For personal use only - ASX · 2012. 3. 7. · ASX on the 13th January 2011 best describe the benefits that the Board see in the acquisition of CTEC and are repeated here for ease

Australian Securities Exchange Company Announcements Office 10th Floor 20 Bond St SYDNEY NSW 2000 7th March 2012 Via E - lodgment Dear Sir

UPDATED INVESTOR PRESENTATION

Forge Group Limited (ASX:FGE) (the “Company”) is pleased to release an updated investor presentation for shareholder information. Please see attached. Yours sincerely

Peter Hutchinson Executive Chairman Forge Group Ltd

For

per

sona

l use

onl

y

About CTEC Established in 2003, CTEC is a private Perth based provider of project solutions to the energy and utilities sectors. CTEC’s capabilities include major turnkey Engineering, Procurement and Construction (EPC) contracts, Build, Own Operate and Transfer (BOOT) projects and Operations & Maintenance (O&M) services and equipment supplies. In the last 12 months CTEC has been awarded four new projects leading to a significant expansion in management and staff. Visit: http://www.ctec.com.au About Forge Forge Group Limited (ASX: FGE) is a Western Australian based public company. Its core business is engineering, procurement, construction, project management and maintenance, particularly for the resource and oil and gas sectors. It has operations in WA and West Africa, with more than 1000 staff and a suite of blue chip clients including Woodside, BHP Billiton, Worley Alumina and Alcoa Australia. Forge provides a “whole of life” asset management service, through three wholly owned subsidiaries, which have been operating since the early 1970’s: Cimeco: provides a complete suite of construction services to the resources industry including civil and concrete, mechanical, electrical and instrumentation, commercial building and maintenance services. Abesque Engineering: specialist provider of engineering design, construction and project management services to the resource and oil and gas sectors. Webb Construction: based in Ghana, Webb has been in West Africa for more than 15 years, and provides comprehensive mine and project construction services to the resource sector. Forge’s cornerstone shareholder is Clough Limited (ASX:CLO).

Visit: www.forgegroup.com.au

For further information, please contact:

Peter Hutchinson Warrick Hazeldine/Greg Galton

Executive Chairman Purple Communications

Tel: +61 8 6389 8500 Tel: +61 8 6314 6300 / +61 417 944 616

For

per

sona

l use

onl

y

http://www.ctec.com.au/

http://www.forgegroup.com.au/

Forge Group Limited 2012 INVESTOR PRESENTATION

For

per

sona

l use

onl

y

ACQUISITION OF CTEC 1

ORDER BOOK 3

MANAGEMENT TRANSITION PLAN 4

INDEPENDENT MANAGEMENT CONSULTANTS APPOINTED 4

ABOUT DAVID SIMPSON 5

GOLD CLASS CLIENTS 6

PLATINUM CLASS CLIENTS 8

NEW DEVELOPMENTS 10

DIRECTORS’ REPORT EXTRACT FROM HALF YEARLY REPORT 11

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 15

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 16

FINANCIAL PERFORMANCE 17

NEXT EDITION 18

Forge Group Ltd is an Engineering, Procurement and Construction (EPC) company listed on the Australian

Securities Exchange (ASX). Through wholly owned subsidiary companies, Abesque, Cimeco, Webb and CTEC the group provides a diversified suite

of engineering, construction, maintenance and power generation solutions to the resources and

infrastructure industries.

With a market capitalisation of over $500m, Group revenue forecast to exceed $600m per

annum in 2012, over 1000 employees and offices in Western Australia, Queensland, South Africa and

Ghana, the company is well positioned to assist with all EPC requirements.

Our Integrated ApproachOver the past five years the Forge business and strategic plan revolved around organically growing a diversified construction

led EPC service to clients. Having now established each division the company differentiates itself from other single purpose mining

service providers and can offer seamless, cost effective and integrated contracting capabilities to clients, especially those

wishing to limit the number of contractors on site.

CIMECO &

WEBB

CIMECO

CIMECO

ABESQUEABESQUE

ABESQUE

ELECTRICAL

MECHANICAL

CIVILFABRICATION

PROCUREMENT

ENGINEERING

DESIGN

STUDIESMAINTENANCE

COMMISSIONING

CONTENTS

For

per

sona

l use

onl

y

1

ACQUISITION OF CTECOn the 20th January 2012 the Company purchased all the shares in CTEC Pty Ltd (CTEC) a private Western Australian based company providing engineering, procurement and construction (EPC), operations and maintenance solutions to the energy and utilities sectors.

The following extracts from the Company’s announcement to the ASX on the 13th January 2011 best describe the benefits that the Board see in the acquisition of CTEC and are repeated here for ease of reference and to support Note 5: Events Subsequent to Reporting Date.

Founded in 2003, CTEC has more than 60 employees based in Head Office in Balcatta, Western Australia and regional offices in Queensland. From these offices CTEC runs all areas of engineering, procurement, construction management and commissioning of its power generation contracts. From the Kwinana site CTEC runs the operation and maintenance of the Kwinana Swift Power Station.

CTEC prides itself on its ability to analyse and offer the best fit solution to its clients’ clean energy power needs, and has the in house capability to offer full turnkey solutions from the point of fuel entering the facility to the final export of power to the local transmission system. These skills include the full design, engineering, specification and procurement of

all plant components, in addition to, construction, commissioning, documentation and reliability and performance testing.

The acquisition of CTEC is an important first step in Forge’s new growth strategy. The acquisition is expected to contribute annual revenue in the range of $200 to $250 million and EBITDA of between $15 to $20 million in the first full year of ownership.

Whilst CTEC is an EPC contractor its business model is more akin to the business of engineering, procurement and construction management (EPCM), lowering risk where possible via sub-contracting engineering and construction and having procured items guaranteed by renowned international suppliers such as Siemens and GE. In acquiring the shares in CTEC and being able to sub contract some or all of the engineering and construction services we believe we have structured the transaction to better mitigate financial risk for the Forge Group.

Nevertheless, we see significant upside potential for Forge subsidiaries Abesque and Cimeco in being able to undertake engineering and civil, mechanical and E&I services to CTEC

which on CTEC’s current contracts could amount to additional internally generated revenue of well over $100m.

The Group is in the process of completing the accounting for the acquisition and determining the fair value of the contingent consideration, acquired assets and assumed liabilities of CTEC. Therefore, disclosure of fair values of net identifiable assets and the goodwill arising from the acquisition cannot be made in accordance with Accounting Standard AASB3 “Business Combinations” at this stage. It is likely, however that the value of CTEC’s order book will account for a significant value of the purchase price and a commensurate amortisation charge will need to be applied to the Company’s future earnings as a result of the final asset allocation.

Pleasingly, the Company can already report that $35m worth of subcontract construction work has been awarded (post Completion) to Cimeco for CTEC projects currently underway with an expectation that this number will increase to over $100m over the next 12-18 months.

CTEC Managing Director, Mr Neil Robinson with Forge Executive Chairman Peter Hutchinson.

