Great line of thinking @pubenvelope!!!!

I haven't done too much research yet about these sort of questions yet but was thinking yesterday in their interview that a company like FOS Capital could potentially do well out of the Olympics and creating custom lighting solutions or providing last minute supply for the various new buildings being constructed.

I did try to look at DCG and SKI but didn't get too far as they are no longer listed on the ASX and its well past my bed time. Seems like they have now merged into McMahons (MAX.ASX) and KK*&R (KKR.NYSE) respectively.

Ill have a further think and do some more research, and will post any other companies over the coming weeks.

Hi @pubenvelope

the two companies that I follow that might fit the bill are GNP and FLX.

I own both but in differing levels of exposure.

GNP is betting big on the new energy infrastructure upgrade and is so far executing well. They also have a telecommunications infrastructure arm.

Im not sure how much of this type of stuff the Olympics would add to the current Government plans, but would now doubt be incremental.

FLX I have posted about previously. It could be a massive beneficiary. I’m at work and on my phone so can’t re-hash the whole story, but they provide a SaaS platform for accreditation, procurement and work-flow of infrastructure projects. They also happen to be Brisbane based. They are starting to gain traction with major contractors (eg Downer) but have a long way to go. They are not profitable, and haven’t got much in cash reserves. However they are in the perfect position to benefit if they can win some of that work.

c

I'm pretty sceptical of the touted economic benefits of the Olympics. Not that they may not be worth doing for other reasons, but the returns usually fall well short of what planners expect.

London ran significantly over budget, and the long-term economic impact has been mixed (at best). Rio faced severe economic challenges both before and after the Games, with many facilities falling into disrepair and the city struggling with debt. Even Sydney, which is considered one of the more successful events, ran way over budget and the ROI from the substantial public expenditure is considered marginal.

Anyway, some stocks to consider @pubenvelope would be the listed construction companies (LLC & DOW), but also things like EVT and CWN in terms of hospitality. Always hard to know how much is priced in, and because it's a one-off sugar hit how much it really shifts the total value of all future cash flows..

Boral was only delisted because Seven Group Holdings (SVW.asx, run and controlled by Ryan Stokes and his father Kerry) acquired them @pubenvelope and I doubt that SVW are going to benefit too much from the Brisbane Olympics build. They do own WesTrac, who are the Cat earthmoving equipment distributors in WA, NSW & the ACT, but not in Queensland who have Hastings Deering, owned by Sime Darby Berhad (listed in Malaysia), and controlled by Permodalan Nasional Berhad (or PNB) which apparently runs the world's largest unit trust scheme, and manages investments which make up about 10-15 per cent of the Kuala Lumpur Stock Exchange (Bursa Malaysia). So not really an investment option.

Perhaps wait and see who gets awarded construction contacts over the next few years, but remember that not all contracts are highly profitable, some end up losing money, and the Queensland Government is likely to have a very competitive bidding process to try to minimise costs knowing that the costs usually blow out substantially anyway.

I used to think like you have described, such as buying into Downer (DOW) a few years back when I thought Australia was about to embark on a significant infrastructure build-out nationally - which did not happen - this is going right back to Kevin Rudd (Kevin 07) who at one point said he was going to be the infrastructure Prime Minister, but it rarely works out well, because the ultimate beneficiaries of these large construction projects are so hard to determine, and then once you know who is building what, you still often can't really get a good feel for whether they are making money or losing money on the project.

Plenty of large constructors have lost money on large projects, including Downer (Waratah Trains, i.e. Sydney rail network), Cimic (formerly Leighton Holdings) and UGL - who were acquired later by Cimic, then Cimic got bought out by their long-time major shareholder Hochtief who are based in Germany and majority controlled by ACS, a Spanish company. Most of the large construction companies operating in Australia are not listed on the ASX as they are either foreign-exchange-listed, or family/privately-owned (not stock-exchange listed).

Here's a list of Australia's top 10 in terms of size: https://www.blackridgeresearch.com/blog/list-of-largest-top-construction-epc-companies-contractors-in-australia-oceania

I don't know how current that list is by the way but they all operated in Australia at the time the list was compiled.

