# SND - Saunders International



## So_Cynical (22 October 2009)

Saunders international Ltd is the leading Australian specialist in the Design, Construction and Maintenance of Bulk Storage facilities for the Water, Petrochemical and Infrastructure industries.

I figure there's alot of upside to SND with very little risk, SND is a niche business with over 50 years experience, its a business that's difficult to duplicate especially in a small market like Australia.

SND don't just make new tanks etc, they have a dual revenue stream being the principal provider of storage tank maintenance services to 6 of Australia’s 7 major operating petroleum refineries.

I brought a few today @ 30 cents as that has previously been a profitable level to buy at and figure that 1 half decent (new contract) announcement would be SP positive.  


Market Cap: 23,610,000
Shares on issue: 78,700,000
Cash: 14 mill
Debt: 0
Annual revenue above 55 million
Pays fully franked dividends twice per year
52-wk Low: 0.22
52-wk High: 0.40
Top 20 hold over 82% (2008)
First listed: Dec 2007 

Annual report 09: http://www.asx.com.au/asxpdf/20090824/pdf/31k8h8qs1cs0qp.pdf

Saunders site: http://www.saunders-international.com.au/

My opinion only ...of course.  DYOR & MYOD


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## So_Cynical (3 November 2009)

So_Cynical said:


> I brought a few today @ 30 cents as that has previously been a profitable level to buy at and figure that 1 half decent (new contract) announcement would be SP positive.




The SND share price hit 34 cents today on some unusually large (for SND) volume...and that was my cue to exit 12% above my entry of a few weeks ago  this is a great little company so im happy to leave a little in (and profits) for the long term dividend returns and exposure to the SP upside.

I think SND is a great example of a low vol (safe) stock that's trending sideways beautifully...regularly presenting retrace trades for those with patience and time.


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## So_Cynical (24 August 2010)

Investor presentation released to market today...and full year report yesterday.

http://www.asx.com.au/asxpdf/20100824/pdf/31s256nm919d0b.pdf
http://www.asx.com.au/asxpdf/20100823/pdf/31s1j6t7jwd1vz.pdf

Highlights include.


Net profit after tax up 20% (year on year)
Revenue down 20% (year on year) 
Earnings per share up 17.5% (year on year approx)
Dividend up 50% 
work in hand approx 33 million 
No debt
20+ million in cash (approx 25.5 cents per share)

Saunders share price hit a 22 month high today (50c) on the back of all that good news, positive outlook and great numbers....i really need to have more money in this one, im spewing i missed out on buying a few more in the last dip in June, i had a buy order sitting there for a week and just couldn't get filled..it was a light volume fall and i wouldn't pay the extra 2 cents a share to buy at market. 

Hate it when i make the right decision but just don't throw enough money at it...anyway lots to like about Saunders, its just a great business to be in, so glad i left alot of my initial entry in.
~


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## adds4 (6 January 2011)

good company with a strong order book, strong cash balance of 20m+, and a market cap of 45m. In essence the business is only really valued at 25m, or around 30 cents a share, pays a 4 cent dividend, and has earnings of 5.2 (2009/2010), so a pe of 6 (excluding the cash)


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## So_Cynical (12 May 2012)

I added to my SND holdings late Friday afternoon, paid 0.455 so should get a yield close to 11% gross going forward...for anyone interested i have linked to an investor presentation from Feb of this year.

http://www.asx.com.au/asxpdf/20120224/pdf/424lg7n45vtj8m.pdf

SND have no debt and 15 million in cash...0.45 should be support.
~


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## So_Cynical (2 August 2012)

So_Cynical said:


> I added to my SND holdings late Friday afternoon, paid 0.455
> 
> SND have no debt and 15 million in cash...0.45 should be support.
> ~




Well SND still have a hunk of cash and no debt, and 0.45 was support of some kind....the SP dipped below a few times but those dips were usually just a couple of trades, anyway SND traded at a 12 month high today up 11.5% on news that they have 2 new contracts worth 21 million.

Puts my open trade from May in serious profit  in fact 27.24% profit and im letting it ride :grinsking we could see a new all time high close above 0.60 soon, just a couple of cents more will do it...3 year chart below.
~


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## So_Cynical (21 August 2012)

So_Cynical said:


> (2nd-August-2012) Puts my open trade from May in serious profit  in fact 27.24% profit and im letting it ride :grinsking *we could see a new all time high close above 0.60 soon*, just a couple of cents more will do it...3 year chart below.
> ~




With Today's release of Saunders full year financial report she went over the top to close at a record all time high of 0.635  up 11.4%

I know im talking to myself here with only 570 shareholders on the register.  im just so happy im one of them, i seem to remember some astute investors posting in another thread a while back, saying how it was so important to avoid low liquidity micro cap stocks. 


Highlights


Net Profit up 136%
Final Divided 3 CPS Fully Franked
Special Dividend 5 CPS Fully Franked
Cash 17 mill (approx 21.6 CPS)
No Debt
Work in hand 40 mill

I have 2 parcels


 (Oct 2009) 0.30 CPS ~ Profit 110.27% 
 (May 2012) 0.46 CPS ~ Profit 38.12% 

With the coming dividends my gross dividend return on my original investment (parcel) is around 76.1% :venus: in just 3 years.

http://www.asx.com.au/asxpdf/20120821/pdf/4284prs64x7272.pdf


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## herzy (26 August 2012)

Congratulations SC - seems like a fantastic find. Can I ask how you found it originally? Such a shame it's had a great run up - sounded great back in 2010, will have to have a look myself now...


