macquarie target price $14.11 with 7% ff divy

Link to latest research note here:-
http://www.macquarie.com.au/dafiles/Internet/mgl/au/apps/retail-newsletter/docs/2012_07/FWD060712e.pdf

? In the manufactured accommodation division, tender activity continues at a very high level and Searipple occupancy is expected to remain at high levels into FY13. The recent BHP win and a solid BRB performance are also helping earnings. We expect EBIT to grow 47% to $73.3m in FY12.

? BRB is managing to offset the impact of wind down of the BER program by supplementing its workload with other public sector jobs. BRB is also being used as a base to enter the Queensland resource market.

? The caravan division is expected to partially offset manufactured accommodation growth with EBIT expected to fall 57% to $7.7m. Demand for caravans had stabilised post GFC, allowing Fleetwood to increase caravan production but this has since fallen away again.

? Gladstone a key medium-term opportunity. Fleetwood has three key exposures: Retirement, Recreation and Resources. These three sectors appear set for medium- to long-term growth.

? The potential 1,000 person camp at Gladstone is a key medium-term opportunity for Fleetwood and its earnings potential could be similar to Searipple over time. Gladstone is not yet included in our forecasts.

? High dividends to continue. We believe Fleetwood will continue to pay out close to 100% of earnings in dividends, subject to acquisition opportunities, on an ongoing basis, placing the stock on a fully franked yield of nearly 7%. The high payout is supported by a strong balance sheet (FY12e net cash $30.4m).