Edit: Apparently it was last updated in January this year. Number 10 is BMD, who are based in Brisbane but are a private company - so not on the ASX.

Depending on the infrastructure needed, its likely that Australian engineering, planning and advisory companies (especially those with an office footprint in Queensland) could be the beneficiaries of any works associated with the Olympics. A shortage of these resources will allow the providers to increase their rates to meet the local demand. From a procurement perspective, these sort of companies could be engaged to help the government design the preliminary plans and concepts for any proposed infrastructure (road, rail, villages, stadium, etc) that are handed over to the construction companies to deliver. There may also be some post delivery support optionality built in by the government to retain capability in house to for advice on construction outcomes proposed by the construction companies.

The thesis above could however be partially busted if they pursue a design and delivery construction partner from start to finish of such works. A design and delivery construction partner will likely result in consortia being formed (as the scale of works is so diverse in nature), and would some element of the above mentioned companies as a member.

From a delivery perspective, steel and other critical component producers could also be the beneficiaries of the Olympics as they can leverage off of supply chain shortages or tight delivery timeframes to negotiate higher short term product pricing.

I'm not familiar enough with the market to the listed companies that would meet these categories, but some food for thought either way.

Good points @SudMav - Also, just to add to my earlier post: UGL, Downer and CIMIC have all, at various times, had class actions brought against them by disgruntled shareholders for failing to adequately keep the market informed when they (the companies) knew there were significant cost blowouts on large projects but failed to inform the market in a timely manner, which resulted in very large share price falls when the news finally did emerge and the extent of the losses were realised by the market. I was part of one of the UGL class actions and we did get a payout. UGL had at least two class actions over similar issues but different projects. The crux of the claims were that people were buying shares in these companies without information that the companies SHOULD have already disclosed before the dates that those shares were purchased - so failing to adhere to the very basic ASX listing rule of continuous disclosure of all matters that a reasonable person would expect to impact the share price. So, because of their poor track record of disclosure of bad news, I tend to avoid Downer (DOW) now - the other two are no longer listed on the ASX anyway.

LendLease (LLC) might be worth a look, they've recently had a run-up from below $5.40 in June to close at $7.10 today, so they're heading in the right direction - it's not a company I know much about but they're big enough - m/cap of $4.9 Billion. Haven't heard much about them myself, good or bad, but they are a player in that space.

Not so sure Lend Lease is a company of like to pin my hopes on @Bear77 . They were forced to close their OS business after big stuff ups in UK & USA on projects such as Wembley stadium.

Locally they also were hugely over budget and time on the Kingsford Smith Drive (kSD) upgrade project for the Brisbane City Council on the north side bank of the Brisbane River.

A few bad projects don't necessarily make a bad company (e.g. they actually to new estate URD to a reasonable level).but I'm not a fan of their large project track record.

It's definitely a good topic you raise @pubenvelope and the procrastination won't cease until some time after the State election next month and even longer than that if, as expected by everyone, the LNP gain power. They've asked for a 100 day consultation period before even announcing preferred sites and solutions, so there's plenty of time to work on a list of potential (possible) winners to back up to 2032.

Like @Strawman I'm also somewhat sceptical of the loosely defined benefits to us as tax and rate payers, although i think the Goldie Comm Games seemed to get across the line in this regard due to reuse of a lot of existing facilities and/or a reuse plan for new structures such as the games village that became student accommodation after the games finished. So if done with an end goal in mind and a fiscally sound team, it is possible to not create a massive "white elephant".

In regards to how it would likely be done successfully in a tight time frame, i think you're thinking in the right direction @SudMav , although my guess would be a PPP type design/construct team consisting of multiple consortium players from large private/publicly listed companies and the State and local council/s. At least that way (if structed correctly) all parties share in any benefits and/or lessen the burden by sharing any losses.

Good to know @lowway - I'll add LLC to my blacklist also.

LLC also has accusations on reducing and damaging koala habitat at one of their developments.

The bad press made AEF sell out their stake.