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RCR Tomlinson

By Dan Stratful (AFA)

Thursday 30th August 2012

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RCR Tomlinson (ASX: RCR) has reported a buoyant financial year in the year to 30 June 2012 (FY12) and it reported 2 profit upgrades in the lead up to the release of its FY12 results.

Its first profit upgrade in June 2012 informed the market that profit would be 15% higher than FY11, while this was upgraded again in July 2012 to a 40% profit increase.

RCR pinned the result on increased project activity in the Resources business and continued strong demand for materials handling equipment in the Mining business both of which helped RCR report record first-half revenues of $333 million in the 6 months ending 31 December 2011. The momentum of the 1H has obviously carried over into the remainder of the year as record FY12 revenue of $808.7 million was reported an increase of 33% as net profit rose 40% to $27.3 million.

RCR experienced a solid operating performance which saw EBIT margins of 5% and it finished the year in good financial shape with no debt, a cash balance of $45.2 million and a record order book which doubled to $618 million at the close of the year.

RCR also finished the year with a 3 year total shareholder return compound annual growth rate (CAGR) of 47%pa which saw it outperform the market and many of its peers.

Earnings per share (EPS) rose 38% to 20.51 cents which leaves RCR trading on a FY12 PE Ratio of just 8.4x.

More growth is expected in FY13 and RCR reports that it's mid and long-term growth prospects remain positive with a recent new contract win with Fortesque Metals. Analysts' expect a $31.5 million profit in FY13 and a $33 million profit in FY14 and the consensus recommendation is ‘strong buy'.

About RCR Tomlinson:
RCR is a multi-disciplined engineering company providing integrated solutions to the Mining, Energy, Resources and Power sectors. RCR's origins stretch back over 100 years and it listed on the ASX in 1996 after a merger between listed companies RCR Engineering and Centurion Industries. Today RCR has four operating business units - RCR Mining, RCR Energy, RCR Resources and RCR Power. With its head office in Perth, RCR services its clients in Australia, New Zealand and Malaysia.

Status: GROWTH BUY

RCR's shares today traded at $1.73


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Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


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