ferret's stock to watch: transfield services ltd

Ferret's Stock to Watch: TRANSFIELD SERVICES LIMITED
09:10, Wednesday, 20 April 2005

FAMILY COMPANY NAME IS STILL POWERING ALONG VERY MUCH ALIVE

Sydney - Wednesday - April 20: (RWE Australian Business News)
*************************************************************

OVERVIEW
********

When family falls out you never know what's going to happen next.

The building and construction part of Transfield (TSE) was sold
off to Wal King of Leighton Holdings, through its subsidiary John
Holland, for an indicated $49.8 million, while the balance was formed
into what is now a successful public company called Transfield Services.

Ironically, the name of the original Transfield group has not
been lost because there are two Belgiorno-Nettis directors on the board
of the public company, Luca and Guido.

Also the family owned Transfield Holdings holds a 30 per cent
stake in Transfield Services Ltd.

Transfield shares have come back a bit in the current correction
and that might provide a time of opportunity for investors.

But the company is still powering along and has made strong
strides in its business as a services and infrastructure operation.

There has been solid growth from core services business during
first half, expansion of infrastructure assets, introduction of
Transfield Services E&T and Broadspectrum, and five building blocks which
provide multiple platforms of growth.

Transfield Services has more than 10,900 employees and has a
turnover on an annualised basis approaching $1.6 billion.

The company has activities in Australia, New Zealand, South
East-Asia and the Gulf region.

The Transfield board focuses on five company priorities:

* PEOPLE are the excellence benchmark - the company's greatest
asset.

* RISK & HSE MANAGEMENT - No worker has ever been injured.

* CONTRACT/RELATIONSHIP RETENTION - Value add to existing
clients.

* GROWTH - Winning new business.

* FINANCIAL PERFORMANCE - Recommendation and financial return
means that Transfield has succeeded.

It looks pretty good for the full year if the interim half year
is an indication, with profit after tax (excluding unusual tax effects)
up 20.8 per cent at $217.3 million.

There was a strong performance from JVs and Services
business in the first half.

Underlying revenue growth was 15 per cent while EBITA growth came
out at 27.3 per cent.

Positive contributions were made during the first half of the
year from all segments of the business.

Joint ventures and associates performed strongly, increasing by
97 per cent over the prior comparable period, due to contributions from
Yarra Trams, Brisbane Ferries and TGE Energy Services.

Services work in-hand at December 31 exceeded $4.1 billion based
conservatively only on existing contract terms, up from $3.4 billion a
year earlier.

SHARE PRICE MOVEMENTS
*********************

Shares of Transfield fell 12c to $6.79 yesterday. Rolling high
for the year has been $7.60 and low $4.45. Dividend is 18c a share to
yield 2.68 per cent. Interim dividend rose 28.6 per cent to 9c from 7c
previously, pointing to at least an 18c payout for the year.

Since listing in 2001, acquisitions have increased 20 per cent,
existing operations are up 45 per cent and value added and organic growth
has risen 35 per cent.

Long-term contracts in the same period climbed from $3 billion to
$6.1 billion.

Value of infrastructure of $100 million is now $300 million.

Power generating capacity has surged from 250MW to 690MW.

The conversion and expansion of the Townsville Power Station in
February will have a positive impact in the second half of the current
financial year.

Development of Kemerton Power Station remains on-time and
on-budget, with completion scheduled for October 2005.

Water assets have made a positive contribution to earnings and
cashflow.

The value of power purchase agreements reached $2 billion by
December 31.

The Townsville Power Station highlights a broad range of skills
and on-going opportunities for expansion in north Queensland.

Further potential is value-added through Broadspectrum and
Transfield Services E&T.

Major contributors to growth are new contracts as well as
additional work with existing clients, including:

* The Mitcham-Frankston Tollroad;

* RasGas, Qatar - $110 million over five years;

* JV with Worley and TRAGS-ADI Frigate Upgrade Service - $20
million over two years;

* Collie Power Station - $80 million contract;

* JV with Burns Roe Worley-Sydney Water - $125 million over four
years;

* New Zealand Housing - $NZ12.5 million over three years.

TSE has significant tenders for new work and should soon announce
further business.

Consistent with guidance at last year's full-year results
announcement, Transfield has taken advantage of market consolidation
which has resulted in three quality acquisitions.

AREVA-Broadspectrum-Kwinana - the on-going investment in
infrastructure assets will contribute positively to earnings in the
second half of 04/05 and for the full year 05/06

The Townsville Power Station expansion (160MW to 220MW) was
completed in February.

The acquisition of 30 per cent of Kwinana was finalised at the
end of February.

The Kemerton Power Station is due to be completed in October and
is currently on time and on budget.

The company has established a dedicated M&A team to support
business units with pipeline of opportunities.

Capital raising will provide opportunities for further expansion.

BACKGROUND
**********

Transfield Services is a leading provider of operations,
maintenance and asset management services.

Operations result from more than 110 contracts across 11 diverse
industries.

The company was listed on the Australian Stock Exchange on May 3,
2001.

Clients of Transfield Services include major national and
international companies, as well as all levels of government.

Transfield Services operates across a number of industries
including mining and process, hydrocarbons, roads, rail and public
transport, utilities, facilities management, defence, telecommunications
and power.

The company has long been considered a pioneer in the provision
of operations and maintenance services. Its experience and expertise has
resulted in a company that is structured to meet the specific needs of
its clients.

Transfield has the ability to provide specialist services to a
range of industries.

The company is in the enviable position of being able to further
expand its horizons as a leading provider of performance-based
outsourcing solutions, with a solid network of specialists in the
communities in which it operates.

ENDS

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I don't hold TSE