Duratec Limited

ASX:DUR

Duratec Limited

ASX:DUR
TradeAdd trade order Follow Unfollow Set Price Alert
$1.510 (-2.6%)
Last close price
#47
Rank
10
Held by
27
Followers
TradeAdd trade order Follow Unfollow Set Price Alert
Reports (5) My Report Forum Investors
Forum Topics DUR DUR Significant Contract Wins

Pinned straw:
Rick
Added 3 months ago

Duratec has just won two significant contracts. One in its own right and the other through its 49% owned business, DDR Australia. The DDR Australia project which is with the Department of Defence is the largest project ever awarded to DDR. To get these contract wins in perspective, the Duratec component represents about 12% of the order book and 9% of the revenue reported for FY24. That’s a decent win!

Held IRL (2.9%)

ASX Announcement

Highlights

  • Duratec secures $21.8m Energy sector project for the King Bay Supply Base (KBSB) Wharf Refurbishment, its first direct contract with Woodside Energy Ltd (Woodside)
  • DDR secures $54.7m contract forming part of the Project Phoenix portfolio of work for Department of Defence (Defence) in the Northern Territory (NT)

Duratec Limited (ASX: DUR) and DDR Australia (DDR), Duratec’s 49% owned associate business, have been awarded two new significant contracts across the Energy and Defence sectors. Duratec has secured the KBSB Wharf Refurbishment Project on behalf of Woodside, while DDR has been awarded a contract with Defence to deliver a critical portfolio of work across the NT as part of the Project Phoenix portfolio of work.

• KBSB Wharf Refurbishment – Located within the Port of Dampier in Western Australia, the KBSB Project is a $21.8 million Onshore Services Contract with Woodside, that aims to extend the service life, maintain the operational efficiency, and enhance the safety and resilience of the existing wharf facility. Pre-work is anticipated to start in November 2024, with commencement on site scheduled for February 2025, and expected completion by end of 2025.

• DDR Defence Contract Award – At an overall contract value of $54.7 million, this is the largest contract awarded to DDR to date. The project’s key objectives within the portfolio of work includes, refurbishment of existing buildings, upgrade of engineering services at transmit and receive sites, construction of a new receive site, installation of new fibre optic link cables connecting transmit and receive sites, and decommissioning of high-frequency communications infrastructure. Early civil works are targeted to commence in October 2024.

The combined duration of the current works is anticipated to be 30 months. This opportunity will be delivered with regional delivery partners ensuring that local businesses benefit from the contracted works.
Karmast
Added 2 months ago

Good, quick business update on this podcast. 

Chris took over the role 12 months ago and was a bit stumbly in his first couple of public presentations but I think he's getting the hang of communicating as a new CEO now.

https://podcasts.apple.com/au/podcast/duratec-turbocharged-for-fy25-and-beyond/id1691651683?i=1000672459937


18
mikebrisy
Added 2 months ago

@Karmast Thanks for sharing.

One fact I picked up was the reference to “900 jobs of <$200k” at one point. Relevance being this is a component of revenue that turns over quickly.

So with this and 25% MSA (not included in order book) I understand why Chris says they are not so focused on the order book KPI compared with the market. Makes sense.

I find It's always worth listening to when CEOs of smaller caps speak. You can get little nuggets like this that help build out understanding.

Disc: Held in RL and SM

19
Karmast
Added 2 months ago

Yes agreed @mikebrisy and also that they had built the team/expenses to support $600 million plus in revenue already so don't need to add much right now.

Also pleasing to see this morning announcements of a $44 million contract win with Rio in the Pilbara...

15
Shapeshifter
Added 2 months ago

Thanks @Karmast

I'm really happy to hold this quality engineering/remediation company that has grown to be the biggest stock in my IRL portfolio.

Chris obviously knows the company really well. They have a clear pathway for ongoing growth especially with WPF, ECI and their 3d modelling services all of which is higher margin work.

Duratec's edge in a competitive industry is they output high quality engineering work after careful project selection. Another example of founder led management making excellent decisions.

Their 5 year EBITDA CAGR growth of 19.4% puts them in the top 14% for sector performance (where the average is 6.3% EBITDA CAGR growth)

Can Duratec continue this excellent growth? Looks like it for now.

18
Shapeshifter
Added 2 months ago

What I particularly like about this contract win is that management had signaled that their MEnD consulting and ECI were leading to more work in what is a relatively under penetrated sector for Duratec.


Here is the proof.

12
Karmast
Added 2 months ago

It’s very likely to be confirmation bias but I couldn’t agree with you more @Shapeshifter !!!

6
Karmast
Added 3 months ago

Thanks @Rick Good to see some of the tenders converting to orders and particularly good to see DDR delivering some firm orders. That said these amount to just over 10% of expected revenue for the coming year, so it's not overly material and doesn't change my expectations or valuation.

15
mikebrisy
Added 3 months ago

@Rick @Karmast Agreed. Good news. Not particularly material. In-line with thesis and current valuation.

Nice also to see the 2.5 year length of the DDR contract. In terms of revenue, some nice multi-year contracts layering on top of MSA's should improve earnings stability and aid workforce planning/talent retention.

Disc: Held RL (4.5%) and SM

13