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## herzy (26 August 2012)

So_Cynical said:


> With Today's release of Saunders full year financial report she went over the top to close at a record all time high of 0.635  up 11.4%
> 
> I know im talking to myself here with only 570 shareholders on the register.  im just so happy im one of them, i seem to remember some astute investors posting in another thread a while back, saying how it was so important to avoid low liquidity micro cap stocks.
> 
> ...




Had a quick read and wanted to point this out:

 - although profits are up 137%, this seems to be almost entirely due to much lower legal costs than last year (~3.75 million in legal costs pretty much accounts for the 137% increase)

- arbitration settlement was successfully appealed, so we can expect increased legal costs (and therefore a significant decrease in profit) next quarter

- revenues are down 17%

I'd be interested in your thoughts.


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## So_Cynical (26 August 2012)

herzy said:


> Had a quick read and wanted to point this out:
> 
> - although profits are up 137%, this seems to be almost entirely due to much lower legal costs than last year (~3.75 million in legal costs pretty much accounts for the 137% increase)
> 
> ...




Legals costs for FY12 were 0.75 mill and for FY11 were 3.6 mill ~ so last years profit was heavily impacted by the legal preceding's and this year profit wasn't....this is a small company dealing with contract work and occasionally there are disputes, this happens with all contract based businesses.

The arbitration settlement unfortunately didn't met with favour from the court so that settlement is now up in the air again...what will be will be, certainly some SP downside risk there.


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## herzy (26 August 2012)

Yeah - shame to miss out on the special divvy, and would have been nice to hold a few months ago, but at this point in time I think I'll pass. Just because sp seems inflated due to high earnings which aren't actually there - and I foresee increased legal costs with renewed litigation, which will impact earnings. Maybe I'll buy post next quarter report, and they report profits down 200% on last! Will watch with interest, seems like an interesting little company.


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## herzy (26 August 2012)

On the plus side, I like that 95% of their customers are repeat customers. On the downside, I don't like that there are 8 customers...


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## galumay (25 January 2013)

I have been doing a bit of research on this one, I dont like that the payout ratio is over 150% for the last 2 years, thats a recipe for disaster i would have thought!


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## McLovin (25 January 2013)

galumay said:


> I have been doing a bit of research on this one, I dont like that the payout ratio is over 150% for the last 2 years, thats a recipe for disaster i would have thought!




Having a quick look at it. They have a lot of cash, way more than they need. Their franking account has ~$4m in it, so they're probably trying to give the cash back to shareholders in the form of FF dividends as the franking credits allow.

They manufacture storage tanks, any idea why their capex is so low? Maybe I need to look at more years but in the last two years they only invested $300k in PP&E.


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## So_Cynical (25 January 2013)

galumay said:


> I have been doing a bit of research on this one, I dont like that the payout ratio is over 150% for the last 2 years, thats a recipe for disaster i would have thought!




Its a recipe for something if its maintained at those levels, SND has a lot of cash and no debt so there can be no disaster based on the payout..once they don't have the money to pay it, well they will have to reduce the payout, i assume you have looked at the 2012 annual report? did you look at page 40? 

3 Shareholders own 59% of the company, 2 are still on the board and the founder and largest share holder Desmond Bryant is retired, these 3 guys get over 59% of the dividend payments...so we can assume that these guys like paying dividends and can also assume that they are in no hurry to kill the golden egg laying goose.
~


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## galumay (25 January 2013)

I think the other thing is as Herzy pointed out, they have a tiny customer base. I reckon its just one of those funny little companies that fly under the radar due to their small cap and have found a profitable little business niche. As So_Cynical points out its illiquid and tightly held by the directors, a nice little earner for those in the know!


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## So_Cynical (25 January 2013)

galumay said:


> I think the other thing is as Herzy pointed out, they have a tiny customer base. I reckon its just one of those funny little companies that fly under the radar due to their small cap and have found a profitable little business niche. As So_Cynical points out its illiquid and tightly held by the directors, a nice little earner for those in the know!




Nice little earner for me with an average price of 38 cents per share...the last dividend was a 27.35% gross return, never mind the 114% open profit.

No way i would be buying it now though...the horse has bolted.

-------------

Thing is you have to look at these company's for what they are, what they do and where they operate..SND has a tiny customer base because the services they provide are niche, the industry's they service are operated by a handful of company's, but the thing is these industry's are vital and are not going to go away and the assets must be maintained for safety and insurance purposes.


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## galumay (25 January 2013)

So_Cynical said:


> Nice little earner for me with an average price of 38 cents per share...the last dividend was a 27.35% gross return, never mind the 114% open profit.
> 
> No way i would be buying it now though...the horse has bolted.
> 
> ...




Thanks for sharing, as per my other thread, I am learning fast that there is an enormous skill to assessing and researching stocks, so many different factors to understand. I guess everytime i add another small learning I am getting closer to being able to make an informed decision!


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## McLovin (25 January 2013)

So_Cynical said:


> Nice little earner for me with an average price of 38 cents per share...the last dividend was a 27.35% gross return, never mind the 114% open profit.
> 
> No way i would be buying it now though...the horse has bolted.
> 
> ...




