 |
Recommendation: Accumulate |
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Note: Marker indicates price at previous close |
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INVESTMENT RATING (Last update: 01/05/2008)
UGL is a diversified group providing specialised engineering and maintenance and facilities management services in the areas of water, power, rail and other essential infrastructure. It also has a rapidly expanding, global, tenant-focused property services division. Management has lowered the earnings risk profile through diversification and building the proportion of long-term and recurring maintenance style work. Financial management is sound with cash flow strong, and moderate gearing levels. There are few barriers to entry to UGL’s businesses other than scale and brand. While cyclicality has been reduced, the resource boom is lifting earnings. UGL is well positioned to benefit from ongoing strength in the resources sector and from high levels of domestic infrastructure spend. Domestic labour shortages are likely to constrain growth in the future.
|
Previous Close |
52 week High |
52 Week Low |
|
$12.800 |
$21.870 |
$10.750 |
| Sector |
Capital Goods |
| Market Cap |
$2,100 Million |
|
|
Total Shareholder Return (avg annual rate) |
|
| 1yr |
3yr |
5yr |
10yr |
-28.7% |
15.4% |
38.4% |
20.9% |
|
|
Intrinsic Valuation |
|
$14.00 |
| Moat Rating |
None |
| Business Risk |
Medium |
| Pricing Risk |
Medium |
| Company Beta |
1.03 |
| Sector Beta |
1.13 |
|
|
Year |
6/06A |
6/07A |
6/08E |
6/09E |
|
| NPAT ($m) |
78.7 |
110.8 |
140.0 |
165.2 |
| EPS (c) |
62.2 |
79.3 |
84.8 |
98.9 |
| % Change |
35.5 |
27.5 |
6.9 |
16.6 |
| DPS (c) |
44.0 |
48.0 |
54.0 |
63.0 |
| Franking (%) |
100.0 |
100.0 |
100.0 |
100.0 |
| Yield (%) |
3.8 |
3.4 |
4.5 |
5.2 |
| PER (x) |
19.4 |
15.2 |
14.2 |
12.2 |
Source: Aspect Huntley analyst estimates |
|
|
Index Participation |
|
Price Chart |
|
Index Name |
Weight |
|
S&P/ASX 100 |
0.21% |
All Ordinaries |
0.16% |
S&P/ASX MIDCAP 50 |
1.53% |
S&P/ASX MIDCAP 50 INDUSTRIALS |
2.13% |
S&P/ASX 100 INDUSTRIALS |
0.32% |
S&P/ASX 200 INDUSTRIAL |
0.30% |
S&P/ASX 300 INDUSTRIALS |
0.29% |
S&P/ASX 200 |
0.20% |
S&P/ASX 300 |
0.19% |
S&P/ASX 200 CAPITAL GOODS (INDUSTRY GROUP) |
9.44% |
S&P/ASX 300 CAPITAL GOODS (INDUSTRY GROUP) |
8.83% |
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Business Description
United Group Limited is a diversified service group operating in mechanical & electrical engineering, fabrication, maintenance and construction, facilities management, and real estate services and business process outsourcing. The Company has operations in Australia, New Zealand, South-East Asia, North America and Europe.
Aspect Huntley – 04072008
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