Swick Mining Services (SWK)

**tommy** · 29-03-2007, 02:57 PM

I have started to dip my toes again into the cheapo sharemarket but have been terrible with "timing"... so at the moment quite a few are on my watchlist but still have not yet purchased.

One of them in the research stage is Swick Mining Services (SWK) listed in November, which has doubled in shareprice since due to the impressive half-year results beating forecasts and ensuing profit upgrade.

Website:
http://www.swickmining.com.au/

"The Swick Group was founded in 1960 and primarily as a water drilling contractor.

During its 46 years of operation, the company has significantly expanded its operations to include both surface and underground drilling and is now recognised as one of the most efficient and cost effective operations in the Australian Mining Industry.
Corporate Structure

Swick Mining Services Ltd is the ASX listed parent company of the group (ASX Code: SWK). This parent company owns 100% of both the operations entity SMS Operations Pty Ltd and the asset holdings entity SMS Asset Holdings Pty Ltd which owns all of our drill rigs and equipment.

SMS Operations Pty Ltd is divided into two distinct operational areas comprising of our Underground Drilling
and Surface Drilling divisions.

The Underground Drilling Division contains our Underground Diamond Drilling and Underground Long-HoleDrilling Departments.

The Surface Drilling Division contains our Surface Reverse Circulation (RC) Drilling and Surface Vacuum (Air-Vac) Drilling Departments and also manages our equipment support services (Rig Dry Hire)."

Important data:
* Net profit after tax of $2,632,455; 41.9% above forecast
* Underground diamond division performing strongly & growing
* New surface diamond drilling division established
* Positive outlook for H2 FY07; full year FY07 profit upgraded
Current net debt to equity ratio of 79%
* Capital raised has been largely invested in manufacturing new rigs
* Strategy has generated a high ROI and captured additional growth
* High interest cover at 5.94
* Facilities of up to $10m being finalised to support rig build program
* Intention to raise equity capital

Presentation:
http://www.swickmining.com.au/pdf/00...07%20FINAL.pdf

Half-year results:
http://www.swickmining.com.au/pdf/00...20Feb%2007.pdf

**corky** · 29-03-2007, 03:30 PM

Tommy

Been holding this one for a while and looks like there's more to come. Half year NPAT was $2.63m, full year forecast is $4.095m so you could say that looks achievable! I emailed the co to ask whether there were seasonality impacts or maybe higher investment but no response

Corky

**tommy** · 29-03-2007, 03:40 PM

Well done for holding corky mate,

I missed out on the spike because I was focused more on general market sentiment... I was hoping SWK would fall too but it never did, it just kept rising[xx(]

Only concern I have is the high level of debt and the management's intention to raise equity capital which has not been clarified yet (method, timing, etc.)

Worth keeping an eye on this company IMHO.

**tommy** · 02-04-2007, 03:38 PM

WTF, up 16%[:0]

Completely missed out on this one while my money was put into TRF...hope you are having a ball corky mate!

**corky** · 17-04-2007, 12:49 PM

Now up over $1 on the Newmont contract news!! Heady heights, not sure if these levels can be maintained but a nice ride. Dont think you need to worry about missing this boat Tommy, you must be on a few other good cruises.

Corky

**tommy** · 17-04-2007, 04:43 PM

Hi Corky,

Well done for holding on to this one, this is a huge contract win for SWK

I was actually juggling between buying into SWK or CXG last week and ended up buying CXG... damn, should have bought both[xx(]

**tommy** · 07-05-2007, 05:49 PM

SWK share price holding well even after 20 million placement announcement

http://bigcharts.marketwatch.com/int...w.x=0&draw.y=0

Was expecting a bit of a pull back but hasn't happened!