Good buy. At 40c you were basically paying ~$13m for a company generating EBIT of $5.7m.


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## So_Cynical (21 February 2013)

Half year presentation out today, again no surprises...Interim dividend up 100% to 0.02 CPS 

http://www.asx.com.au/asxpdf/20130221/pdf/42d5kv2814x7jh.pdf


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## swalk88 (23 February 2013)

Strip out the legal payout adjusted for tax and you will notice that the result is rather poor quality (no increase in NPAT due to rising costs/lower margins). I'm out and looking for a better entry point.


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## galumay (22 July 2013)

SND have had a really nice run up since I bought at the beginning of June - up nearly 20% to a close of $0.87 today, I cant find any other news beside their profit guidance on the 4/6, but I am not complaining!

Has anyone heard anything else to explain the run?


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## galumay (21 October 2013)

Great numbers out in the annual report NPAT up nearly 30% this year and revenue up 30% in line. 

Nothing unexpected given previous announcements, but good signs for next year as well, share price has been strong this year and they are one of my best up 40% since i bought in June.


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## piggybank (5 December 2013)




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## So_Cynical (5 December 2013)

piggybank said:


> View attachment 55701



~
Everyone loves a new all time high...especially when its a stock you hold, and have an open position in 



So_Cynical said:


> (12th-May-2012) I added to my SND holdings late Friday afternoon, paid 0.455 so should get a yield close to 11% gross going forward.




Still holding the above trade so im over weight SND in my portfolio...164.44% open profit on my whole SND position (2 parcels) and do i wish i had gone harder.


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## galumay (5 December 2013)

Yep, one of my best performers too. Wonder what caused the spike today?

Edit, this i guess!

"Saunders International Ltd (ASX:SND) is pleased to announce that it has received two (2) Letters of Intent for new projects in NSW. These are expected to lead to fully executed contracts to the value of approximately $18 million."


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## So_Cynical (20 August 2014)

2014 Full Year Financial Report out today...highlights below.


 Revenue up 14.6%
 Net Profit up 10.2%
 Full year dividend up 20%
 Cash 19m
 Debt 0

http://www.asx.com.au/asxpdf/20140820/pdf/42rm1ldml5f745.pdf

Interesting spin on the outlook, next 6 months behind the last 6 months and some concern over 3 refinery's closing down and the impact that will have on revenue, countered by the fact that most of the refinery tanks will be converted to import fuel storage and that some multi nationals are planning to build new fuel import storage facility's.

Bottom line for me is that Australia needs fuel storage tanks and that's what Saunders does, so long term all is well.


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## galumay (20 August 2014)

Yes, nice little company, its been one of the star performers in my portfolio, very solid fundamentals, no debt, cash, competitive advantage and strong earnings. Nice bounce in the divvys too.

Tightly held by management and liquidity could be the only concern, but its a long term hold for me so its not really an issue.


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## goccipgp (21 August 2014)

Both MACD and Stochastic Oscillator at au stoxline go green. Looks like there was an opportunity to make money here. Six months target: 1.145


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## tinhat (27 August 2014)

SND is on a trot following full year report and increased dividend. It broke out today above it's previous high of December 2013. Looking good on daily, weekly and monthly charts. A lot of work tendered for and the expectation is that there is a lot of tank conversion work coming up to convert refinery tanks to petrol storage tanks.






Ignore random crosshair lines. Left my mouse pointer on the chart when taking screen shot.


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## galumay (28 August 2014)

tinhat said:


> SND is on a trot following full year report and increased dividend. It broke out today above it's previous high of December 2013. Looking good on daily, weekly and monthly charts. A lot of work tendered for and the expectation is that there is a lot of tank conversion work coming up to convert refinery tanks to petrol storage tanks.




Its been one of my more solid performers, been on a trot for the last 12 months really. Shows there is value to be found in the mining services sector. All the fundamentals are there with this company, well managed, competitive advantage, no debt, steady growth.


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## galumay (29 January 2015)

Ann announcement this morning sent SND into freefall, 

http://www.asx.com.au/asxpdf/20150128/pdf/42w6qp90srzb5y.pdf

Nothing really to worry about if you understand the company well, none the less it free fell from 95c to 66c, i noticed the drop on delay, checked the announcement and placed an order, but I was far too slow! 

Its already back to 76c - would have been a nice little day trade for those that got in at 66c

I guess its partly a consequence of tightly held companies with low liquidity, oh well, there is always next time the so called rational market absolutley gets it wrong!


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## qldfrog (29 January 2015)

galumay said:


> Ann announcement this morning sent SND into freefall,
> 
> http://www.asx.com.au/asxpdf/20150128/pdf/42w6qp90srzb5y.pdf
> 
> ...



in 67c out 73c conservatively as it might fall again tomorrow
crazy considering the news were not bad but hell that was nice pocket money today for me


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## galumay (29 January 2015)

qldfrog said:


> in 67c out 73c conservatively as it might fall again tomorrow
> crazy considering the news were not bad but hell that was nice pocket money today for me




Good move qf, i wish I had caught it at the bottom. I doubt it will fall again, but your money is in the bank anyway!


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## So_Cynical (29 January 2015)

Still one would have to think there is some risk, POO in collapse, resulting in industry spending delays, resulting in falling revenue for SND.


