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Stock: Seymour White Limited

Stock code: SWL

Share Price: $2.35 (as at close 08/07/11)

P/E Ratio:  15.23  (Sector P/E 12.85)

Market Cap: $180,000,000

Broker Buy Recommendations:

RBS – BUY, target $2.47

Intersuisse – BUY

Investor Centre: Seymour White Limited

Company news: Seymour White Limited

Chart: Share price over the year to 08/07/2011

Seymour White, an infrastructure development company that has projects throughout NSW and Queensland, has been a star performer since it listed at $1.10 in June 2010, rising to an all-time high of $2.68 just seven months later. As can be seen from the chart above, since hitting its high in January the stock has traded sideways – in fact it has traded in a tight 10 cent range for the past 3 months and is at exactly the same level it was seven months ago on January 4th.

While the flooding in Queensland will most likely lead to project delays for SWL, with management expecting a deferral of some revenue from financial year 2012, the company is set to benefit from its position as one of the State’s lead engineering and construction companies. Close ties and existing contracts with the Queensland Government hold it in good stead to win future contracts that should drive profit growth over the coming years. Another big positive is the high level of director ownership of the company, who hold more than 60% of stock. Shareholders can therefore rest assured that decisions will be made to keep the share price heading northwards.

Although it began in Queensland, the company extends beyond the Sunshine State, with major contract wins in NSW as well. Only last month SWL announced the success of its $20m tender for the Victoria Creek project, which is an upgrade of the Princes Highway on the NSW South Coast.


SWL was founded in 1987 by John Seymour and Garry Whyte, and focusses on civil infrastructure in Queensland. Starting in Brisbane with just two employees, the company is now a major player within the infrastructure industry and has more than 180 staff and offices in Brisbane, Townsville, Gold Coast and Sydney.

Through its various divisions the company provides strategic solutions to civil infrastructure projects across transport, resources, water, community infrastructure and building, with projects in Queensland and NSW. SWL’s focus is on the construction of major roadworks, bridges and other concrete structures, traffic management schemes and aquatic facilities.

In Queensland it is involved in the Port of Brisbane Motorway Upgrade, the Gold Coast Rapid Transit/Southport Roadworks and the Isis River bridge Replacemen. Projects in NSW include the Avoca Drive Road Upgrade and the Banora Point Upgrade in Tweed Heads.

The company’s major customers are mostly Government departments in Queensland, including the Queensland Department of Transport and Main Roads, the NSW Roads and Traffic Authority, Brisbane City Council, Townsville City Council, Gold Coast City Council and Queensland Rail.

Financials & Fundamentals

The financials reported for the half year to December 2010 show a decline in revenue and NPAT, although management forecasts that profit for financial year 2011 will be in line with the previous year and expect that profit growth will return in FY2012. 

NPAT for SWL was down 17.1% to $5.07m for the half-year ended 31 December 2010, with revenue at $84.42m, down 15.2%. Net operating cash flow was $10.07m compared to $7.79m last year. The interim dividend declared was 3.5 cents, the same as last year.

Financials for SWL:




 Sales Revenue ($m)


 EBITDA ($m)


 EBIT ($m)


 Reported NPAT ($m)




 Dividend Yield (%)


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 Net Debt/Equity (%)


Link to company Earnings Report: Seymour White Limited Half Year Earnings Report – to December 31st, 2010


As it has only been listed for one year, there aren’t a lot of brokers covering the stock. Two brokers that cover SWL have buys on the stock.

RBS Australia has a buy on SWL with a price target of $2.47, only a 5% premium to the current share price but up significantly from its previous price target of $1.72. It notes that the successful Port of Brisbane tender helps to seal up 68% of FY12 revenue.

Cameron Bell, Intersuisse also has a buy on SWL, saying that it is likely to benefit from increasing spending on civil infrastructure and from work associated with the Queensland floods and cyclones. ‘We expect SWL to generate significant revenue relating to the rebuilding in full-year 2012 and 2013,’ says Bell.


The outlook for the industry, and for SWL in particular, is very strong – ABS statistics show that the total engineering construction activity has more than doubled since 2002 and this is set to continue in NSW and QLD over the next three years, according to the Construction Forecasting Council. It is also projected that road and bridge expenditure – an area of expertise for SWL – will be over $13 billion p.a.

Current contracted work for SWL totals a healthy $400 million, and is due to come in over the next three years. Combined with the healthy outlook for the industry and SWL’s close ties with those with the money to spend on large infrastructure projects – the Government departments – this seems to paint a rosy picture for the future for SWL.



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