## divs4ever (9 September 2021)

ABRA DEVELOPMENT WORKS RAMPING UP WITH MAJOR CONTRACTS FINALISED
 HIGHLIGHTS: 
 Underground mining contract finalised with Byrnecut with mobilisation in the second half of September 2021 
 Plant construction contract with GR Engineering Services Limited (ASX: GNG) in full implementation, with key long lead items ordered, FEED completed and the final detailed engineering at 15% 
 Red Dust Holdings have commenced site bulk earthworks associated with aerodrome, TSF and plant and infrastructure pads 
GALENA MINING LTD. (“Galena” or the “Company”) (ASX: G1A) announces that Abra Mining Pty Limited (“AMPL”), the joint-venture company for the Abra Base Metals Project (“Abra” or the “Project”) has finalised significant contracts in relation to the development of the Abra lead-silver Project. Figure 1 shows Galena, Byrnecut and GRES executives inspecting the new Abra underground Jumbo supplied by Sandvik. Managing Director, Tony James commented, “A major milestone has been achieved at Abra with the finalisation of the underground mining contract with Byrnecut and the implementation of the process plant EPC with GR Engineering Services. 
Both companies have been very strong supporters of the project over a long period of time and its very rewarding for everyone to see the work starting on the ground.
 The Byrnecut mining contract is for 4 years, with the remainder of this year and the majority of next year focussed on gaining access to the orebody, 230m below surface. 
During this time the mine is effectively a “single heading” decline and the manning requirements for that period are far lower than when the mine reaches commercial ore production in 2023. The actual mining work is expected to commence in the coming weeks. Equipment and labour have been sourced and are ready for mobilisation in the second half of September. 
Page 2 Figure 1 – Byrnecut takes delivery of new Sandvik Underground Equipment for Abra. From left to right, Adrian Byass (Galena/AMPL Chairman), Steve Coughlan (Byrnecut Group Executive Chairman), Tony James (Galena/AMPL Managing Director/CEO), Geoff Jones (GR Engineering Services Managing Director) and Craig Barnes (Galena/AMPL CFO) inspect the new Abra Underground Jumbo prior to mobilisation to site The plant EPC contract awarded to GR Engineering Services has commenced on several key areas including the ordering of key long lead items.
 From an engineering, equipment, and manning perspective the timing of the Abra plant construction is ideal with the pending completion of three other projects GR Engineering Services have been working on in 2021. Red Dust Holdings are doing the bulk earthworks associated with the aerodrome, TSF and plant site and this work has already commenced and is progressing quickly with the expectation it will be completed by December 2021”. Abra Underground Mining Contract AMPL and Byrnecut Australia Pty Ltd (“Byrnecut”) have finalised the Abra Underground Mining Services Contract an

 DYOR

 i hold GNG


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## finicky (1 November 2021)

Upgraded FY22 revenue guidance - $100m increase. Could be a big full year dividend. Also says increased earnings envisaged FY23. Lots of work in design, procure, build mineral processing plants, gold a specialty and I would guess the clients aren't haggling the price down too much these days.

Hold


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## mullokintyre (22 February 2022)

Added this to the long term portfolio today.
Looks to have solid forward contracts, pays a dividend,  happy to hold in the long term.
Mick


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## divs4ever (22 February 2022)

yes i m happy i held strong and bought into the dip years ago 

 but remember this sector is at the mercy of BIG miners and government contracts  , there will be rough periods sometime in the future


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## finicky (22 February 2022)

Turned into a little gem - at least while resources are cranking.
Rev and ebitda both up 71% to pcp. Guiding to similar revenue in second half. Pipeline strong giving them earnings visibility through fy2023 at the least.
Now is not the time to be buying imo, that time would be when resources are in the doldrums, assuming GNG will still be holding ample cash to tide them over.
Almost doubled the dividend - at 9c on a $2.15 s.p, that's a 4.2%ff yield on the interim dividend alone! Pity I've only got 5,000 of them. Heaps of money in the bank after this H1 result, $93m. Had neglible long term debt at end fy21, probably same now. Of course with tax and divs yet to flow out.


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## divs4ever (22 February 2022)

you hold more than me , but yes a pleasant surprise ,  but then i thought the mining investment cycle  would be heading towards the consolidation cycle 

 looks like i have got this completely wrong  but come out smiling ( in the short-term )


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## mullokintyre (22 June 2022)

GNG  announced today 


> The Directors of GR Engineering Services Limited (ASX: GNG) (GR Engineering) are pleased to advise that full year revenue guidance for the year ending 30 June 2022 (FY22) is forecast to be in the range of $620 million to $640 million.



Not half as pleased as I am!


> GR Engineering had previously advised that FY22 revenue was expected to be $580 million to $600 million.



Been hit like all stocks,  its time to add some more.
Mick


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## divs4ever (22 June 2022)

have done much better on this  than my holding in rival DCG

  ( up 89% on GNG  , and down 88% on DCG )

 i guess the difference is management


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## finicky (22 June 2022)

Revised full year revenue up *again*. They're in the clover with high demand for their plant building services.
Last financial year FY21 was a big record at $393m revenue, now this FY22 one will supercede it and visibility into FY23.

Chart suggests that GNG is embarked on a short deserved correction so will be interesting to see if this announcement stems it. I somewhat doubt it in the longer run although I'd expect a good day today at the least. GNG 's +45% ROEs aren't typical - more like around 25% with the occasional loss year in a cyclical industry.

Held


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## mullokintyre (20 July 2022)

GNR announced two more new contracts, so plenty of ongoing work.
Interestingly, the bellevue gold one is just shy of 90 mill, 8 mill of which can be in Bellavue shares.
Quietly heading in the right direction.
Mick


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## Knobby22 (1 January 2023)

Yearly pick. 
Well managed in a good space.


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