AJL - AJ Lucas Group

[Col Lector]

AJL followers...
The text of the ann released day is IMO highly significant ...read & soak it up ..
IMO a bold strategic move by AJL to tap the broadband roll-out.
Cant believe it was released as non-price-sensitive....or that sp hasnt responded markedly...

Broadband infrastructure at ten times the speed and a third of the cost.
AJ Lucas strengthens trenchless technology leadership through JV with Groupe Marais SA
World leader in trenchless technology, AJ Lucas Group Limited, has agreed with French engineering company, Groupe
Marais SA, to form an Australian joint venture company to exploit Marais’ innovative one-pass, mechanised trenchless
technology for installing telecommunications and energy networks.
Marais’ proven technology has already installed over 20,000 kms of telecommunications, electrical and gas networks
during the past five years.
Developed in France and protected by world wide patents, Marais produces a range of trenchless technology and
installation systems which are, on average, ten times faster than traditional open-cut installation methods and less
than one third the cost.
The joint venture company, Marais-Lucas Technologies Pty Limited, intends to offer Marais’ network installation
technologies to the Australasian market; with particular reference to the proposed broadband roll-out proposed by
the Australian government. The company will rent out machinery, engage in total service contracting solutions as
well as partner in concessions for construction and operation of local loops.
Combining Lucas’ proven project management, linear installation (pipeline) experience and trenchless technology
with Marais’ mechanised systems and telecoms expertise, will introduce to the Australian market a skill set and
equipment base which is unmatched by any other.
Marais-Lucas will offer this expertise to those involved in the upcoming broadband roll-out. Initial estimates indicate
a requirement for more than 100,000 kilometres of trench – which, using a trenchless Marais-Lucas solution is not
only quicker and cheaper but more environmentally sound with less disturbance to local communities.
Allan Campbell, CEO of Lucas said:
“While broadband speeds have steadily increased, traditional cable installation has barely changed. With
Australia planning a network that needs many tens of thousands of kilometres of fibre, we looked at
technologies around the world, and Marais' patented systems were the standout winners.
We're very pleased we've been able to form a partnership with them to bring this technology to Australia.
With the broadband roll-out due to commence next year, we believe the timing is perfect.
“We intend to demonstrate this technology at a field day in October 2008 and expect a great deal of
interest.”
The new company will be based at Lucas’ headquarters in Ryde and will commence operations immediately.
For further information, please contact:
Allan Campbell
Chairman and CEO

 

[grace]

Yes, that announcement was very interesting indeed. More potential for this little market darling IMO.

 

[Col Lector]

Helo Grace.... a potentially major move IMO. Trenchless tech is likely to come into its own as the broadband rollout nears. That it is patented & proven technology bodes well. Doesnt appear a rash decision.
As a diversification ploy from energy/energy services/infrastructure construction it reads well....and builds nicely on AJL's existing trenchless/pipeline division...
Might just print that ann out....

 

[Go Nuke]

Chart looks really good doesn't it.

IMO I see a pennant forming with some good volume and the MACD looking great!

Probably a real buy....if I had any money

Goodluck to those that hold.

 

[michael_selway]

Chart looks really good doesn't it.

IMO I see a pennant forming with some good volume and the MACD looking great!

Probably a real buy....if I had any money

Goodluck to those that hold.

Yep its a nice one, also has coal seam gas...

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 11.8 31.9 44.0 51.0
DPS 2.5 7.0 10.0 12.0

thx

MS

 

[Dukey]

Well - the sp response came today! and a nice one - up 42c.

- thought I had mentioned on this thread that I bought in not long after my previous post... but it seems I didn't - maybe I mentioned it elsewhere.
... anyway - AJL seem to be a very sensibly managed company - the mitchell drilling merger and this new partnership make perfect sense - positioning themselves for a big future across CSG drilling; state of the art trenchless pipeline; + CSG acreage likely to be spun off sometime... all looking good for AJL.
- nice to see some green after some hard days across the board recently!!
-D

 

[grace]

AJL trying to push through that $7 mark today, with the csg sector hotting up again. Thought I would post a chart. All time high is $7.12. Chart looking pretty nice really.

 

[pointr]

I'm someone who leans more toward the fundamental than the technical. There are lots of good things about AJ Lucas. Its CSG drilling services are definitely in place at the right time. In its recent annual presentation it used a phrase something like 'now is the time to separate our CSG assetts to realise value and avoid perceived conflict of interest with drilling customers' I've read other posts saying that when this happens the true value of AJL will be revealed. I dont know when the 'now' mentioned above will be, but I'm looking foward to it. We have held these now for about 4 years from unloved dog to market darling

 

[Aussiejeff]

I'm someone who leans more toward the fundamental than the technical. There are lots of good things about AJ Lucas. Its CSG drilling services are definitely in place at the right time. In its recent annual presentation it used a phrase something like 'now is the time to separate our CSG assetts to realise value and avoid perceived conflict of interest with drilling customers' I've read other posts saying that when this happens the true value of AJL will be revealed. I dont know when the 'now' mentioned above will be, but I'm looking foward to it. We have held these now for about 4 years from unloved dog to market darling

Yikes. Market darling no longer... getting hammered today - plummeting down to $3.55 ATM. I wonder what is causing this very sharp drop (with no bad news?) apart from the expected downturn in the economy?


aj
(I don't hold)

 

[grace]

Could this be the result of margin calls? I am at a loss for why this dropped so low today, but I'm watching it carefully for a top up as I like the stock!

