Logicamms

By Dan Stratful (AFA)

Friday 6th July 2012

Logicamms (ASX: LCM) has shown some good results since listing in 2007 with strong growth in revenues (from $31 million to $98 million) and its net asset position (from $10 million to $62 million) due to a series of mergers over the period.

The year ending 30 June 2011 (FY11) did show a dip in profits to $4.6 million from $5.6 million in FY10 and the market disapproved of the stall in profits and sold off the shares from $1.70 down to 70 cents. However LCM has since recovered after a buoyant first half result for the six months ending 31 December 2011 (1H).

1H net profit was up 11% at $4.7 million which was better than the entire FY11 profit result, and LCM looks set for a higher full year result in FY12. The 1H result saw robust demand for LCM's services and the company increased personnel numbers by 28% from 350 to 447 to accommodate the growth.

A record 1H dividend of 3.5 cents per share was paid due to LCM's confidence in its outlook and strong capital position, while it also initiated an on-market share buy-back program which is expected to be earnings per share (EPS) accretive in FY12.

LCM expects its key markets to remain strong and the pipeline of opportunities available to it continues to grow with the medium to long term prospects remaining positive.

Recent contract wins include a contract with Stanwell Corporation to upgrade the Control System of the Coal Handling Preparation Plant (CHPP) at the Meandu mine in south east Queensland. The contract has an estimated value of $8.5 million with work commencing immediately and continuing for approximately 18 months.

With a market cap of $73 million, Broker target prices on LCM sit at around $1.65 per share. Brokers' forecast an FY12 EPS of 13c and EPS of 15c in FY13, which leaves LCM trading at PE ratios of 8.3x and 7.2x respectively.

About Logicamms:
LCM provides engineering, project delivery and asset management services to clients in the Mining and Minerals, Hydrocarbons, Infrastructure and Specialist industries. The company provides full project lifecycle solutions from conceptual design through to operations and ongoing asset management and support services and clients include Origin Energy, Rio Tinto, Santos, Woodside Petroleum and Chevron. Listing on the ASX in 2007 at $1 per share, LCM is headquartered in Perth with regional offices throughout Australia.

Status: GROWTH BUY

LCM's shares today traded at $1.08

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Logicamms

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