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## galumay (29 January 2015)

So_Cynical said:


> Still one would have to think there is some risk, POO in collapse, resulting in industry spending delays, resulting in falling revenue for SND.




Yep, no doubt there will be some impact of the downturn, but they were already an undervalued company, probably due to size and lack of liquidity. I got in a while ago at 76c so once they recovered to over 70c there was no point in me adding to my substantial holding at basically the same price.


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## tinhat (31 January 2015)

Lincoln Indicators dropped it as a star stock as soon as the guidance was released, which means their fund would have sold out immediately as well as quite a few of their stock doctor subscribers. Given it is a small cap with illiquid trading, the drop in price is not a surprise. I don't think sentiment will be behind this stock in the short run. I also sold out for a small loss. My portfolio is suffering enough volatility right now and I think there are safer bets.


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## tinhat (1 February 2015)

Correction to my post above. SND would not have been in the lincoln funds because it would not have met their liquidity of trading value test for the funds.


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## So_Cynical (21 August 2015)

Placed a buy order in late July at 0.51 - got taken at today's open and decided to sell most this afternoon at 0.564 (average) a surprise day trade that took a month to come along .

Dividend to come.


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## galumay (21 August 2015)

So_Cynical said:


> Placed a buy order in late July at 0.51 - got taken at today's open and decided to sell most this afternoon at 0.564 (average) a surprise day trade that took a month to come along .
> 
> Dividend to come.




Nice trade! They pay a decent divvy too so thats a bonus. Obviously with the results to be released next week someone has had a peek - up 7% on a day the market is tanking.

This is such a good little company, its the one in the sector I have the most confidence about. I should probably have loaded up some more of these in hindsight.


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## So_Cynical (26 August 2015)

Full year financial report released.

http://www.asx.com.au/asxpdf/20150826/pdf/430tnpnwcrsjtf.pdf


 Profit and revenue down by 30+%
 Dividend 4c fully franked
 Cash 18M - zero debt
 Work on hand 28M same as last year.


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## So_Cynical (27 February 2017)

Saunders is branching out paying about 6.2 million for a bridge builder called Civilbuild, mostly cash and will issue a few shares.

http://www.civilbuild.com.au/

Civilbuild has annual revenue of around 22 million thus will be see substantial lift in group revenues, margin pressure continues and the dividend has been cut, a buying op may present soon.

http://clients3.weblink.com.au/pdf/SND/01832755.pdf


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## galumay (27 February 2017)

I read that this morning, So_Cynical, I suspect it will work out well for them. SND is another one of those little businesses, that although listed, is really run like a private company. Without any inside knowledge, my guess is SND have been looking round for some time for another private business to expand and diversify with. Given their conservative style I suspect management will have made sure this deal has been done at a price that reperesents real value for SND. It will all probably take a while to play out, but hopefully we see a return to the sort of returns generated back in the resources boom!


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## So_Cynical (27 February 2017)

I think there will be some skepticism because SND hasn't done this before, however its not rocket science and Civilbuild are a small specialized outfit much like Saunders so should be a good fit, short term i think we could see some share price weakness.


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## galumay (27 February 2017)

So_Cynical said:


> I think there will be some skepticism because SND hasn't done this before, however its not rocket science and Civilbuild are a small specialized outfit much like Saunders so should be a good fit, short term i think we could see some share price weakness.




I agree with all of that, i paid around 70c a few years ago when I first got in, I will probably take this opportunity to top up a bit and average down.


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## So_Cynical (6 September 2017)

So_Cynical said:


> (Oct 22, 2009) Shares on issue: 78,700,000




Saunders are doing a rights issue, 1 for every 8 held with a record date of 15 Sept ~ 50c per new share.

http://clients3.weblink.com.au/pdf/SND/01893191.pdf

This is the first cap raising in 8 years and once completed SND will have about 104 million shares on issue, all in all fairly conservative and far from over the top, and 50c is about where you would want to be buying anyway.

i will participate.


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## galumay (6 September 2017)

So_Cynical said:


> i will participate.




Me too! Its been a good couple of weeks for me, the NWH SPP & now this rights issue with SND. Such a well managed little business, very happy to hold.


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## galumay (21 February 2018)

A very healthy HY report this morning, profits growing faster than revenue whuch is always a good look. The aquisition of Civilbuild looks like its starting to bear fruit. The infrastructure boom in Australia should see SND do quite nicely over the next few years.


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## So_Cynical (21 February 2018)

1c per share FF interim dividend, same as last year so i think we can expect another 1 cent minimum next half thus dividend maintained, yield of 3.33% net again..


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## peter2 (22 February 2018)

Thanks, the weekly chart is interesting and would be very attractive once price makes a new yearly high (>0.63). I like that there's been a few higher lows throughout 2017. The daily traded volume is very low, so it's only for longer term holders.


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## galumay (29 August 2019)

Well its been a rough couple of years for SND and the pain continues for shareholders this year! I have them in the bottom drawer and hopefully the turnaround story will play out over the next couple of years. One of my few dogs!


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## Dona Ferentes (10 February 2020)

"Operational and organisational changes in the past 2 years". ....and a declining shareprice over that time, until recent earnings announcements. Up some 50% in the last month or so. But only back to where it was.


> Saunders International Limited (ASX code: SND) is a multi-disciplined engineering and construction
> company providing design, fabrication, construction and maintenance services to leading organisations
> across Australia, and the Pacific Region. The Saunders Group provides solutions to the bulk liquid storage,
> industrial, energy and resources sectors through the Saunders International business. Intelligent
> ...


