Bateman Engineering Share Discussion Threads

[alun rm] 10/7/2008 09:27

What we really need is Bateman to clarify the situation - but given their history of poor communication that make take them some time. In the meantime, well this baby could go anywhere. There are no buyers and the news is all bad. Come on Bateman, get control of the situation, tell the markets what is going on.

[simon gordon] 10/7/2008 07:43

Hi Steg,

Ausenco's share had fallen 16% since the fire and maybe to draw a line under the matter and clear uncertainty they have decided to make this provision. The share was up 2.5% today - so it has halted the decline.

Maybe insurance will cover it but it could take months to settle.

[stegrego] 09/7/2008 21:14

Simon

Why is it going to cost BATE 10 mill?

Also, yesterday they said it was covered by insurance - why wouldnt it still be?

Partner pays $8 mill, perhaps thats to get things moving on the order front whilst insurance claim is sorted out?

[simon gordon] 09/7/2008 19:50

So much for the insurance!

BATE now looks like a busted flush with the only potential uspide being Global Minerals taking them private.

Sentiment and profits for 2008 are shredded.

-----

2008 to 30th June

PBT forecast prior to Lumwana = $28m

Lumwana hit - $10m

New PBT = $18m

EPS = 16p

P/E @ 16p
£1.40 = 8.8x

-----

2009 to 30th June

PBT forecast - $38m

EPS = 33p

P/E @ 33p
£1.40 = 4.2x

-----

If you net away the Net Current Assets of $40m the p/e is:

£1.40 = 61m Market Cap minus 20m = 41m divided 7m PAT for 2008 = 5.8x.

£1.40 = 61m Market Cap minus 20m = 41m divided 14m PAT for 2009 = 2.9x.

-----

It will be interesting to see at what price the market makers take the share.

Global Minerals own 62%.

[affc21] 09/7/2008 18:02

Ausenco's view of the fire at Luwana copper project:
--------------------


Ausenco pays $8m after Equinox fire
9-July-08 by Edited announcement


Latest News

Engineering company Ausenco Ltd will provide West Perth-based Equinox Minerals Ltd with $8 million in additional costs following a fire at the Lumwana copper project in Zambia.

Earlier this week a fire damaged the main 20 MVA transformer and adjacent 11kV substation, which forms part of the process plant facility currently being commissioned by Ausenco and joint venture partner Bateman Engineering Ltd.

Ausenco chief executive Zimi Meka said the company was accelerating the replacement of damaged equipment.

An investigation into the fire is underway.

"In addition, a number of sourcing options for replacement equipment are being worked through so as to minimise any further delays in achieving project completion," Mr Meka said.

The length of the delays is not known.

Below is the full announcement:

Global diversified engineering services group, Ausenco Limited (ASX: AAX) has announced in response to the fire at the Lumwana Copper Project this week that it would provide for A$8 million (after-tax) in additional project costs in its 30 June 2008 half year financial accounts. The quantum is based upon conservative management estimates and Ausenco does not currently anticipate the need for any further provision being made. The provision is based upon current estimates as at this date and pending the outcome of investigations into the incident, which are
currently in progress.

The fire, in which no one was injured, damaged the main 20MVA transformer and adjacent 11kV substation, which forms part of the process plant facility currently being commissioned by Ausenco and its joint venture partner Bateman Engineering Limited for Equinox Minerals Limited.

Ausenco Chief Executive Officer Zimi Meka said "the Group was expediting the replacement of damaged equipment. Commissioning work was continuing in other areas of the plant."

Mr Meka said "the transformer and substation have been successfully operating for a number of weeks with the incident being unusual in Ausenco's experience. An investigation into the incident was well underway with experts expected on site this week to inspect the damage and investigate the possible causes. In addition, a number of sourcing options for replacement equipment are being worked through so as to minimise any further delays in achieving project completion."

Mr Meka acknowledged the Lumwana project team's rapid response to yesterday's incident.

"We will continue to provide our full support to the team who are all safe as they work to restore full commissioning operations at the plant. Ausenco is liaising closely with Equinox Minerals Limited to ensure a timely resolution of the matter."

"Our focus is on overcoming this hurdle, completing plant commissioning and getting it operating for our client as soon as possible."

"Ausenco's fundamentals remain strong and we are confident of achieving healthy profit growth in the current financial year."

[alun rm] 08/7/2008 13:18

Nick, to be fair on BATE the fire only occured yesterday and it was on the news wires by about 5pm - so anyone with a google alert knew last night. The market didn't react in the first hour, so I don't think that anyone in the market had some sort of advantage over us punters.