For

per

sona

l use

onl

y

2

Forge Group Limited | 2012 Investor Presentation

Project: McKee Power PlantLocation: Bay of Plenty, New ZealandPeriod: 2011 – 2012Contract Value: $25m (approx)Scope of Works: EPC contract for Bay of Plenty Energy, for the free issue of a 100MW McKee Energy Gas Turbine Power Plant, in New Zealand.

Project: Merredin Power StationLocation: Merredin, WAPeriod: 2011 – 2012Contract Value: $68m (approx)Scope of Works: EPC contract for the 80MW Merredin Open Cycle Gas Turbine Power Station in the mid-west of Western Australia. This is the second project associated with this customer.

ACQUISITION OF CTEC CONTINUED

Project: Diamantina Power StationLocation: Mt Isa, QLDPeriod: 2012 – 2014Contract Value: $420m (approx)Scope of Works: EPC contract for a 242MW Combined Cycle Gas Turbine Power station to be built for APA DPS Pty Ltd to deliver the energy to the local users via Ergon Energy and industrial users including Xstrata Plc.

Project: West Angeles Power StationLocation: 110km from Newman, WAPeriod: 2012 – 2014Contract Value: $150m (approx)Scope of Works: EPC contract for an 86MW Open Cycle Power Station for Hamersley Iron Pty Ltd, a subsidiary of Rio Tinto Limited for their new Pilbara development. Potential for two further similar contracts.

GOVERNMENT

REVENUE & EARNINGS STREAMForecast Revenue and Gross Profit - CTEC Acquistion AssumptionsRevenue & Margin Analysis ($millions) FY12 FY13 &

BeyondBalance

of ContractMin Max Min MaxDiamantina Power Station 45 90 325 370 415West Angeles

30 60 90 120 150Merredin15 30 0 15 30McKee - NZ10 20 0 10 20Total

100 200 415 515 615Forecast Gross Profit (10%) 10 20 42 52 62Potential in-house works for Cimeco (20%) 20 40 83 103 123Potential margin on in house works (12%) 2 5 10 12 15Total potential Gross Profit for Group 12 25 52 64 77

Project: Diamantina Power Station

PURCHASE PRICE

(i) Cash on Completion: $16.00m

(ii) Deferred Payment:• 50%ofCTEC’sFY12NPBT

to a maximum payment of $10.00m 1

• IfCTEC’sFY12NPBTis

greater than $8m - $2.00m

• 50%ofCTEC’sFY13NPBT

to a maximum payment of $8.60m

• IfCTEC’sFY13NPBTis

greater than $8m - $2.00m

Total maximum payment $38.60m

1 - Where the NPBT for FY12 is less than $20m but the aggregate

of the NPBT for FY12 and FY13 is not less than $40m, an

additional amount may be payable but only if the amount payable

under these two components of the deferred consideration does

not exceed $18.6m. Accordingly, the total maximum consideration

payable under the Acquisition is $38.60m.

For

per

sona

l use

onl

y

3

ORDER BOOK

With an order book exceeding $1.2bn up 336% from same time last year of $275m, revenue for 2HFY12 could be in the range of $433-$533m i.e. up from previous period (pp) of $221m or 96-141%. Notes 1 -4 above breakdown the revenue build up of this increase. Whilst substantial it should be noted that the core business (engineering and construction activities) units prior to recent contract awards (that must be partially completed this financial year) account for only $273m (an increase of only 23% on pp). The newly acquired power generation company CTEC could account for further increases of between $100-$200m for the period of ownership between the date of acquisition and the 30th June 2012. Revenue take up will be largely dependent on milestone payments made on the turbines for the Diamantina and West Angeles Power stations which although contracted to be made prior to the 30th June 2012 could be delayed.

The historical NPBT margin is provided for information only. The company is not yet in a position to confirm that such margins can be maintained or applied to the 2HFY12 forecast revenue range of $433-$533m.

2HFY12, FY13 and FY14 will contain an undefined substantial amortisation charge emanating from the acquisition of the CTEC contracts as part of the allocation of the CTEC purchase price in accordance with AASB3.

Unrecorded Revenue Order Book Division Amount

($m)Diamantina Power Station CTEC 415

FMG Cimeco 165West Angeles Rio Power Station CTEC 147

Hope Downs 4 - Rio Cimeco 100CBI -Gladstone LNG Cimeco 90DeGrussa Copper Project Abesque 50

MCC Sino Cimeco 43BHP NPI Cimeco 30AngloGold Ashanti Webb 30Lynas Corp Mt Weld Abesque 30Merriden Power Station CTEC 25McKee Power Station CTEC 25Shark Bay Salt Abesque 25Other Cimeco 25Total 1200

Unrecorded revenue means that part of the order book that has yet to be brought to account as revenue in the books of the company. The unrecorded revenue order book does not necessarily reflect the original value of the order.

Order Book

425

10

11

12

13

14

15

16

17

18

0

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

2011 FYActual

Revenue

227

1HFY12Actual

Revenue Note

1

Note

2

Note

3

325

July 2011OrderBook

555

Aug 2011OrderBook

Forecast 2012 FY

(Nov Euroz Presentation)

Forecast RevenueOrderbookActual Revenue

NP

BT

(%

)

Rev

enue

A$

(Mill

ion)

260

30*

80% of July 2011 Order book

80% of FMG

Contract

+50

+500 533

160

Order Book (14 Feb 2012)

2HFY12ForecastRevenue

1HFY10

Average NPBT % (1HFY10–1HFY12)

Forecast 2012 FY

(01 Mar 2012)

227

670

770

433(to533)

Note 4

273

60

100

100

433

767

667

1,200

$200m FMG Contract Due Completion Date FY12

Assumes $50m Contracts Completed Only on Orders

Received Post August 11

2HFY10

1HFY11

2HFY11

1HFY12

Note 1: Balance of August Order Book that must be completed by June 2012.Note 2: Various new orders that will be recorded as revenue by June 2012, incl. CBI, Lynas, FMG, MCC and others.Note 3: Range of revenue to be recorded by CTEC from 20 January 2012 to 30 June 2012Note 4: Balance of Order Book still to be recorded as revenue for subsequent years 2013–2014

(NB: Excludes internal Cimeco/CTEC works estimated at >$100m over the period)

* July 2011 Actual Revenue

WesternAustralia

Queensland

ORDER BOOK GEOGRAPHIC MIX

InternationalFor

per

sona

l use

onl

y

4


INDEPENDENT MANAGEMENT CONSULTANTS APPOINTEDManagement consultants PricewaterhouseCoopers have been mandated to assist in developing the transition and implementation plan. The scope of works includes;

� Documentation of the financial, strategic and operational history of the company to date

� Conducting and recording exit interviews and outcomes

� Reviewing Board composition and performance

� Assistance in structuring, recruiting and defining position descriptions where necessary

� Reviewing and reporting on systems, procedures, risk management and status of “carry over jobs”

� Assist in the communication of the transition plan to stakeholders, including clients, suppliers, staff, analysts and shareholders

MANAGEMENT TRANSITION PLAN

FORGING A NEW PATH ON DISCLOSUREListed companies publish lots of information on their remuneration practices; this year, the quality might start to match the quantity.

THE remuneration reports published each year by ASX-listed companies often run to 20 pages or more.

