CIMIC Group Limited
| ASX code: CIM | www.cimic.com.au | |
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| Share price ($) | 31.12 | |
| 12-month high ($) | 51.67 | |
| 12-month low ($) | 30.36 | |
| Market capitalisation ($mn) | 10052.6 | |
| Price-to-NTA-per-share ratio | 7.8 | |
| 5-year share price return (% p.a.) | 10.3 | |
| Dividend reinvestment plan | No | |
| Sector: Industrials | Company | Sector |
| Price/earnings ratio (times) | 12.9 | 18.3 |
| Dividend yield (%) | 5.0 | 4.1 |
CIMIC, based in Sydney, was founded in 1949, and until 2015 it was named Leighton Holdings. Its new name derives from its main businesses, Construction, Infrastructure, Mining and Concessions. It is one of Australia's largest contractors, with particular strengths in construction, mining, mineral processing, engineering and a wide range of services. Offshore work contributes about a quarter of revenues. Around 72 per cent of the company's shares are owned by German construction company Hochtief, which itself is majority-owned by Spanish construction giant ACS Group.
Latest business results (June 2019, half year)
Profits just edged up in a result that disappointed the market and sent the shares sharply lower. Construction work is responsible for more than half of company turnover, and revenues fell 7 per cent, with profits down 15 per cent. Strength in large-scale transport infrastructure projects in Australia was more than offset by a sharp decline in the Hong Kong construction market. By contrast, the mining and minerals processing business enjoyed an excellent half, with revenues up 16 per cent and profits jumping by 26 per cent. As well as some major work at Australian mines, the company was involved with several mines in Indonesia, and also with significant mine and processing plant projects in Mongolia, the United States, Chile and Botswana. Though representing less than 30 per cent of company revenues, mining and minerals processing contributed more than 40 per cent of profits. CIMIC's third main area of activity is maintenance and servicing work for railways and major engineering and infrastructure projects around Australia, with revenues and profits for this business largely in line with the June 2018 half.
Outlook
CIMIC is a leading participant in the Australian infrastructure construction market, and will benefit as investment increases. During the June 2019 half it received new orders of $8.3 billion and at the end of the period had an order backlog of $36.8 billion, up 6 per cent from a year earlier. For 2020 and beyond it sees a pipeline of some $400 billion in possible new work. It is bidding for major projects that include road and rail infrastructure work around Australia, a copper mine project in Chile and the North–South Corridor expressway in Singapore. CIMIC is known for its strong balance sheet, with more than $1.3 billion in net cash holdings at June 2019. It forecasts a December 2019 after-tax profit of $790 million to $840 million.
| Year to 31 December | 2017 | 2018 |
| Revenues ($mn) | 13 429.5 | 14 670.2 |
| EBIT ($mn) | 1 002.4 | 1 142.6 |
| EBIT margin (%) | 7.5 | 7.8 |
| Profit before tax ($mn) | 959.2 | 1 074.7 |
| Profit after tax ($mn) | 702.1 | 780.6 |
| Earnings per share (c) | 216.53 | 240.74 |
| Cash flow per share (c) | 374.21 | 413.19 |
| Dividend (c) | 135 | 156 |
| Percentage franked | 100 | 100 |
| Interest cover (times) | 23.2 | 16.8 |
| Return on equity (%) | 21.2 | 27.7 |
| Half year to 30 June | 2018 | 2019 |
| Revenues ($mn) | 6 937.4 | 6 955.1 |
| Profit before tax ($mn) | 503.0 | 503.6 |
| Profit after tax ($mn) | 363.0 | 366.7 |
| Earnings per share (c) | 111.90 | 113.10 |
| Dividend (c) | 70 | 71 |
| Percentage franked | 100 | 100 |
| Net tangible assets per share ($) | 3.11 | 4.00 |
| Debt-to-equity ratio (%) | ~ | ~ |
| Current ratio | 0.9 | 0.9 |