It is intereting to see that a small fire that will probably cost the firm next to nothing has taken 15% off the market value. It just goes to show that when sentiment is poor the market will react brutally to the slightest bad news.

Let's hope the next RNS will be good news about the Mexico contract. We deserve a little positivity.

[nickcduk] 08/7/2008 12:34

No wonder the company wins investor relations awards from analysts. Someone obviously knew what was coming out this morning. Would have been nice for the company to have let us know from the off rather than after the shares had fallen 10%+. I think its an opportunity though and will look to add to my position later on today.

[alun rm] 08/7/2008 12:32

Certainly is bad luck, just as the wider market struggles BATE needed to start getting some good news around the stock and instead we get a fire! With no buyers out there, the share price is in free fall. Anything could happen. If the equipment is covered by insurance, then this should not be material (at least not significantly) but with sentiment so poor the share price is in real trouble here.

This could take quite some time to turn.

Good luck to all holders!

[simon gordon] 08/7/2008 12:26

This looks like bad luck - at least its covered by insurance:

Damage to Process Plant equipment at Lumwana Copper Project

Bateman Engineering has reported a fire occurred at the Lumwana Copper Project in Zambia yesterday (7 July 2008), which damaged the main 20MVA transformer and adjacent 11kV substation. No-one was injured in the incident.

The equipment forms part of the process plant facility currently being commissioned by Bateman Engineering and its joint venture partner Ausenco for Equinox Minerals Limited.

Bateman Engineering Chief Executive Officer Designate, Mr Eddie du Rand, said,
"The cause of the fire is not yet known but a delay in the project's completion is expected. An investigation has commenced and we will keep the market fully informed of progress. Equipment damage is covered by insurances."

-----

This is what a 20MVA looks like:



I read that a mine in Gibraltar recently had a similar problem and the transformer was replaced in two weeks. Could take longer in Zambia.

[alun rm] 03/7/2008 08:03

There is no doubt that the award goes against common sense. The old team really did not handle the newsflow well and as a result the story surrounding the stock has been tainted. Sentiment is so important in share price management and it only take a quick glance at the chart to see that this share price has been badly managed.

Having said that, there is now a new CFO and a new CEO. The firm has a good balance sheet and they operate in a booming industry. So the $64,000 question is, can they create some positive sentiment around the stock and get the share price moving? Only time will tell.

[simon gordon] 02/7/2008 16:59

BATE have stated to me that they only realised that Hindustan was a problem in late November and early December. BATE only told the market at the Interims - March '08. Maybe it leaked with the CFO leaving in February but I understand that it didn't. The broker note in February does not mention Hindustan.

-----

P.S. The company should have issued a Trading Update in early January. Seemingly the old CFO was not keen on them. Tis a bit crazy that they have won this award.

[nickcduk] 02/7/2008 11:00

I find that article really amusing. I wonder whether the analyst were so full of praise because they were tipped off about the huge contract problem in India and therefore allowed to sell out before the 60%+ fall in the share price. It was disgraceful that the company never told the market about the problem when news had obviously leaked out.

[alun rm] 02/7/2008 10:45

Bateman picks up an award for investor relations:

Bateman Engineering was honoured with a Special Award for Excellence in Investor Relations by a non-UK company on AIM at the annual IR Magazine Awards, held on June 25 in London, UK.

In explaining why Bateman Engineering had received an award at this ceremony, which is not usually open to non-UK based companies, Jeremy Lankshear, the awards manager, said: I am delighted to let you know that Bateman Engineering has won an Award for excellence in IR by a non-UK company on AIM in the IR Magazine UK Awards 2008.

This is not a category that we present annually. The UK awards focus predominantly on British companies rather than overseas based companies, as we have events in other regions across the world that focus on those companies. However, Bateman Engineering were so far ahead in the AIM research that we undertook, and so much praise was given by the analysts regarding your IR, that our senior team at IR Magazine have made the unprecedented decision to present this award to Bateman Engineering as a one-off.

The IR Magazine Awards are now in their 18th year and are globally recognised as the most prestigious and accurate measure of outstanding performance within IR. Your nomination is the result of an independent investor perception study that gathered votes from over 600 buy-side and sell-side analysts and fund managers.
For further information about the Awards, visit www.irmagazineuk.com.