 

[Dukey]

I havn't been around ASF lately due to much work on and not much to say in this dodgy market.... but stunning fall for AJL today... I'm kind of thinking it might be margin calls too grace - the volume was high but not astronomical... maybe just the combination of margin calls + no-one game to buy on a day like today - so no support?

Could also be folks worried about a slow down in drilling... but I tend to think theres so much going on with CSG that they'll have plenty of work regardless.
Plus they still have their CSG reserves to flog
... the world still needs energy...even in a recession.

- watching for a potential bounce tomorrow on this one. dunno if I'll be game to risk more $$ though at this stage.... crazy crazy market - all common sense goes out the window so ??????????????

any thoughts?

 

[Bushman]

any thoughts?

Stupid behaviour by punters.

AJL has just come out and said it will buy 10% of its listed equity via share buy-backs. Best way to protect a very profitable business.

 

[Dukey]

Oh damn!! I forgot about daylight saving and missed the open!!! 13% bounce so far.
AJL directors seem very canny - this buyback both boosts investor confidence & they'll probably make a motza to boot!!
"good thinkin 99"

 

[joelc]

Did anyone else catch the announcement on the 9th of Oct by Molopo in regards to PEL 285, which is AJL 70%, MPO 30%. Molopo states "that in recent months Molopo has received several unsolicited expressions of interest by parties wishing to either acquire or assist in the development of it's interest in the Gloucester Basin."

What are people's thoughts on this? Is AJL infact receiving the same offer or could they quite possibly be one of the parties interested to acquire?

Also on another note, within the AJL Buyback announcement on the 9th of Oct it states "The Company has also secured several pipeline contracts
and is at present negotiating further significant work." But for some reason there has been no individual announcements regarding these pipeline contracts.

 

[Dukey]

Did anyone else catch the announcement on the 9th of Oct by Molopo in regards to PEL 285, which is AJL 70%, MPO 30%. Molopo states "that in recent months Molopo has received several unsolicited expressions of interest by parties wishing to either acquire or assist in the development of it's interest in the Gloucester Basin."

What are people's thoughts on this? Is AJL infact receiving the same offer or could they quite possibly be one of the parties interested to acquire?

Also on another note, within the AJL Buyback announcement on the 9th of Oct it states "The Company has also secured several pipeline contracts
and is at present negotiating further significant work." But for some reason there has been no individual announcements regarding these pipeline contracts.

Well it's happened - AJL said they were looking to offload Gloucester and they have.
Total $$ was 370 Mill - AJL's share = 259M$$$$$$$$$$$$$$$

Now Gloucester had 2P reserves of around 100 PJ last I remember and the price of 370M = about $3.70 per 2P PJ - which is astounding - so maybe they had proved up more gas I didn't hear about.

Now.... If you have a look at the total market capital of AJL today - it's about $$285Mill according to comsec. And has ranged from probably 250M$ to 450M$ over the last year with the ups and downs of the market. At todays MC - the rest of AJL's very profitable businesses are worth just $25 odd Mill. And we know thats not true - I mean they paid $150Mill for Mitchell drilling, and their pre-existing drilling company was bigger... so who wants to do the math...?

basically... todays market capital of $285M - seems ridiculously low when you consider that these guys have juat pulled in $259M cash.... some of which will go towards retiring debt - (not sure how much exactly??..... anybody know / remember?) - but they will still have a HUGE wad of cash PLUS some very profitable and growing drilling businesses PLUS the infrastructure side.

Something tells me that AJL should be in for some considerable revaluation - just as long as their order book remains steady as it appears to have done so far- thanks to the juggernaut of CSG exploration...

Punters... watch this space!!!!!!!!!!
The only downside is the lack of confidence in this market ... but then have a look at PES??

.... any thoughts from fellow AJL holders?? do you like the deal?

-D

 

[joelc]

basically... todays market capital of $285M - seems ridiculously low when you consider that these guys have juat pulled in $259M cash.... some of which will go towards retiring debt - (not sure how much exactly??..... anybody know / remember?) -

-D

"The group plans to retire virtually all of it's 54.4million in debt"
As quoted on AFR.com on Thurs 18th Dec, 2008 under the headline 'Asset sale boosts mining services group'.

 

[pointr]

The same puzzle continues, AJL sitting on heaps of cash, don't know if they have started their announced buyback yet( no ASX notices). Only positive views announced from this historically conservative 'announcer'. Strong CSM drilling presence, infrastructure, particularly water management sounding good. Share price doing nothing/drifting lower on piddling volumes with the average sale today just over 200shares.

 

[resourceboom]

yep, I reckon another case of throwing the baby out with all engineering firms in the bathwater, it will be interesting to know the cash backing after retiring all debt, I reckon its well over half.

also their recent announcements say they are still growing well and not suffering too much from the global crisis (currently anyway)

 

[resourceboom]

I forgot about the SGL sales too, I wonder when those $$$ will enter the companies coffers.

I am amazed at the number of companies who have still profitable businesses with close to or greater cash backing (after debt) then their market cap.

I guess this is how people can make so much money coming out of bad periods on the mkt. Unfortunately there would be probably be lots of people without incoming cash to capitalize on the situation.

 

[pointr]

All good points, probably everyones crystal ball is never as clear as their 'retrospectoscope'. I'm happy with most of the shares we currently hold including AJL. But I'd be happier if I sold them on the 01.07.08 and rebought near their lows