FY19 was transformational and successful for the rebranded Perenti (formerly Ausdrill). ASL delivered results ahead of expectations, and management has demonstrated a clear focus on capital discipline, shareholder returns, and growth. The results endorsed the Barminco acquisition, with the combined group having won more than $3.4b work since June 2018. This has bumped up work in hand to an impressive $7.0b, before any potential conversion of an $8.5b pipeline targeted over the coming two years. Margins improved with the addition of the underground business, and we see guidance of ~$140m FY20 NPAT(A) as achievable. Management starts this year with a clean slate and clear strategic direction. We maintain a BUY call on a revised $2.40 valuation (prior $2.10).
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