Awardwinners.doc

[alun rm] 01/7/2008 10:02

Nice to see Eddie is buying a few shares. He looks like a quality individual and we can only hope that he is able to steer this business onward and upward in a booming industry:

Bateman Engineering announces that Jonathan Edward (Eddie) Du Rand (CEO Designate) has on
30 June 2008 acquired 15,000 shares in the
Company at a purchase price of 170 pence per share.

[hereswally] 01/7/2008 05:31

In the half year report Dr Gounden wrote 'Noting the positive changes made in the first half of the year, I am confident of a significant improvement in our results for the second half of the current year.'

Eps for the first half was about 22 cents so they ought to be able to pull in 46 cents for the full year to give a PE of 7.5 ish

However, having had the CEO and CFO jump ship or be booted out before the end of their tenures this would be the perfect time to kitchen sink bad news and give the new management a clean slate to build on.

[gb904150] 30/6/2008 20:14

The Board is pleased to confirm that it expects that its results for the full financial year ended 30 June 2008 will be in accordance with management's expectations.

Could anybody please elaborate on what those expectations are?

[alun rm] 30/6/2008 17:30

Simon,

Volume isn't huge after the presentations, but it may take a day or two for the fundies to get into buying mode. Time will tell, but looking at the big picture, I really like the way Bateman has restructured their management in response to execution problems. If the share price is depressed because of problems with project execution, at least they have formed a strategy to solve it.

Here is one view from inside the industry:

Gounden bids Bateman farewell
Allan Seccombe
Posted: Thu, 26 Jun 2008
[miningmx.com] -- SIVI Gounden has resigned as Bateman Engineering's chief executive and will be replaced by Eddie Du Rand, the group's deputy CEO, the company said on Thursday.


Gounden resigned to pursue "other interests", the company said, adding he would remain at his post until 25 July to ensure a transfer of responsibilities to Du Rand.

Du Rand's appointment has to be approved by an extraordinary shareholders' meeting on 25 July.

The management changes at the very top of the company follows a spate of senior management appointments in the first quarter of 2008 to make sure large projects were successfully executed.

This was after the Hindustan Zinc project in India had run over its budget and time targets. The managing director in India was been replaced by Thys Greeff.

One of the key appointments was that of Du Rand to the deputy CEO role to "ensure a coordinated and consistent approach to project execution and risk mitigation across the Group."

Bateman said in March it was moving away from lump sum turnkey projects towards reimbursable and hybrid projects to mitigate risk in a high demand inflation contracting environment.

The AIM-traded company, which provides services to mining and metals industries, had an order book worth $461m at the end of the first half of its financial year.

Full-year results are due in September and the company said: "The Board is pleased to confirm that it expects that its results for the full financial year ended 30 June 2008 will be in accordance with management's expectations."

[simon gordon] 26/6/2008 08:00

No surpirise that Eddie Du Rand is to become the CEO - I like how BATE groomed him for the position - very professional.

Let's see if the CEO and CFO can sell the story to the Fundies over the next few days - watch the volume.

[stegrego] 26/6/2008 07:58

Trading Update
The Board is pleased to confirm that it expects that its results for the full financial year ended 30 June 2008 will be in accordance with management's expectations. The Board believes that the Group remains well positioned to take advantage of the current positive market environment for its services and is confident in the growth prospects for the Group as it approaches a new financial year. The Groupanticipates announcement of its preliminary results for the year to 30 June during September 2008.

[berry786] 26/6/2008 07:58

Looks like a good update, everything in line with management expectations. Maybe we can get away from these ridiculously low levels now.

[alun rm] 23/6/2008 20:26

Let's hope that shareholders will also be dancing after this week's presentations and the city's reaction.

[simon gordon] 23/6/2008 11:41

Corporate Intranet:

'The Minerals & Metals mid year party on June 18 got many a foot tapping. In his welcome speech, Deputy CEO, Eddie du Rand, thanked the staff for their commitment and dedication over the past year. Predicting a good financial year end for the company, Eddie said that the legacy issues on some of the projects over the past months had been successfully overcome and he looked forward to further project successes in the coming months. And with the delicious lunch over, staff took to the dance floor to celebrate the past financial year and welcome the new one in.'

[affc21] 19/6/2008 17:19

Thanks for the updates Simon.
As I have said before - its very much appreciated.

PS also with Thanks to VRS (from iii) for sharing the above correspondence.

[glasshalfull] 19/6/2008 17:04

Thought I had forwarded it on Rivaldo?
On it's way......