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Nomad Building Solutions Limited (NOD) shares slumped 44% Monday morning after the modular building manufacturer downgraded its FY10 guidance from a profit of $10 – $12 million to a $2 million loss. The company said it had been negatively impacted by a failure to secure the anticipated level of work, additional costs and continuing pressure on margins.

Nomad said it has continued to suffer from difficulties in closing out the last of the modular building supply and install contracts for resource project camps it won in the previous economic boom.

“Poor systems and management have resulted in past installation contracts proving to be financially problematic for Nomad, but the last of these contracts is now reaching practical completion,” the company said.

Nomad has forecast a loss for the six months ending 31 December 2009 of about $5 million on revenue of approximately $100 million.

”The $4 million reduction in the net result for the first half of FY10 compared with the October guidance arises from recognising additional costs to complete the modular building install projects in the Rapley Wilkinson division,” the company said.

Nomad said it had initiated discussion with its bank regarding the revised outlook despite its cash flow forecasts indicating it would remain within its available facility limits.

The company added that delays in clients awarding new work has deferred the timing of forecast revenue and earnings in all of Nomad’s trading divisions.

“Nomad has also been unsuccessful in a competitive environment to win a number of contracts that were factored into Nomad’s October 2009 forecast,” the company said.

”As a consequence, work levels are now expected to be lower in the second half of FY10 than were previously anticipated.”

Nomad said it intends to make a further announcement on Wednesday, 13 January 2010 following a Board Meeting to be held on 12 January regarding the actions required to address areas of unsatisfactory performance.

As at 1055 AEDT, Nomad shares were down 29.5c to 41c.

Mirrabooka Investments Limited (MIR) has reported a post-tax profit of $4 million for the six months to 31 December 2009, down 27% from the previous corresponding period. The investment company said the result was due to the lower dividends over the six months as company’s emerge from the global financial crisis. Revenue from operating activities (excluding capital gains on investments) was $3.9 million, down 36%.

Bauxite Resources Limited (BAU) announced that it has signed a Heads of Agreement with Yankuang Corporation for the joint development and ownership of an alumina refinery in the south west of Western Australia. Under the terms of the agreement, Bauxite said Yankuang would subscribe for an equity stake in BAU and be able to explore and exploit the Australian company’s tenements in the Darling Range.

The company said that under the proposed JV agreement, Yankuang would contribute 75% of the costs of the proposed alumina refinery to earn a 50% interest, while Bauxite would receive a 25% free carried interest and would fund a further 25% to bring its interest up to 50%.

Bauxite said, subject to shareholder and regulatory approval in both China and Australia, Yankuang would subscribe for 19.7 million shares in BAU at 50c each.

The company said the Foreign Investment Review Board has already granted its approval for the share placement and 50/50 alumina joint venture.

Bauxite Resources managing director, Daniel Tenardi, said the proposed JV is a significant value adding project.

“BRL and Yankuang will now proceed with the detailed engineering studies, environmental and regulatory approvals and resource evaluations necessary to bring to fruition a modern, world class, socially and environmentally responsible, low cost alumina producer,” Mr Tenardi said.  

As at 1016 AEDT, Bauxite Resources shares were up 2.5c to $1.06.

Santos said that GLNG, its natural gas joint venture with Malaysian giant Petronas, had extended the deadline for agreement of the sale of an extra 1 million tonnes per annum of gas from the project by Petronas. GLNG said the extension was due to discussions with a number of Asian buyers about the sales from the project.

”These discussions include the potential for buyers to purchase an equity stake in GLNG from Santos," the company said in a statement.

Santos said the binding heads of agreement for the sale of 1 million tonnes per annum by Petronas, announced in June last year, underpinned the volumes for the first train, while the final investment decision would now be due in mid-2010.

At the open Monday, Santos shares were up 7c to $14.36.

Auckland International Airport Limited (AIA) has agreed to purchase a 24.55% stake in North Queensland Airports (“NQA”) for $132.8 million from Westpac Banking Corporation (WBC). The company said the acquisition of the Cairns and Mackay airports operator was part of its strategy to grow beyond its core business in Auckland.

AIA chairman, Tony Frankham, said it gave the company new opportunities to strengthen and grow air services connections with Cairns as a stepping-stone between New Zealand and Asia.

The company said Cairns Airport is Australia’s seventh busiest airport, with approximately 3.7 million passengers in FY09, while Mackay airport was a regional domestic airport with nearly 1 million passengers in the same period.

CEO Simon Moutter said the company had looked at a range of opportunities to drive synergies and volume for its core business and recognised that its most important value driver is growth in international passenger volumes.

“We believe that Asian tourism markets offer the greatest opportunity for volume growth and that one of the keys to growing Asian traffic is improved air services connections,” Mr Moutter said.

”Driving more travel demand out of Asia will be crucial to the future growth of both Auckland Airport and the New Zealand tourism sector."

He added that the company’s primary focus remains direct Asian connections with Auckland.

“Cairns Airport fits the bill in terms of its location, scale, focus on Asian tourism, and market diversification opportunities,” Mr Moutter said.

”Mackay offers additional diversified exposure to the booming Australian resources sector.”

Mr Moutter said the investment was modest at around 5% as a proportion of Auckland Airport’s total assets.

Auckland Airport said it believes the proposed deal to be strongly value accretive, offering an equity return on investment in the mid teens percentages.

”It will initially be financed from existing debt facilities,” the company said.

”Subsequently, the funding strategy is likely to involve a mixture of debt and equity consistent with Auckland Airport’s current capital structure.”

The company said the proposed purchase, which is due to settle on 13 January, remains conditional on NQA obtaining the consent of its financiers to the proposed transaction prior to that date.

Auckland Airport said it would become the only airport operator shareholder in NQA.

At the close of trade Friday, Auckland Airport shares were trading at $1.65, while Westpac shares were trading at $25.15.

Substantial Shareholder Changes 
08 January 10

All movements are percentage changes.

Ramsay Health Care (RHC) has made a foray into the French healthcare sector, taking a 57% stake in private hospital operator Groupe Proclif SAS for $142 million, the group said Monday. Ramsay said it expected the purchase to deliver a small accretion to core EPS by FY12.

The Aussie healthcare provider said the stake in Proclif, which operates nine hospitals and 1,000 beds around Paris, was an ideal entry point into the French acute care market.

”The French system is a popular and stable system with important social security funding for both public and private operators providing patients with free choice,” Ramsay managing director Chris Rex said.

”Growth is driven by an ageing demographic, together with opportunities for further consolidation.”

Ramsay said the group would continue to push into the French market, using this acquisition as a platform for further investment in the country.

Ramsay also noted its joint venture partner, Predica, had considerable experience investing in the French healthcare sector.

At the close Friday, Ramsay Healthcare shares were trading at $11.07 each.

RBS – Round Up – 110110