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Boart Longyear

By Dan Stratful

Monday 12th March 2012

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Boart Longyear (ASX: BLY) is the world’s leading provider of mineral exploration drilling services and drilling products. BLY also has a substantial drilling presence in water exploration, environmental sampling, energy, and oil sands exploration.

Headquartered in Salt Lake City, Utah, with over 10,000 employees worldwide, BLY conducts contract drilling services in over 40 countries.

BLY found itself in financial difficulty during the GFC which forced it to raise capital from shareholders in a deeply dilutive equity raising. However, the company has bounced back and has hired over 1,000 full time employees since 31 December 2010, which shows a good rebound in its markets.

The full year result to 31 December 2011 (FY11) was stunning as full year revenue increased 37% to US$2.02 billion and EBITDA also increased 60% to US$356 million. Net profit of US$160 million was up 89% over FY10 and demand remained strong, particularly in the emerging markets of Africa and Latin America.

The Drilling Services division reported a record year in FY11 as revenue increased 34% to $1.4 billion which saw the Division report a $95 million, or 80%, increase in operating profit.

This is a strong rebound in results even if the results were coming off a very low base.

BLY reports that it is well positioned for additional growth in the year to 31 December 2012 (FY12) and it has provided guidance of full year revenue of US$2.3 billion, a 14% increase on FY11, while FY12 EBITDA is expected to be 27% higher.

BLY clearly has momentum and offers more growth in the years ahead as mining investment and mining exploration increase. 

Status: GROWTH BUY

BLY’s shares today traded at $4.15

For portfolio, sharemarket and fixed income enquires contact:
Dan Stratful at Investment Research Group (IRG)
Authorised Financial Adviser (AFA)
0800 437 8489, 09 304 0232, dan.stratful@irg.co.nz
**A disclosure statement is available, on request and free of charge.


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DISCLAIMER: To the extent that any of the content above constitutes advice, it is general advice that has been prepared without reference to investor’s objectives, financial situation or needs. Before acting on any advice, investors should consider the appropriateness of the advice and IRG recommend that investors should obtain appropriate financial, legal and taxation advice before making any financial investment decision. The report is based on information compiled from public information and private research. IRG have completed the report on a best endeavours basis and do not accept any liability of loss or damage. IRG suggest that clients use this as part of a decision making process and check key data before making any investment decisions.
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