With that amount of disclosure, you might think shareholders and analysts would be given a very clear understanding of remuneration practices. Not so. The large volume of information does not necessarily equate to better quality or more useful information.

Sometimes it can be quite the opposite. Many remuneration reports are filled with predictable comments about the philosophy employed by boards of directors, to set remuneration for their executives and themselves as directors.

The common theme is: aligning the interests of directors and executives with the shareholders.

That philosophy can’t be faulted; the issue is, how well is it executed?

That’s where remuneration reports start to become problematic.

For instance, is the base salary really aligned with the market, as companies claim?

And are the annual bonus and share options really aligned to performance?

These questions are rarely addressed in a

meaningful way in remuneration reports.

There are at least two major problems with the information that ends up being published.

It includes a valuation, at a moment in time, of the share options held by each director and the senior executives.

As I have noted in the past, the valuation of share options is an inexact science, and the amount of value ultimately derived will usually bear no relation to the valuation published in the annual report.

The options may prove to be more valuable, or end up being worthless, depending on the company’s earnings, its share price performance, and other factors.

It would be far more useful to publish, in a systematic manner, whether the options were exercised, and if so, how much value they delivered.

WA Business News publishes this information each week (see page 17, Changes in Directors Interests) and it’s fascinating to see the number of directors who are able to use options to buy shares at a fraction of the prevailing market price.

A second major problem with remuneration reports is the lack of disclosure around performance measures.

Some companies disclose the type of metrics that are employed in their bonus schemes, but they don’t disclose the specifics.

For instance, what growth in earnings per share has to be achieved for the chief executive to qualify for the maximum bonus?

Similarly, what safety record, or production growth, needs to be achieved to qualify for the maximum bonus?

Those critical details have not been published, until now.

In announcing the appointment of new chief executive David Simpson last week, engineering and construction contractor Forge Group disclosed his full employment agreement.

Mr Simpson will be able to earn up to $2 million per year, making him one of the highest paid chief executives in the state, based on data compiled in WA Business News’ annual CEO Salary Survey.

More importantly, Forge has disclosed exactly what Mr Simpson has to achieve to qualify for his short term and long-term incentives.

In both cases, the incentives are tied to growth in diluted earnings per share (EPS).

For Mr Simpson to get a short term bonus in his first year, Forge will need to lift EPS by more than 10 per cent. To get the maximum incentive, the company must lift EPS by 20 per cent.

In order to qualify for the maximum long-term incentive, which will be paid in the form of unvested performance rights, Forge has to achieve compound EPS growth of 14.87 per cent. If Mr Simpson achieves that goal every year, Forge will double its EPS over five years.

“It’s a $2 million package if he seriously delivers,” Forge chairman Peter Hutchinson told WA Business News. “They are real stretch targets.

“If he can double diluted earnings per share over five years, then he deserves that kind of reward.”

Hats off to Forge Group for setting an example to the rest of the market on full disclosure.

WA Business News www.wabusinessnews.com.au January 19, 2012 | 25

| OPINION ■

EDITORIALMark Beyer

THE remuneration reports pub-lished each year by ASX-listed companies often run to 20 pages or more.

With that amount of disclosure, you might think shareholders and analysts would be given a very clear understanding of remuneration prac-tices.

Not so. The large volume of information does not necessarily equate to better quality or more useful information.

Sometimes it can be quite the opposite. Many remuneration reports are filled with predictable comments about the philosophy employed by boards of directors, to set remunera-tion for their executives and them-selves as directors.

The common theme is: aligning the interests of directors and execu-tives with the shareholders.



For instance, is the base salary really aligned with the market, as companies claim? And are the annu-al bonus and share options really aligned to performance?

These questions are rarely addressed in a meaningful way in remuneration reports.

Forging a new path on disclosureListed companies publish lots of information on their remuneration practices; this year, the quality might start to match the quantity.

There are at least two major prob-lems with the information that ends up being published.


As I have noted in the past, the valuation of share options is an inex-act science, and the amount of value ultimately derived will usually bear no relation to the valuation published in the annual report.

The options may prove to be more valuable, or end up being worthless, depending on the company’s earn-ings, its share price performance, and other factors.

It would be far more useful to publish, in a systematic manner,

whether the options were exer-cised, and if so, how much value they delivered.

WA Business News publishes this information each week (see page 17, Changes in Directors Interests) and it’s fascinating to see the number of directors who are able to use options to buy shares at a fraction of the pre-vailing market price.


Some companies disclose the type of metrics that are employed in their bonus schemes, but they don’t dis-close the specifics.

For instance, what growth in earn-ings per share has to be achieved for

STRIVE: Forge Group chairman Peter Hutchinson (above) says the new chief executive David Simpson has some real ‘stretch targets’ in his contract. Photo: Grant Currall

WA Business News is focused on understanding and addressing the issues of the professional and business community. The newspaper stands as an independent

news provider, striving to report on the most relevant stories and information in a positive and constructive manner. Privately owned by

Western Australians who are committed to our great state, WA Business News seeks to act as

a catalyst for business in WA.

Est. 1993

Published by Business News Pty LtdLevel 2, 139 Newcastle Street,

Perth WA 6000PO Box 8352, PBC WA 6849

Ph 08 9288 2100 Fax 08 9227 6503www.wabusinessnews.com.au

[email protected]

READER GUIDE

Executive Chairman

Elton Swarts

SUBSCRIPTIONS

Subscriptions Manager

Allison Cairns

ADVERTISING & EVENTS General Manager

Suna Cavanagh

[email protected]

News Editor

Mark Beyer

PRODUCTIONProduction Coordinator

Jacqui Moxham

PRINTERS

Rural Press

Unless otherwise stated all emails are to be addressed as follows:

[email protected]

© 2011 WA Business News, All Rights Reserved.

Ph:9288 2100 www.wabusinessnews.com.au

the chief executive to qualify for the maximum bonus?



In announcing the appointment of new chief executive David Simpson last week, engineering and construc-tion contractor Forge Group disclosed his full employment agreement.


More importantly, Forge has dis-closed exactly what Mr Simpson has to achieve to qualify for his short-term and long-term incentives.


For Mr Simpson to get a short-term bonus in his first year, Forge will need to lift EPS by more than 10 per cent. To get the maximum incen-tive, the company must lift EPS by 20 per cent.

In order to qualify for the maxi-mum long-term incentive, which will be paid in the form of unvested performance rights, Forge has to achieve compound EPS growth of 14.87 per cent. If Mr Simpson achieves that goal every year, Forge will double its EPS over five years.




helping business grow

Should we talk?9288 2100.

