Fleetwood scores deal with BHPB
FLEETWOOD Corporation has continued its run of success in the resource sector, winning a contract to manufacture and install the accommodation village for BHP Billiton’s $1.4 billion Ravensthorpe nickel project.
The contract has a total value of $22 million.
Fleetwood has won a succession of accommodation contracts for big resource projects, including the Darwin LNG and Burrup Fertilisers projects, helping to drive its earnings higher.
It has also been expanding its recreational vehicles business, with the latest move being last month’s $1.5 million acquisition of Melbourne-based Rainbow Transportable Homes.
In addition, it has agreed to sell its six caravan parks to a new property trust managed by Aspen Group.
The $28 million sale of its properties will strengthen the company’s balance sheet and allow it to pay a higher dividend.
Bell Potter Securities analyst Matthew Ward believes there is more upside for Fleetwood shareholders, despite a strong rise in its share price over the past two years.
He rates the stock as a ‘buy’ and has a 12-month price target of $8.09, compared with the current share price of about $7.40.
Mr Ward is forecasting a full year dividend of 22.5 cents per share for the 2003-04 financial year, up from 14 cents last financial year.
Fleetwood will immediately start manufacturing the accommodation units for the Ravensthorpe village, which will be for 1,000 people.
It expects to complete the village by January 2005, with rental over the subsequent two-year period.
Funding for the contract will be from Fleetwood’s existing facilities.