Business Description:
Austal (ASB) designs and manufactures customised aluminium defence and commercial vessels and its customers include many of the world’s leading ferry operators and defence forces. Austal’s product range includes passenger and vehicle-passenger ferries, patrol boats, theatre support vessels, combat ships, multi-role vessels and luxury private live-aboards. Austal is also an established provider of worldwide vessel maintenance and management services.

Strategy Analysis:
ASB offers a diversified range of vessels across a wide geographic market. Its current focus is on commercial and defence shipbuilding but a strong A$ and soft European ferry market is forcing a scale down in commercial shipbuilding in Australia and a refocus on defence work. The newly acquired Philippines shipyard will focus on constructing smaller commercial vessels at a more competitive cost. Recent defence contract wins should lessen earnings volatility, as they tend to span over a few years. The establishment of a Service business with long-term maintenance contracts will also provide another stable revenue stream. Austal reported NPAT down 41% to $21.89m for the year ended 30 June 2011. Revenue from ordinary activities were $503.86m, down 3.37% from last year. Diluted EPS was 11.9 cents compared to 20.2 cents last year. The net operating cash inflow was $64.28m compared to an outflow of $95.29m in the pcp. The final dividend declared was 6 cents, taking the full year dividend to 6 cents compared with 6 cents last year.