Yourmarket,ourreaders?


| OPINION ■

EDITORIALMark Beyer


























Est. 1993




[email protected]

READER GUIDE

Executive Chairman

Elton Swarts

SUBSCRIPTIONS


Allison Cairns


Suna Cavanagh

[email protected]

News Editor

Mark Beyer


Jacqui Moxham

PRINTERS

Rural Press


[email protected]



















| OPINION ■

EDITORIALMark Beyer


























Est. 1993




[email protected]

READER GUIDE

Executive Chairman

Elton Swarts

SUBSCRIPTIONS


Allison Cairns


Suna Cavanagh

[email protected]

News Editor

Mark Beyer


Jacqui Moxham

PRINTERS

Rural Press


[email protected]



















| OPINION ■

EDITORIALMark Beyer


























Est. 1993




[email protected]

READER GUIDE

Executive Chairman

Elton Swarts

SUBSCRIPTIONS


Allison Cairns


Suna Cavanagh

[email protected]

News Editor

Mark Beyer


Jacqui Moxham

PRINTERS

Rural Press


[email protected]


















For

per

sona

l use

onl

y

5

ABOUT DAVID SIMPSONUntil recently, Mr. Simpson was Chief Executive, UGL Resources, a division of UGL Limited (ASX:UGL). He has extensive experience specific to the engineering and construction sectors both in Australia and internationally. In his most recent role he was responsible for leading UGL Limited’s fastest growing division with an order book of $1 billion, servicing the mining and mineral processing, oil and gas, chemicals and petrochemicals, and industrial processing industries.

UGLR is structured into two business lines. Major projects, which specialises in the front end engineering and design, EPCM, EPC and construction projects from $100m to $1bn. The second business line is Asset Services

which involves itself in long term heavy industrial maintenance, shutdowns and small capital works up to $100m.

Mr Simpson has worked at UGL since 2006, initially as Group General Counsel, then as Chief Commercial Officer in 2009. This role saw him lead the company’s Strategy, Development, M&A and Major Project teams. He has also served as a Director for most of UGL’s global divisions.

Prior to joining UGL, David spent 13 years working in engineering and construction companies, including Leighton Contractors, Daimler Chrysler Rail and Asea Brown Boveri (ABB). At Leighton Contractors he held the responsibility for financed projects and major infrastructure, and

his international experience began with his role at Daimler Chrysler Rail where he held the position of Global Counsel & Contracts Manager. David has worked internationally and lived in the UK and Asia.

David is married with three children.

PROPOSED RESTRUCTURE

CEO

BOARD

OPERATIONS DIRECTOR

SHARED SERVICES

MECHANICAL

BD MANAGER

E&I IT

MAINTENANCE(NEWCO)

BUILDING ASSETS & PLANT

FINANCIAL REPORTING & COMPANY SECRETARY

PROJECT CONTROLS & JOB COSTING

ENGINEERING(ABESQUE)

CIVIL

CTEC

CONSTRUCTION(CIMECO) (WEBB)

CFO & COMPANY SECRETARY

• ESTIMATING • PROPOSALS & TENDERING • JV MANAGEMENT • BUSINESS DEVELOPMENT

HSE HR/IR MARKETING QA/QC COMMERCIAL MANAGEMENT

PROJECT EXECUTION & PROJECT CLOSE OUT(REFER TO PROJECT STRUCTURE)

CURRENT STRUCTURE

CIMECOA. Ellison

COO Construction

FORGEP. Hutchinson

CEO/CFO/International

WEBB

West Africa

ABESQUEG. McRostie

COO Engineering

Incoming CEO, Mr David SimpsonFor

per

sona

l use

onl

y

6


Project: Mt Weld Rare Earths ProjectLocation: Laverton, Western AustraliaDuration: 2010 to 2012Scope of Works: EPC contract for the engineering design, supply, fabrication, construction and commissioning of the Mt Weld concentration plant located 35km south of Laverton in WA.Engineering activites included the installation of the concentration plant together with all crushing,

milling, flotation, filtering and miscellaneous processing activities and control building. Construction works included;

� Civil concrete works; � Structural steel and platework supply, fabrication and erection;

� Piping supply, fabrication and erection; and � All electrical and instrumentation works and commissioning assistance.

GOLD CLASS CLIENTS

ONSLOW SALT

GOVERNMENT

WEST AFRICA

Project: DeGrussa Copper ProjectLocation: 150km north of Meekatharra, WADuration: June 2011 to August 2012Scope of Works: Concentrator and associated infrastructure design, construction and commissioning of the 1.5Mtpa Copper Concentrator.

� The Concentrator consists of the following unit operations: Primary Crushing; Ore Storage;

Milling and Classification; Flotation; Concentrate Dewatering; Concentrate Storage; Reagents and Services;

� Construction Included; Civil concrete works; Mechanical installation; Structural steel and platework; Piping supply, fabrication and erection; and All electrical and instrumentation works and commissioning assistance.

Project: Ravensthorpe Nickel Process UpgradeLocation: Ravensthorpe, Western AustraliaDuration: November 2010 to January 2012

Scope of Works: A series of contracts for the upgrade of an existing Nickel Process Plant. Works consisted of two crushing buildings, a dewatering and product screening building and other minor works at the existing plant located approximately 530km south of Perth and

35km east of the town of Ravensthorpe in Western Australia. The construction work covers the erection of structural steel and installation of platework, mechanical equipment, piping materials, electrical and instrumentation works.

Project: Onslow Saltwash PlantLocation: Onslow, Western AustraliaDuration: Aug 2009 to 2012Scope of Works: Design, procurement and construction and commissioning of a new salt wash plant across all disciplines. Works include:

� Fabrication and installation of piping; � Fabrication, transport and installation of structural and mechanical steel and cladding;

� Earthworks and concrete works � Supply all materials for concrete batching � Installation of mechanical equipment; � Installation of electrical equipment, instrumentation and controls;

� Demolition and removal of existing plant; � Commissioning and Performance Testing; � Development and provision of Operating and Maintenance manuals

Project: Obuasi South Treatment PlantLocation: Obuasi, GhanaDuration: 2012 to 2014Scope of Works: AngloGold Ashanti Ghana plan to upgrade their Obuasi ore processing facilities which process underground ore, recommission the oxide ore process plant and install facilities to retreat reclaimed tailings. Abesque will be responsible for developing the scope of work and

cost estimate to achieve the above requirements and for the provision of the EPC services, through sister companies Webb Construction and Cimeco Pty Ltd.Webb (and via subcontract where necessary to Cimeco) shall deploy all the necessary resources, site management and supervision, trades people, construction skilled and unskilled labour, equipment and consumables to undertake the construction of the Works

Project: MARGARET RIVER CIVIC CENTRELocation: Margaret River, Western AustraliaDuration: August 2011 to November 2011Scope of Works: Construction of new offices and civic centre for the Shire of Augusta Margaret River as designed by Bollig Design Group. Building features include:

� Insitu reinforced concrete and steel frame; � Curtain walling & Thermo-Tech double glazing;

� Metal profile wall sheet with insulated panel roof; � Building management system; � Full internal fit out incl. mechanical, electrical, IT, AV, cabinetry and furniture;

� Exposed concrete paths and timber walkways; � Feature stone walling and coordinated landscape design;

� Street furniture, artwork and a feature stream bed using roof water.