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## galumay (10 February 2020)

Just thinking about SND, and I have held for years, is that one of the advantages of buying businesses that have no debt and nice clean financials is that they can stumble along for a long time looking for ways to turn things around. SND is starting to show some signs that they might have finally turned the corner, and if they can return to profitability and even slow growth the lack of debt and simple business model means they should re rate. 

For those reasons I havent minded having it in my bottom drawer all this time.


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## So_Cynical (11 February 2020)

galumay said:


> Just thinking about SND, and I have held for years, is that one of the advantages of buying businesses that have no debt and nice clean financials is that they can stumble along for a long time looking for ways to turn things around. SND is starting to show some signs that they might have finally turned the corner, and if they can return to profitability and even slow growth the lack of debt and simple business model means they should re rate.
> 
> For those reasons I havent minded having it in my bottom drawer all this time.




2 good contract wins and all is forgiven, i too like clean simplistic financials, another big contract win could push them over a dollar.


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## finicky (11 February 2020)

Crap company since Benson the CEO/M.D arrived 12/08/2015. Not buying shares while he 's there. Used to be able to count on maybe 20% ROE for SND except GFC, now last two years a loss and no dividend. Under him SND acquired Civilbuild business in Apr 2017 which is lemon so far. Civilbuild loses money on contracts. Before him SND had a conservative static share issuance then with his ambitions a big equity raise to fund Civilbuild. Gets paid $667k fy19 including a cash bonus.
Disc: held     Sentiment: eventual sell


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## galumay (11 February 2020)

Some fair points there finicky, I have held since well before Benson's arrival and the business has struggled in the mean time. I also haven't added and would need to see material change in the FCF & ROIIC before I did.


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## Dona Ferentes (12 February 2020)

A boutique manager Naos (NCC), with a market cap around $80 million and which holds only 9 stocks (conviction and value Bias)  has been holding SND for years. The Evans boys get under the hood of the companies they invest in. The Monthlies etc often have a bit of detail; more can be garnered at the NCC Investor presentations

_from the July 2019 Monthly review _


> SND released profit guidance for its FY19 results, and provided an update on the order book and profitability moving forward. For the year just ended, SND announced EBITDA inclusive of all restructuring costs of -$0.75 - $1.25 million and revenue of ~$50 million. With regard to the outlook, management stated that the business had won $21 million of new work in the past three months and that work in hand was $60.5 million. A more general comment was made that management believe the business is set up to be profitable in FY20.....





> ....In our view the FY19 result is not ideal, although not unexpected. A significant amount of change has been made to the SND business with the relocation to one main facility, together with a significant overhaul of management. Pleasingly, the work in hand figure of $60.5 million is the largest figure at the start of any financial year going as far back as FY13. Notably, this work in hand figure does not include any large contract wins in the core tank construction business. We continue to believe that SND can organically grow its revenue base significantly, and with a much-improved business structure should be able to deliver an increase in margins over time (July 2019)



_and again in Oct 2019 Monthly review_


> SND was the first NCC investment to hold their Annual General Meeting (AGM), and pleasingly the tone of the presentation was more upbeat than previous years. Over the past two years SND has been a significant detractor to the performance of the NCC investment portfolio but we firmly believe that it has the potential to be one of the top performers over the medium term, and in our view the AGM commentary goes some way to confirming this view. The guidance provided was positive, with the business focused on returning to profitability in FY20. Pleasingly the order book is the highest it has been, despite the storage tank construction business not having a significant order. Over the past two years the business has expanded into new sectors such as plant maintenance and shutdown work for the industrial sector as well as significant expansion into the defence sector. It is also worthwhile pointing out that SND’s largest global competitor, McDermott’s (NYSE: MDR), has recently run into business issues that we believe will make it hard for them to tender on new work due to their financial liabilities, which in theory should provide a much more benign industry structure and lead to more normalised margins.



_and at Nov 2019 AGM_


> Continue to build on existing holdings
> • Saunders International Limited (ASX: SND): One of their major competitors is under significant financial pressure and we believe the tendering pipeline in storage tanks and industrial plant shutdown work is increasing.


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## finicky (12 February 2020)

Yeah well, SND very lame investment I think. Hundreds better out there than this. In this space: $MND, $LYL. 
SND run at a loss last 2 years and below par 2 years b4 that. Lame M.D. Doesn't matter how much work they've got in hand if they haven't tendered properly to get it. A contract is supposed to have a margin and result in a profit. Seems like a case where personnel of an acquired business (Civilbuild) doesn't bother under the new regime.


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## galumay (12 February 2020)

I guess finicky it just goes to show the human condition - 2 people can look at the same thing and see entirely different realities! As I said, I dont disagree with some of your thoughts about the business, but you also have to consider what you might be missing when a fund like NAOS holds a significant position given how few businesses get thru their research and analysis process.

I bought NWH down to 20c when everyone had written that business off, it had fallen from north of $1 where I first bought. Its now probably the very best of the mining services businesses and my 20c parcel that I still hold is up over 1000%. 

Not saying SND is the next NWH, but you have to buy them when no one else likes them to make those sort of returns! I have learnt to be very patient too, and thats easier with a business that has no debt.


