Mdm Engin. Share Discussion Threads

[papalpower] 19/5/2008 08:17

watshot.com buy tip over the weekend it seems.

[stegrego] 19/5/2008 08:15

Definately a tip, question is where.... and what was said

[stegrego] 19/5/2008 07:49

Wondering exactly the same thing..

Looks like a tip

[nurdin] 19/5/2008 07:45

ello...someones keen this morning...tipped somewhere?

[mikehardman] 16/5/2008 20:00

Stegrego - thnx 4 the thread

[stegrego] 14/5/2008 23:04

Apart from the apparent low forward p/e on orders already given, the big potential upside comes from the potential orders....
I bought more today and it seemed to be going very well but a 38,000 sale stopped people in their tracks and the late 100,000 sell would seem to have given the MMs the stock they appeared to be lacking up to that point.



'The Group has an order book totalling four confirmed or active projects and seven scoping and feasibility studies. The aggregated Project Value of the confirmed or active projects is approximately US$400m and the aggregated Project Value of the projects expected to result from the scoping and feasibility studies is approximately US$1bn (although there is no guarantee that the studies will become active projects). Historically, the Former Business had a successful track record of securing the project contracts where the Former Business had previously undertaken the original feasibility study. In over 90% of cases where such studies resulted in a project being undertaken, the project was carried out by the Former Business. The Group has continued to convert a significant proportion of bankable feasibility studies into project contracts and the directors are confident that this trend will continue as the Group expands.'

[nurdin] 13/5/2008 22:28

Good stuff Steg :o)

[stegrego] 13/5/2008 22:08

MDM to add two more construction projects
12 May 2008
Source: www.miningmx.com
By: Allan Seccombe
MDM Engineering plans to have two more construction projects on its books by the end of the year as it uses proceeds from a £4.4m share placement to reward staff and bring in new teams for additional work, George Bennett, an executive director, said on Monday.

Bennett, who founded the company out of the financial ruins of MDM Ferroman at the end of 2006, started off with 20 staff and has grown this to 105. Another 25 to 35 people will be recruited in coming months.

"That will be our optimum staffing level for the next couple of years," Bennett told Miningmx in an interview on the day of the company's admission to London's Alternative Investment Market (AIM).

MDM has four projects on its books worth $400m and will add another two before the end of the year, he said. MDM is building a gold plant and a uranium plant for Ezulwini, a copper plant for Metorex at Kinsenda in DRC and a gold and uranium tailings treatment plant for Chemwes in South Africa.

"We have four execution projects we are busy with and by the end of the year we'll have another two starting," Bennett said.

"We see big demand for projects north of South Africa. We are currently involved in feasibility studies north of the border and we've been awarded another one that we'll be making an announcement on soon," Bennett said.

The feasibility projects are a copper project in the Democratic Republic of Congo, a gold project in the Ivory Coast and a uranium study, which is likely to become a project in Zambia. There is a nickel study in Malawi. The other studies are in South Africa. The value of these projects, if they go into execution, is $1bn.

The new feasibility project is thought to be a uranium study in Tanzania.

MDM has a conversion rate of about 90%, bringing feasibility studies into construction projects, he said. This is, he added, an abnormally high rate for the industry.

"With the current gold price and demand for uranium I foresee a lot of projects coming over the next few years by way of being approved and developed," Bennett said.

"We get two or three approaches a month. We can't take them all on. We take on those where there is a real chance we will end up executing the project, which is where we make our money."

MDM will retain its focus on Africa. The difficulties Bateman has with its project in India serves as a warning to be careful about spreading skills too thinly or too widely, he said.

"There's so much money being spent on projects in Africa and it's on our door step... We have experience and been successful in building projects in Africa so we'll stick with that for the foreseeable future," he said.

MDM has about $4m in cash and the further injection of cash will add strength to its balance sheet.

"We are not in desperate need of cash, but it will strengthen our balance sheet to take on a couple of big projects we have coming on board in the short term," Bennett said.

"More importantly, I will use some of that money to target teams of guys that we need. We're not really going to look to buy other businesses. They're very difficult to integrate, I've found," he said.

One of the other primary reasons for listing was for the share option schemes MDM has and which reach 90% of the staff and could well explain the low turnover rate Bennett says the company has.

[cockneyrebel] 13/5/2008 15:57

If these are trading @ a 60% discount to the sector as the Edison note says then they should have a fair old way to go still imo

CR

[cockneyrebel] 13/5/2008 13:28

Thanks Nurdin, in for a few today - ta.

CR

[nurdin] 13/5/2008 13:20

In the Mail today:

Shares in mining specialist MDM Engineering raced ahead 14½p to 159½p on its first day of trading on AIM.

Investors drilled into the company's strong order book, its competitive pricing model and its cash generative nature.

The directors have indicated that 50% of profit after tax will be distributed to shareholders in the form of dividend payments.

[nurdin] 13/5/2008 12:37

yup...glad I dipped my toe first thing....

[stegrego] 13/5/2008 12:18

Very tightly held with 85% not in public hands.