For

per

sona

l use

onl

y

7

AU$ Millions

CTEC Power

Services

ElectricalElectricalElectrical

MechanicalMechanicalMechanical

CivilCivilCivil

EngineeringEngineeringEngineeringAbesqueAbesqueAbesque

CimecoCimecoCimeco

0

50

100

150200

250

300

400+

AU$ Millions

CTEC Power

Services



CivilCivilCivil


CimecoCimecoCimeco

0

50

100

150200

250

300

400+

AU$ Millions

CTEC Power

Services



Civil

EngineeringAbesque

CimecoCimecoCimeco

0

50

100

150200

250

300

400+

AU$ Millions

CTEC Power

Services



CivilCivilCivil


CimecoCimecoCimeco

0

50

100

150200

250

300

400+

AU$ Millions

CTEC Power

Services



Civil


CimecoCimecoCimeco

0

50

100

150200

250

300

400+

AU$ Millions

CTEC Power

Services

Electrical

Mechanical

CivilCivilCivil

EngineeringAbesque

CimecoCimecoCimeco

0

50

100

150200

250

300

400+

GOLD CLASS CLIENTS

AU$ Millions

For

per

sona

l use

onl

y

8


PLATINUM CLASS CLIENTSProject: Finucane Island NPILocation: Port Hedland, Western AustraliaDuration: 2012 to 2013Scope of Works: Non-process infrastructure required on Finucane Island to support increased port throughput under the Port Hedland Inner Harbour Project. Works consist of construction of new facilities as well as refurbishment and upgrades to existing facilities.

These facilities include: � New Lube Facility; � Upgrade to Belt Store; � Expansion of Administration Building; � Upgrade of Emergency Services Office and Amenities;

� Upgrade Crushing Amenities and Office.

Project: Hope Downs 4 NPILocation: Newman, Western AustraliaDuration: August 2011 to December 2012Scope of Works: Construction of a 200 man fly-camp as well as the design, manufacture, supply, testing, installation, construction and commissioning of mine buildings and support facilities for the Hope Downs 4 iron ore mine, approximately 30km north west of Newman.

These facilities include: � Administration & Support Facilities � Explosives Storage & Handling Facilities � Mine Vehicle Servicing Facilities � Workshop, Warehouse & Stores Buildings � Site Electrical & Water Service Facilities, � Including Underground & Above Ground Reticulation.

Project: Gorgon TanksLocation: Henderson, Western AustraliaDuration: July 2009 to April 2011Scope of Works: Design and construction of 14 process utilities tanks for the Gorgon LNG Project:

� Design and materials selection required to meet required 30 year life span;

� Offsite construction at Australian Marine Complex, Henderson for delivery to Barrow Is.

� Construction of a very large encapsulation structure to enable surface treatment to tanks.

� Design and construction of elaborate structural steel grillages to facilitate transportation.

� Design and construction of purpose built polygonal lifting devices to enable the completed tanks to be loaded onto Heavy lift Marine Transport and unloaded at Barrow Is.

Project: Pluto Onshore Building Package #3Location: Dampier, Western AustraliaDuration: January 2011 to April 2012Scope of Works: Design and construction of administration buildings and non-process infrastructure for the Pluto Gas Plant, including:

� Warehouse comprising: climate controlled storage; mezzanine; offices, tea prep, and meeting room.

� Workshop comprising: QMI laboratory; computer room; offices, crib, change rooms and amenities; workshop floor and 10t OHTC; tool store; rigging store; welding bay.

� Fire Station comprising: equipment assembly and storage rooms; drive through parking area.

� Administration Building comprising: offices, meeting, training rooms; tea preps and amenities; and cafeteria.

Project: Solomon Primary Crushing HubsLocation: Tom Price, Western AustraliaDuration: October 2011 to December 2012Scope of Works: EPC contract for the engineering design, supply, fabrication, procurement, construction and commissioning of the three Sizer Hubs at the FMG Solomon Project, 60km North of Tom Price in WA. This includes:

� Doubled sided Rom Bin; � Concrete buttress and reinforced earth wall;

� Apron feeder; � Primary Sizer; � Primary conveying system; � The Secondary sizer and structure; � Control building, switch rooms and associated process infrastructure works;

� Civil concrete works; � Structural steel and plate work and piping; � Procurement/erection of major mechanical and electrical items;

� Electrical works and Commissioning.

Project: Sino Iron ProjectLocation: Cape Preston, Western AustraliaDuration: July 2008 to April 2012Scope of Works: A series of packages across Citic Pacific’s magnetite processing facility. These packages include:

� Filter Buildings Civil & Structural Steel � Dewatering Facilities, Civil & Structural Steel � Stockpile Area Civil Works

� Cape Administration Building & Workshop � Conveyor & Pipe Rack, Civil & Structural Steel � Port Control Building And Laboratory Building � Installation of 2 Thickener Tanks � Installation of 14 Agitator Tanks � Installation of Burried Piping.

For

per

sona

l use

onl

y

9

AU$ Millions

CTEC Power

Services

Electrical


Civil

EngineeringAbesque

CimecoCimecoCimeco

0

50

100

150200

250

300

400+

AU$ Millions

CTEC Power

Services

Electrical

Mechanical

CivilCivilCivil

EngineeringAbesque

CimecoCimecoCimeco

0

50

100

150200

250

300

400+

AU$ Millions

CTEC Power

Services

Electrical

Mechanical

CivilCivilCivil

EngineeringAbesque

CimecoCimecoCimeco

0

50

100

150200

250

300

400+

AU$ Millions

CTEC Power

Services

Electrical

Mechanical

CivilCivilCivil

EngineeringAbesque

CimecoCimecoCimeco

0

50

100

150200

250

300

400+

AU$ Millions

CTEC Power

Services



CivilCivilCivil

EngineeringAbesque

CimecoCimecoCimeco

0

50

100

150200

250

300

400+

AU$ Millions

CTEC Power

Services



CivilCivilCivil

EngineeringAbesque

CimecoCimecoCimeco

0

50

100

150200

250

300

400+

PLATINUM CLASS CLIENTS

AU$ Millions

For

per

sona

l use

onl

y

10


NEW DEVELOPMENTS

On 7 February 2012 CFPL received a further variation order for approximately $15.5m to provide more detailed and specific works as an extension to its initial ECI agreement. CFPL is very proud to be working on such an important project with a company such as RHH. This new variation order is most pleasing as it continues to reaffirm the JV’s position to present a compelling case to the client for the construction phase of Package 3.

Extract from Appendix 4D Directors’ Report.

Forge’s wholly owned subsidiary, Cimeco Pty Ltd, has entered into a Memorandum of Understanding (MOU) with majority owned indigenous company Pilbara Logistics (WA) Pty Ltd to provide civil, mechanical and electrical and instrumentation services to the mining and construction companies in the NW of Western Australia.

Encouraged by recent success with contract awards from both Rio Tinto and BHP totalling in excess of $140m the MOU provides, at this stage, for the completion of these two projects via unincorporated joint ventures. PLWA’s majority shareholder Mr Geoff Stocker is a recognised leader in the training, mentoring and supporting of local indigenous men and women in

the region and Forge is very pleased to be associated with a company of such standing in the indigenous community. It is the intention of both parties to formalise the relationship further over the coming months and for Cimeco to assist, where it can, in PLWA’s commitment to the indigenous community in the Pilbara.