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## Dona Ferentes (12 February 2020)

Probably not looking at the same thing but looking at some same thing at a different time.

I'm interested in making a few $$, and feel I could make it from SND if the cards fall the right way. That said I hold MND and have since forever, before the 4:1 split. It's a multibagger, paid about a buck. My invested dollars I get back as dividends, sometimes in a year and sometimes a bit less.  So then it's hard to buy more, it's hard to sell MND but equally it's hard for MND to hit, say, $40. Whereas SND could well double. IMO.

But do I want more exposure in the sector? Tricky.

Glad to have tossed in a grain of sand that may help a pearl form.


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## Dona Ferentes (26 February 2020)

Yesterday's Ann of supplying tanks to the dept of Defence bought in some buying but quickly snookered by today's half yearly and more of same.

(Not T-34s but fuel tanks)


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## finicky (1 March 2020)

galumay said:


> Just thinking about SND, and I have held for years, is that one of the advantages of buying businesses that have no debt and nice clean financials is that they can stumble along for a long time looking for ways to turn things around. ......... For those reasons I havent minded having it in my bottom drawer all this time.




Gee are they really talking about Saunders? 
From the January investment report of the *Naos* Emerging Company's fund (ASX:*NCC*) which, by the way, is trading below after tax NTA , has a good dividend history apparently and has an ex -dividend  date coming up (Mar 13 I think). I am not a holder of NCC.

Naos cmments on *SND*:
"The highlight for the month came from SND which made three significantly positive announcements. The first of these related to the award of a $15 million contract from Sydney Water to build a new reservoir in Penrith. 

The second was a contract win worth in excess of $30 million from Rio Tinto to provide repair and maintenance services for up to 16 precipitation tanks. And finally, SND announced that the 1HFY20 result is expected to be between $1.2-$1.6 million EBITDA on revenues of circa $30 million, with the balance sheet having a healthy cash balance of $9.4 million. 

In our view, these announcements show that SND is shaping up for potentially its best 2-3-year period in the company’s long history. It is also key to note that one of SND’s three major competitors being CB&I, which is owned by Dow Jones listed McDermott’s (US: MDRIQ) filed for bankruptcy protection in January, effectively limiting a competitor for the foreseeable future. Pleasingly the guidance released by SND shows that the business has returned to an EBITDA margin level of ~5% in a time where few if any major projects were recorded.

We believe with a much improved cost base and operational structure SND has the ability to grow revenue from circa $50-$60 million to closer to $100 million, and also to increase margins from the recently announced 5% 
to a figure closer to 8%-9% once the benefits of increased scale are realised and more rational pricing occurs as a result of the more benign competitive landscape."


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## Dona Ferentes (20 April 2020)

finicky said:


> Naos comments on *SND*:
> "The highlight for the month came from SND which made three significantly positive announcements.
> - The first of these related to the award of a $15 million contract from Sydney Water..
> - The second was a contract win ...from Rio Tinto to provide repair and maintenance services...
> ...




_and a Covid-19 impact update from NCC_
• We do not expect any significant change to existing operations.
• SND currently have the largest order and tender book in the company’s history with Tier-1 clients i.e. RIO, Australian Defence Force and Sydney Water. 
• Well capitalised with circa $9.5 million of cash, no bank debt and a further circa $9.5 million in PPE as at 31 December 2019.


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## finicky (30 April 2020)

I recently read that the Australian government was buying oil at low prices to strategically store. But they are are storing it in the USA because we don't have our own storage facilities (tanks). Seems pathetic. Saunders makes tanks. Might have something to do with our fairly non existent refining capabilities as well?


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## finicky (26 May 2020)

Saunders updating on Wuhan Virus impacts on its business today. Not too bad, they'll still make a reduced EBIT in fy20 against several CV19 hindrances and they forecast fy21 to be much improved in revenue and operating margin. But maybe there'll be a global deflationary bust starting Q1-Q2 fy21, see @DaveHcontrarian on twitter!

From Ann:
On February 26 2020, Saunders released revenue guidance for FY20 of $70 million and at the time, Saunders was not aware of COVID-19 or the potential impacts it could have on our projects and supply chain. The productivity and supply chain delays are reducing some margins and have pushed project revenue into FY21. 

The revised revenue guidance for *FY20 has been amended to circa $66 million - $70 million with EBIT margin forecast between 1.8% - 2.3%. *Saunders has reported $77 million in project wins in FY20-H2. The combination of our record order book (in excess of $107 million) combined with the above re-phasing of revenue of existing projects has led to a *target budget for FY21 of $100 million. The EBIT margin in FY21 is forecast to be circa 3.75% - 4.75%.*


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## finicky (23 June 2020)

Still getting bits of work - project wins in FY20 H2 up to $90m now.

Not related directly to this but I still idly wonder whether some time a light bulb might switch on and the Fed Govt might make increased strategic fuel reserves a part of infrastructure policy and spending. Saunders would be in the cat seat for that. I guess the refineries are elsewhere now though. All that cheap oil and we're not buying and storing it.
I don't think anything will get me to buy more SND though while this M.D reigns - maybe a super cheap price.

