Finance News - StockWatch reco, page-10

I think ASB is highly likely to win the OPV contract at about $3b, already has the $300 mill PPB contract and will be about a 50/50 for the further 12 LCS/FF's. It might also pick up another 6-8 EFP's at about $120 mill a pop.

Using 5% margin we are looking at about $165 mill NPAT for its Australian operations over the next 6-8 or so years, plus, assuming the Govt. honours its continuous build strategy, future builds after that.

The big payoff will be if ASB wins the maintenance contracts. One of the brokers think that about 10% of purchase price is a reasonable assumption for annual maintenance costs and slightly higher margins of say 8-10%. So on the OPV we would be looking at $300 mill revenue and about $30 mill profit. Extend that to the US and it looks like ASB could generate at least the same NPAT so say $60 mill minimum. At a PE of 12 I think this should be about a $750 mill company without winning another ship build.

Very much back of envelope so please feel free to provide your comments on my numbers.