For

per

sona

l use

onl

y

11

DIRECTORS’ REPORT EXTRACT FROM HALF YEARLY REPORTThe Directors of Forge Group Limited present the consolidated financial report of Forge Group Limited and its subsidiaries (the Group) for the half-year ended 31 December 2011.

The following persons were Directors of Forge Group Limited during the half-year and up to the date of this report:

� Peter Hutchinson � Andrew Ellison � Gregory McRostie � Marcello Cardaci � Neil Siford � David Craig � Kevin Gallagher

(appointed 3 November 2011) � John Smith

(resigned 2 November 2011)

IntroductionForge Group Ltd (Company) is pleased to report to shareholders that the Company has recorded further increases in revenue, pre tax (NPBT), post tax earnings (NPAT) and EBITDA over both the previous corresponding period (pcp) and the previous period (pp). Given the recent record financial year 2011 (FY2011) result and the exponential increase in these financial metrics in previous years and half-years, such maintainable results have enabled the Company to increase the dividend payout from 15.1% of earnings per share (EPS) to 23.5% of EPS. Although the increases in the Company’s fundamental financial results referred to above are marginal on a percentage basis the unrecorded revenue order book has increased by 336% to over $1.2 billion ($275m pcp) as at the date of this report and suggests that more substantial growth can be achieved in the second half of FY2012 and beyond. Construction activities continue to dominate earnings and revenue via construct only projects and construction projects from the engineering services subsidiary. Revenue and NPBT of the Group’s engineering subsidiary increased over pcp by 37% and 92% respectively.

Financial HighlightsFor the six month period ending 31st December 2011, the Group reports record revenue of $227.80m, record NPBT of $30.23m and record NPAT and EBITDA of $21.25m and $33.56m respectively.

The Company announces an interim fully franked dividend of 6 cents per share with a record date of 16th March 2012 and a payment date of 30th March 2012, an increase of 50% over pcp. Cash and cash equivalents at Balance Sheet date amounted to $93.1m.

Albeit, that the Consolidated Statement of Financial Position reveals a net increase in property, plant and equipment of just $7.6m and the Consolidated Statement of Cash Flows shows payments for same of $10.63m, actual commitments and payments for property, plant and equipment amounted to approximately $25m during the period under review. Whilst the Company does not expect such a recurring rate of capital expenditure for the second half, full year FY2012’s capital expenditure is forecast to be over $30m. Cimeco Pty Ltd, the Company’s construction subsidiary possesses an impressive, extensive, modern and reliable fleet of construction plant and the most

recent acquisition (post December 2011) of one of Western Australia’s few 600 tonne (equivalent lifting capacity) Manitowoc cranes (see photo on page 5) for the recently awarded $200m Fortescue Metals Group (FMG) Solomon Hub contract positions this part of the Group’s activities well for future large scale construction projects. Additionally, (again post December 2011) and following award of the $90m CBI Gladestone Australia Pacific LNG Project the Company has purchased three (3) 60 metre truck mounted concrete pumps with the intention of being able to operate in a space normally reserved for large Tier 1 construction contractors and specifically to appeal to the client’s future construction requirements by virtue of their specialised capabilities for the expanding LNG marketplace.

Contemporaneously with the above, total Group borrowings have increased by only $3.16m during the period due to specific hire purchase contracts for property, plant and equipment that were not paid for out of cash reserves, although increases in borrowings in line with the capital expenditure highlighted above is expected in the second half regardless of the Company’s large cash reserves.

For

per

sona

l use

onl

y

12


Directors’ Report Extract from Half Yearly Report continued

Review of Operations

Cimeco Pty Ltd (Cimeco)The performance of the Group’s construction subsidiary Cimeco was impressive. Revenue for the 6 months was $208m up 12.27% on pcp with net profit before tax of $28.69m. Revenue included intercompany revenue (eliminated in the Consolidated results) of $46.85m predominately generated via fixed price Engineering Procurement and Construction (EPC) contracts introduced to Cimeco from the Group’s engineering services division Abesque Engineering Ltd (Abesque).

Construction activities that utilised all disciplines of the operating divisions included construction and commissioning of the Kanmantoo Copper Project processing plant for Hillgrove Copper Pty Ltd, completion of the Ravensthorpe Nickel plant modifications for FQM Australia Nickel Pty Ltd, upgrade construction works for Onslow Salt Pty Ltd’s washplant, commencement of work for the construction of the Degussa Copper Project’s processing plant for Sandfire Resources NL, completion of works on the Mt Weld Rare Earths Project for Lynas Corporation’s Mt Weld Mining Pty Ltd and the commencement of works for the design, procurement, overseas fabrication, shipment in modules and onsite installation of three crushing hubs for FMG Solomon Pty Ltd.

The relationship with MCC Mining (WA) Pty Ltd’s management strengthened further resulting in additional construction activities and work orders at the Cape Preston site. Offering an overall multi-disciplined construction approach provides a competitive advantage, suits the client’s construction model of fewer but larger contractors on site and has allowed us to establish an on-going relationship with MCC Mining that will survive beyond the end of the construction period at the Sino Iron Ore Project.

The Mechanical Division has been busy commencing new, and completing a number of existing projects including the installation of 12 large process tanks, the construction of two thickeners and the construction of over 13 kilometres of large bore buried process pipework at CD#1 for MCC Mining. Work has continued on the South Treatment Plant Makeover Project for AngloGold Ashanti (Ghana) Ltd at the Obuasi Gold Mine in Ghana.

The E&I Division completed the first stage of the Marampa Iron Project in West Africa, the underground HV and fibre cabling project at Marandoo for Rio Tinto IS&T and has just been awarded dewatering and infrastructure packages after completion of the underground works. For a relatively new addition to Cimeco’s suite of construction services this division has significant other opportunities on offer.

The Civil and Concrete Division has recently commenced on a number of new projects including sub contract works for CTEC (in addition to that mentioned above) on the Merredin power station comprising earthworks, foundations and in ground services. The $200m Primary Crushing Hubs contract for FMG announced to the market on the 30th August 2011 was sourced, tendered and won by this division of Cimeco with the assistance of the Cimeco Executive management team. Works completed to date at year end amounted to approximately 15% of the contract value. Further contract awards for the BID and CID Ore Processing Facilities on the Solomon project for FMG are expected in the second half.

The Commercial Building Division continued working on the building packages at the Woodside Pluto LNG plant, the Esplanade Hotel in Port Hedland, design and construction of the Hope Downs 4 non-process infrastructure facilities and a 200 man fly camp for Hamersley HMS Pty Ltd. In the southwest, the Building Division completed the Civic Centre for the Shire of Augusta & Margaret River and the Administration Complex for Verve Energy at Muja, Collie.

The Services Division complemented its local Perth based operations by establishing an operating branch in Karratha helping to convince local clients Rio Tinto, Burrup Fertilisers and Dampier Salt of Cimeco’s permanency in the region which is aimed at strengthening the Company’s recurring income via long term maintenance contracts. Further work has recently been secured with the Water Corporation and Cockburn Cement. The fabrication and marine services departments within this division continue to operate profitably.