SAUNDERS INTERNATIONAL SECURES TANK OVERHAUL WORKS FOR BP BULWER ISLAND
Sydney – 23 June 2020

Saunders International Ltd (ASX:SND) is pleased to announce it has been awarded the mechanical refurbishment and upgrade of two further *tanks for BP *at their Bulwer Island site, worth approximately $12 million. This award is a follow on to Saunders works for BP’s Bulwer Full Fuels Project which includes the refurbishment of three tanks and two separate piping projects.

Saunders scope of works for the two tanks includes; mechanical refurbishment, cleaning, protective coating and civil services. This contract will contribute revenue from FY21-H1 through to FY22.

Chief Executive Officer Mark Benson said: “This project further strengthens and extends Saunders long standing valued relationship with BP and reflects Saunders position as a leading maintenance service provider to the oil and gas industry in Australia.”

“Pleasingly this award, previously announced as part of Saunders preferred contractor projects, follows on from our recent announcements and increases *new wins in FY20-H2 to over $90m*”.


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## Dona Ferentes (9 July 2020)

from the NCC monthly:

SND announced its 6th major contract win for 2H FY20 with a $12 million contract for the mechanical refurbishment and upgrade of two liquid storage tanks at Bulwer Island. 


> In terms of potential future opportunities, it is also worth noting that the Federal Government recently announced a Request for Information (RFI) process for potential liquid storage projects around Australia. The purpose of the RFI according to Government is to strengthen local industry, as well as enhance Australia’s onshore fuel security.





> We estimate that if Australia is to store its recently acquired fuel onshore (currently stored in the US), the total spend on storage facilities to reach the necessary capacity, prior to the acquisition of any land and buildings, would be between $1 - $1.5 billion. Submissions close on the 10th of July and we expect a decision to be made later in the calendar year



.


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## Dona Ferentes (26 August 2020)

Saunders International reported a full year net profit after tax of $1.3 million, compared to a loss of $1.6 million recorded a year ago.

Revenue rose to $66.5 million, from $50.1 million last year. Work in hand at the end of June was 110.5 million, up from $60.5 million. It is experiencing strong growth in core services and sectors.


> Saunders is experiencing strong growth in its core services and sectors and an increasing level of new contract business enquiries and requests for tenders in emerging services and sectors, Defence and Energy. Tendering activity shows the value of live tenders at $303.8 million. The pipeline (yet to be tendered) is at $367.6 million.





> Whilst we continue delivering on our recent growth the economic outlook both locally and internationally remains uncertain due to COVID-19. Although the COVID-19 pandemic is likely to lead to further economic stimulus, which should be positive for Saunders, the financial performance of the Group will be dependent on how the continued pandemic impacts our clients and our people. Our FY21 budget is based upon a revenue target of $100 million with EBIT margin of 3.75% to 4.75%.


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## So_Cynical (26 August 2020)

Dona Ferentes said:


> It is experiencing strong growth in core services and sectors.




11 million in cash and no final dividend, in fact no dividend since 2018. A 1c dividend would only cost them a little over a million bucks...


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## Dona Ferentes (26 August 2020)

So_Cynical said:


> 11 million in cash and no final dividend, in fact no dividend since 2018. A 1c dividend would only cost them a little over a million bucks...



the company, in its prudent cash conserving way, did comment on this (and remember revenues would be lumpy)


> Mr Benson further said “_Whilst we remain cautious of the current economic climate we are positive about continued improvement in FY21 and will be focussed to build on the foundations we have set as a result of the implementation of our renewed operating model and the continued strategic diversification into new sectors and services.” _



DIVIDEND
_The Board has declared that the best protection for Saunders against any unforeseen impacts of COVID-19 will be to maintain a strong balance sheet with a net positive cash balance. As a result of this prudent decision there will not be a final dividend payable for FY2020. _(FY2019 final dividend NIL).

maybe they'll pay in the future?


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## galumay (26 August 2020)

As a long term holder I am happy to forgo the divvy and see the business through the current volatile climate. 

At least they are not like the unethical companies that accepted $100k's of JobKeeper payments and then went and increased dividends!


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## Dona Ferentes (8 January 2021)

_Oil refiners and fuel storage providers will from Monday be able to bid for grants of up to $33.3 million from the Morrison government to build diesel storage facilities in a move intended to increase the country's fuel security and provide a lift for struggling refineries.

Federal Energy Minister Angus Taylor will on Friday formally advise of the opening of the competitive tender worth up to $200 million_....

not a ripple.


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## galumay (8 January 2021)

Dona Ferentes said:


> not a ripple.




Probably need to see some contracts before there is any action. Its a rather quiet registry!


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## Dona Ferentes (8 January 2021)

galumay said:


> Probably need to see some contracts before there is any action. Its a rather quiet registry!



The grants/ tender have been telegraphed for a while.   ... and yes, the volume is negligible. 

Naos is a long term holder, which is how I first became interested in SND. Last commentary is from NCC Sept update







> SND announced one of its largest contract wins to date, with a $26 million contract to assist in the redevelopment of fuel infrastructure within the Larrakeyah precinct in Darwin. This win further highlights the diversification strategy that SND has embarked on in terms of both client base and the range of projects. In addition to having a record order book, given there is a number of large government tender opportunities concluding over the few months, we believe the opportunity exists to continue this recent momentum.





> It was also pleasing to see the appointment of Nick Yates (former CEO of BSA) as an Independent Director, who possesses significant contracting and public company experience. Over time, we believe a transition to a majority independent board with an independent Chairman would be in the best interests of all shareholders.


