profit on $285 mill off work, page-8

Sydney 6791

I commend your efforts to try and look behind the numbers .

I don't think we have enough information to draw a firm conclusion .

a) You quote 1400 employees . Do you happen to know that these are all full time employees of the company . Are you sure that a large chunk of these are not contractors ? If there are a significant number of contractors they can be released if there is no work .

b) Disclosed awarded work announced and dates are:

2/6/10 -Vale -$20 m over two years
3/6/10 -Young to Wagga wagga pipeline - no $s quoted
12/7/10-Dendrobium -$10 m over 2 years
6/10/10-Innisfail sewer -$30 mill shared in JV
26/10/10-Oaky creek -$100 over 3 years
9/11/10-Various -$42 m

All the above over 5 months - but some phased over a number of accounting periods . Nevertheless , quite a positive hit rate .

c) Per open brief on 22/11/10- $285 m work in hand excluding work done from July to Oct .

d) Profitable YTD so far .

I don't know how you can arrive at your conclusions($100 m new contracts over 11 months not enough to sustain wages of 1400 people) when you have such little knowledge , and when the information that has been disclosed above is quite positive . Also , contracts by their nature are lumpy so it is not fair to take a run rate and extrapolate - not that I understand where your numbers come from in the first place .

What is most important is the size of the order book and when those orders are to be fulfilled . They say their outstanding order book is $285 m but don't specify when that work will be done .

Can't do the math cos I haven't got the necessary info .