The Assets Department, although an internal division of Cimeco, was exceptionally busy during the period. All new equipment had to be painted and prepared for service. Training and transportation of equipment to site, demobilisation after project completion, maintenance, spare parts inventory, insurance and safety precautions need to be addressed by the asset team on a daily basis. Although the construction fleet is large the Company still hires in approximately 40% of its construction requirements.

Cimeco’s tendering pipeline remains very strong and further contract awards are expected over the next few months.

For

per

sona

l use

onl

y

13

Abesque Engineering Ltd (Abesque)During the period Abesque, the group’s engineering arm, continued to expand personnel numbers as project workload increased in study, FEED and EPC contracting activity.

Milestones for the period included the practical completion, commissioning and handover of two major projects, these being the Kanmantoo Copper Project for Hillgrove Resources and the Onslow Salt Washplant for Onslow Salt Pty Ltd. Both of these projects were delivered under design and construct contracts, with Kanmantoo being a cost plus style contract with incentives and the Onslow project being a fixed price EPC contract.

Practical completion and handover for the Kanmantoo Project, located near Adelaide in South Australia, was achieved in December 2011 along with the first shipment of copper concentrate from the operation. At the time of writing the plant was under the control of the owner’s team and meeting production ramp-up targets. It was especially pleasing for Abesque to have helped Hillgrove achieve producer status given Abesque’s long association with both the project and Hillgrove, dating back to late 2007. The Onslow Salt Washplant Project , located outside of the town of Onslow in North West

WA achieved practical completion in mid November 2011, with design capacity and specification product being achieved within the first two weeks of operation. The combined value of the above two completed contracts was approximately $90M.

Also importantly during the period Abesque was awarded two new EPC contracts to the value of approximately $70M, these being the Shark Bay Salt Washplant Upgrade for Shark Bay Resources Pty Ltd and the Mt Weld Rare Earths Concentrator Expansion for Mt Weld Mining Pty Ltd (a wholly owned subsidiary of Lynas Corporation Ltd). The award of these contracts was particularly satisfying as they represent repeat

business from both of the respective clients, with Abesque having previously delivered major projects for these organisations during calendar year 2011.

Along with the above completed projects and new contract awards Abesque also continued to make good progress on other major projects currently being executed. Construction works commenced in September 2011 on the DeGrussa Copper Project for Sandfire Resources NL, located near Meekatharra in WA, with completion scheduled for August 2012.

The Furnace Upgrade Project for Simcoa Operations Pty Ltd, located near Bunbury in WA was entering the pre-commissioning stage at the end of the period with mechanical and electrical commissioning expected to commence in the first quarter of 2012.

Engineering works continued on the Obuasi South Treatment Plant Makeover Project for AngloGold Ashanti (Ghana) Ltd (AGAG), located in central Ghana. The engineering design activities for this project are being carried out from Abesque’s head office in Perth with site based Abesque personnel providing technical support from the operation. At the end of the period the engineering definition for several

of the major upgrade projects for this operation were advanced to the stage where associated EPC contracts were being finalised for execution with AGAG. These works will be contracted to Cimeco with Abesque providing the process design, engineering and project management support.

Abesque is carrying out several studies for existing and potential new operations for major mining houses as the study group within Abesque continues to grow and together with the current project workload Abesque can look forward to a busy 2012. F

or p

erso

nal u

se o

nly

14


Webb Construction West Africa Limited (Webb)Webb continued minor construction, maintenance, fabrication and labour hire services to Avocet’s Inata project in Burkina Faso and for Resolute Resource’s Ltd Syama Gold mine in Mali. In November 2011 the company also completed structural, mechanical, piping, electrical and instrumentation packages for London Mining’s Marampa Phase 1A Iron Ore Project in Sierra Leone. London Mining’s Phase 1B, a replication of the previous Phase 1A is likely to commence in May 2012 and Webb is currently negotiating the terms and conditions of contract for these works. Webb’s construction history in Ghana dates back to the 1980’s but more competitive market dynamics and recent exploration success for international companies in neighbouring countries for gold, base metals, oil and gas and iron ore has necessitated a strategic review of the Company’s West African operations.

Accordingly, and in part due to the high Australian dollar, the tyranny of distance and the high cost of Australian expatriate labour abroad

the Company has, (subsequent to 31 December 2011) opened an office in Johannesburg to service the whole African marketplace which management believe holds significant potential for credible mineral resource related EPC and/or construct only contractors. The recent appointment of Mr Richard van den Barg (ex JSE Listed Company Group Five Ltd) as Managing Director of our African operations and who has access and knowledge of a more cost effective resource base should ensure the Company’s continuing competiveness and success in this burgeoning marketplace.

This strategic initiative when coupled with a substantial new base load of works emanating from Abesque and Cimeco’s reimbursable engineering and construction contracts for the Obuasi South Treatment Plant Makeover Project for AngloGold Ashanti should also ensure a solid base for Webb and early profitability of the new subsidiary. Many other opportunities, particularly in the oil and gas industries are emerging as the Ghana government requires suppliers and contractors to provide significant local content for the development of their, now in

production offshore oil fields.

Several other opportunities in the mining sector are also being explored, many with Western Australian connections and the company is being repositioned to take advantage of these. A substantial investment in new plant and equipment is being made to support this expected growth including the purchase of several new large cranes, trucks, and other portable construction equipment.

Clough Forge Pty Ltd (CFPL)CFPL is an incorporated 50/50 joint venture between Clough Projects Pty Ltd and Forge Group Ltd, formed to service Australian EPC projects in the mineral, oil and gas and infrastructure industries. On the 24 August 2011 a joint release advised the ASX of the award to CFPL of an Early Contractor Involvement (ECI) contract with Roy Hills Infrastructure Pty Ltd for the Port Materials Handling Facilities (Package 3) for the proposed 55Mtpa Roy Hills Iron Ore Project (RHIO). The scope of works involved a detailed review of all preliminary and Bankable Feasibility Study (BFS) documentation in a collaborative, open book approach with the client to assist with the development of a final scope, schedule and contractual basis in order to deliver a price for the construction phase of the Package 3 works.

On 18 January 2012, South Korean steel maker POSCO made its biggest investment in resources by paying 1.8 trillion won ($1.6 billion) to expand its stake in RHIO.

On 7 February 2012 CFPL received a further variation order for approximately $15.5m to provide more detailed and specific works as an extension to its initial ECI agreement. CFPL is very proud to be working on such an important project with a company such as RHH. This new variation order is most pleasing as it continues to reaffirm the JV’s position to present a compelling case to the client for the construction phase of Package 3.