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## galumay (8 January 2021)

Some one must have noticed! Popped up 5% today, its back up to what I paid for it many years ago! One of my original positions in my personal portfolio. I have held the faith.


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## qldfrog (8 January 2021)

galumay said:


> Some one must have noticed! Popped up 5% today, its back up to what I paid for it many years ago! One of my original positions in my personal portfolio. I have held the faith.



The miracle of compounding losses, thanks god we have dividends not...
A bit cynical as i actually believe it is a good time to invest with these guys


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## So_Cynical (9 January 2021)

galumay said:


> Some one must have noticed! Popped up 5% today, its back up to what I paid for it many years ago! One of my original positions in my personal portfolio. I have held the faith.




I'm out on the SP pop, needed some cash anyway, have held for 10 years.


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## qldfrog (9 January 2021)

So_Cynical said:


> I'm out on the SP pop, needed some cash anyway, have held for 10 years.



And the Market gods will ensure you will regret it by next month😊


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## So_Cynical (10 January 2021)

qldfrog said:


> And the Market gods will ensure you will regret it by next month😊




Almost a certainty.


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## galumay (26 February 2021)

Another of my holdings that has had a great H1 2021, looks like the business is really getting back on track.


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## finicky (26 February 2021)

To be beneficiary of Fed govt spending on strategic fuel storage, also Fed and NSW spending on bridge building programs.


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## galumay (26 February 2021)

Yes, it could finish this year in a very strong position if the 2nd half plays out as they hope.


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## Dona Ferentes (18 August 2021)

from Naos, a long-term investor in SND:



> _SND announced a further $10 million in new contract wins, all of which were associated with infrastructure projects. This occurred at the same time as the government announced that nine projects have been offered grant funding to increase Australia’s diesel storage capability. We believe that a significant majority of these project owners are either current or previous clients of SND. The grants can only cover up to a maximum of 50% of the total value of the project, which we believe will preclude some smaller and less well funded competitors from tendering on such work. The decisions on which contractors will assist in building these new projects should be known before the end of the calendar year_.





> _Capping off a very busy period for SND was the announcement of the acquisition of specialist process automation and electrical solutions business PlantWeave. Albeit only a small business with $5 million of revenue, this acquisition provides SND with a significant increase in capability in area sector experiencing increasing demand due to technological change and other requirements. SND has worked with PW previously and we believe there is substantial scope for this business to scale substantially over time whilst delivering strong margins._




And from Saunders, at the time of acquisition: _the acquisition of PlantWeave provides Saunders with an opportunity to expand its technical service offering to its existing clients in the Oil & Gas and Resources sectors. The diversified service will assist with accelerating market penetration into the Defence and Utilities (Power and Water) sectors.  _
_ 
Saunders customers are increasingly moving towards technology driven solutions and PlantWeave will drive Saunders market entry into Cyber Security, Industrial Automation Systems, Process Optimisation and Industry 4.0 Technologies_. 

 ..... still only M/C of less than $80M. Co seems to be getting beyond the 2018-19 overextension.


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## galumay (18 August 2021)

Yes, will be interesting to see the full year results, I have been a holder for years, good little business.


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## galumay (27 August 2021)

Very good FY 2021 result for SND out today, special divvy as well!


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## Dona Ferentes (21 September 2021)

_SND would have been unlikely winners of this contract!!_

A $270 million fuel storage facility will be built in Darwin over the next two years to support continued US defence operations in the Top End. With a capacity of 300 million litres, the facility will be the largest fuel storage project in the Territory once built.

It will be built at East Arm at the Land Development Corporation's future Bulk Liquids Area site, neighbouring the existing 174-million litre Vopak fuel storage facility. 

The US government's Defence Logistics Agency has awarded the construction tender for the facility to *Florida-based* logistics, government, marine and energy solutions company Crowley Government Services.


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## galumay (22 November 2021)

Bingo! As expected Saunders got the bulk of the work for Crowleys on the Darwin Fuel Storage project, a great win for the company.


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## finicky (7 March 2022)

Bad taste post
Bridge building division.








						Civil and Bridge Construction Services l Saunders International
					

Saunders has developed a reputation over many years of accomplishing challenging Civil and Bridge projects. Check out our civil and bridge services!




					saundersint.com


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## galumay (7 March 2022)

Is that way its jumped 10% @finicky?!


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## finicky (7 March 2022)

@galumay  Only 16,000 shares traded mate.
Guess you're glad I got you to hold now 🔥


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## galumay (8 March 2022)

Now we know why @finicky!

SND announces $17m of new contracts and preferred contractor for a further $11m worth of tenders.


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## Dona Ferentes (8 March 2022)

I would think the Heham fabrication yard gives SND a distinct advantage when tendering for jobs north of the Hawkesbury. A big element of any cost would be the transportation of the girders to site.


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## finicky (25 August 2022)

A 1c special dividend!
Record revenue, increase of eps on fy21
Guiding stronger fy23
More than double the work in hand compared to fy21

Held


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## galumay (25 August 2022)

Just read thru the AR, great result for SND, happy hodler here! The divvy is not as good as it sounds, I think the final divvy last year was 1.8c anyway.


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## Dona Ferentes (25 August 2022)

Previous Dividends:


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## galumay (25 August 2022)

Yep, as I said, last year the final was 1.8c anyway. Chart doesnt show final & special for 2022 yet.


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