Means that a very few trades will make it move... of course that works in both directions.

Seems stupidly cheap if forecasts can be met.

I dont think that the fact they went bust in a previous life should be held against them as quality was never an issue.

Also, there are basically very few people out there than can perform these services, so really they have a captive audience for the forseeable future.

[stegrego] 13/5/2008 08:29

Potential orders based on average wins after doing BFS etc on projects i think.

I understood it last night and now cant remember!
A certain amount is booked, i know that if they got everything they are doing studies on then the income went daft to about 150 mill...


Ive bought a few anyway @ 162p to see how it goes..

[nurdin] 13/5/2008 08:22

That revenue growth to $47m in 09 is based on orders already in hand? Cant decide

[nurdin] 13/5/2008 08:01

Looks very interesting..thanks guys

[stegrego] 12/5/2008 17:38

Tax is a lot lower i think.

2%? I think this is due to it being BVI registered

Check out -

Ta v much

Cheers

[simon gordon] 12/5/2008 17:34

Where do you get 5x?

Is the tax rate lower than 28%?

-----

Article in MiningMx - 12/5/08:

"We get two or three approaches a month. We can't take them all on. We take on those where there is a real chance we will end up executing the project, which is where we make our money."

MDM will retain its focus on Africa. The difficulties Bateman has with its project in India serves as a warning to be careful about spreading skills too thinly or too widely, he said.

"There's so much money being spent on projects in Africa and it's on our door step... We have experience and been successful in building projects in Africa so we'll stick with that for the foreseeable future," he said.

[stegrego] 12/5/2008 17:30

Is supposedly on a 09 p/e of 5, but that assumes that revenue goes from $8mill 07 to $47mill in 09.

Looks a big ask to me.

[simon gordon] 12/5/2008 17:15

Emailed MDM.

[stegrego] 12/5/2008 17:07

Simon, how did you get the prospectus? Still isnt on the website afaik.

[simon gordon] 12/5/2008 15:59

12/09 Valuation:

PBT - $21.9m
Tax - 28%
PAT - $15.8
Shares in issue - 37.5m

£7.9m divided 37.5m = 21p

P/E - £1.60 = 7.61x

[simon gordon] 12/5/2008 15:22

Some data from the Prospectus:

~100 staff.
~EPCM contracts, no LSTK.
~Contracts Live x 4 = $223m, $63m, $48m, $45m.
~Propsects x 7 = $600m, $120m, $100m, $60m, et al.

Results - 11 months to 12/07:

~T/O - $8.9m
~PBT - $3m

-----

*Current Trading and Prospects

The Directors believe that the current order book of execution projects and studies demonstrates that the Group is well positioned and at an exciting stage in its development. It is currently engaged on four active execution projects, which, in the period from December 2007 to March 2008 generated average monthly
revenues of approximately US$1.5 million. Over the next four months, as the construction phase of the ChemWes Gold and Uranium project in South Africa increases in activity, the Group's monthly revenues are expected to increase to approximately US$3.5 million.

In addition to the active execution projects, the Group has completed or is currently working on seven studies. The Group is also engaged in discussions with prospective clients in relation to a further four studies and three execution projects. While there is no guarantee that these discussions will result in the
award of the relevant studies and projects, in the Directors' estimation the Group will secure between two and four further projects in the year to March 2009.

Set out below is a summary of the profit estimate for the 14 month period to 31 March 2008 (the ''Profit Estimate'') and the illustrative financial projections for the 12 month period ending on 31 March 2009 (the ''Illustrative Financial Projections'') which appear in Part 6 of this document. The Illustrative Financial Projections have been prepared using, and should be read in conjunction with, the information, including the assumptions, set out in Part 6 of this document and the Risk Factors set out in Part 5 of this document.

Prospective investors are cautioned not to place reliance on the Illustrative Financial Projections in determining whether to subscribe for Common Shares. In particular, due to the relatively early stage of the Group's development, a correspondingly small number of projects (being the ChemWes project and
the two Ezulwini projects) are expected to be responsible for contributing approximately two thirds of the Group's gross profit for the year ending 31 March 2009. However, the Directors expect that such concentration of profit will lessen as the Group continues to grow and diversify its project and client base.

Year end will be March:

14 month year end 31 March 2008:

T/O - $13.9m
PBT- $4.5m

12 month year end 31 March 2009:

T/O - $56.6m
PBT - $21.9m

[cootuk] 12/5/2008 08:58

My only concern is that when they were MDM Ferroman they let down a lot of people when they went insolvent. Given tight project deadlines, I'm wondering how long it will be to regain customer confidence?

[trainspotter] 12/5/2008 07:44

they appear to have a max of another £1bn of further targeted contrats under consideration. Never bought into this type of stock such as PFC, LAM,WSM or KENZ, just my luck. Can't find any financial info. The admission notice claims the IPO doc is to be found on the company website. It isn't there, which is simply pathetic.

It's certaily in the right sector, Mining.

Will wait and gauge interest before deciding on a purchase.

TRAINSPOTTER