Directors’ Report Extract from Half Yearly Report continued

For

per

sona

l use

onl

y

15

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE HALF-YEAR ENDED 31 DECEMBER 2011 Consolidated

Half-year ended 31 December

2011

Half-year ended 31 December

2010

$ $

Revenue 227,800,009 203,895,658

Changes in inventories of finished goods and work in progress 2,687 10,826

Materials, plant and subcontractor costs (111,786,606) (87,607,107)

Employee benefits expense (78,508,242) (79,964,031)

Depreciation and amortisation expense (2,891,036) (1,934,216)

Finance costs (443,951) (303,938)

Share of profit of associates and jointly controlled entities 67,867 -

Impairment loss - (303,738)

Other expenses (4,010,822) (3,571,302)

Profit before tax 30,229,906 30,222,152

Income tax expense (8,973,605) (8,990,802)

Profit for the period 21,256,301 21,231,350

Other comprehensive income

Exchange differences arising on translation of foreign operations 38,689 (497,870)

Other comprehensive income for the period (net of tax) 38,689 (497,870)

Total comprehensive income for the period 21,294,990 20,733,480

Profit attributable to members of the parent entity 21,256,301 21,231,350

Total comprehensive income attributable to members of the parent entity 21,294,990 20,733,480

Earnings per share

Basic earnings per share (cents) 25.54 26.48

Diluted earnings per share (cents) 24.73 24.64

For

per

sona

l use

onl

y

16


CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2011

Consolidated

31 December 2011

30 June 2011

$ $

Current Assets

Cash and cash equivalents 93,091,186 78,284,806

Trade and other receivables 105,696,937 49,542,254

Inventories 25,071,749 29,621,502

Other assets 1,804,904 1,574,211

Total Current Assets 225,664,776 159,022,773

Non-Current Assets

Trade and other receivables 3,057,624 -

Property, plant and equipment 44,209,464 36,576,870

Deferred tax assets 1,838,034 2,042,771

Goodwill 15,580,440 15,580,440

Other intangible assets 62,128 56,816

Total Non-Current Assets 64,747,690 54,256,897

Total Assets 290,412,466 213,279,670

Current Liabilities

Trade and other payables 133,862,167 72,845,172

Borrowings 4,392,643 3,271,641

Current tax liabilities 3,873,989 6,387,133

Provisions 794,726 754,599

Total Current Liabilities 142,923,525 83,258,545

Non-Current Liabilities

Borrowings 6,941,149 4,900,534

Deferred tax liabilities 22,786 51,414

Investments accounted for using the equity method 439,742 307,608

Provisions 399,418 299,269

Total Non-Current Liabilities 7,803,095 5,558,825

Total Liabilities 150,726,620 88,817,370

Net Assets 139,685,846 124,462,300

Equity

Issued capital 44,480,046 44,294,308

Reserves (872,958) (911,648)

Retained earnings 96,078,758 81,079,640

Total Equity 139,685,846 124,462,300

For

per

sona

l use

onl

y

17

FINANCIAL PERFORMANCEFi

nanc

ial P

erfo

rman

ceSh

are

Perf

orm

ance

450

350

400

300

250

200

Forge Group Revenue

A$

MIL

LIO

N

150

100

50

0

1st Half 2nd Half

FY07

38.0

37.0

75.0

FY08

41.0

87.0

128.0

FY09

96.0

73.0

169.0

FY10

112.0

135.0

247.0

FY11

203.7

221.0

424.7

FY12

227.8

Forge Group Revenue Forge Group Net Profit Before Tax

60

50

40

30

20

10

Forge Group Net Profit Before Tax

A$

MIL

LIO

N

0FY07

2.34.0

FY08

4.3

4.99.2

FY09

7.2

9.3

16.5

FY10

19.0

21.4

40.4

FY11

26.5

30.2

56.7

FY12

30.2

1st Half 2nd Half

Forge Group EBITDA Forge Group Net Profit After Tax

1st Half 2nd Half

70

60

50

40

30

20

10

Forge Group EBITDA

A$

MIL

LIO

N

F0

FY11

30.1

32.5

62.6

FY12

33.6

FY10

20.6

24.3

44.9

FY09

9.0

10.9

19.9

8FY0

4.9

6.5

11.4

Y07

2.82.2

5.0

40

30

35

25

20

15

10

5

Forge Group Net Profit After Tax

A$

MIL

LIO

N

0FY07

1.11.6

2.7

FY08

2.7

5.1

7.8

FY09

5.1

10.5

15.6

FY10

14.8

14.7

29.5

FY11

17.6

21.2

38.8

FY12

21.3

1st Half 2nd Half

Forge Group Diluted EPS (Cents) Comparative Share Price Movement

1st Half 2nd Half

50

35

40

45

30

25

20

Forge Group Diluted EPS (Cents)

15

10

5

0FY08

4.78

6.85

11.63

FY09

6.68

13.85

20.53

FY10

19.52

18.13

37.65

FY11

24.64

20.60

45.24

FY12

24.73

CE

NT

S

180%

120%

140%

160%

100%

80%

60%

Comparative Share Price Movement

40%

20%

0%Jul Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Forge Group Share Price Return % ASX S&P200 Share Price Return %

Forge Group Share Price Movement Dividends (Fully Franked)8.00

6.00

7.00

5.00

4.00

3.00

2.00

1.00

0.00

SH

AR

E P

RIC

E $

1HFY12

4.10

FY08

0.50

1.45

FY10

0.40

3.10

FY11

2.61

6.93

5.93

Share Price Low $ Share Price High $ Share Price at 30 June $

FY09

0.80

0.15

14.0

12.0

10.0

8.0

6.0

4.0

2.0

Dividends (Fully Franked)

0.0

Interim Final

FY11

7.5

4.0

11.5

FY12

6.0

FY10

2.0

5.0

7.0

FY09

3.0

3.0

CE

NT

S

0.78

2.69

5.46

0.46

160%

100%

120%

140%

80%

60%

40%

20%

0%

-20%Jul A S O N D J F M A M J J A S O N D J F M10 11 12

Forge Group Share Price Return % ASX S&P200 Share Price Return %

For

per

sona

l use

onl

y

NEXT EDITIONNEW OFFICES

Æ Queensland Offices

Æ Bibra Lake Facility

Æ North West Karratha Office

Æ Johannesburg Office

Æ Nedlands Offices

ADDITIONS TO PLANT

& EQUIPMENT

Æ 600T Crawler Crane

Æ 60m Concrete Pump Trucks

Æ >$30m Capex 2011–2012

Disclaimer: This presentation has been prepared by the management of Forge Group Ltd (the Company) for the benefit of brokers, analysts and investors and not as specific advice to any particular party or person. The information is based on publicly available information, internally developed data and other sources. Where an opinion is expressed in this document it is based on assumptions and limitations mentioned herein and are an expression of present opinions only. No warranties or representations can be made as to the accuracy, validity, completeness or reliability of the information. The Company disclaims and excludes all liability (to the extent permitted by law), for loses, claims, damages, costs and expenses of whatever nature arising in any way out of or in connection with the information, its accuracy, completeness or by reason of reliance by any person on any of it. Where the Company expresses or implies an expectation or belief as to the success of future developments, such expectations or belief is expressed in good faith and believed to have a reasonable basis. However, such forecasts are subject to risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed, projected or implied by forecasts made in this presentation. The Company does not have any obligation to advise any person if it becomes aware of any inaccuracy in or from any forecast or to update such forecast

ABN: 58 065 464 226

For

per

sona

l use

onl

y

Documents

For personal use only - ASX · 2012. 3. 7. · ASX on the 13th January 2011 best describe the benefits that the Board see in the acquisition of CTEC and are repeated here for ease