Business Description:
Emeco Holdings Limited (EHL) holds leading positions in the earthmoving rental equipment markets with its key focus being the mining industry. Its primary operations are in Australia, but it also has a major presence in Indonesia and operations in Canada.

Strategy Analysis:
EHL seeks consolidation of its leading position in the rental of heavy earthmoving equipment in Australia and Indonesia. It looks to expand its Canadian position, supported by a positive outlook for oil sands activity. The weak European and US businesses have been exited. EHL also exited its Victorian civil infrastructure equipment rental business. The company is again looking to expand geographically and is entering the copper rich region of Chile which has a strong volume growth outlook. The shift toward larger and longer term mining projects improves the potential for wider margin and longer term deals. A strategy to expand the fleet with a particular focus on larger vehicles i.e. (240 tonne trucks) is also helping profitability. Emeco Holdings reported NPAT of $49.6m for the year ended 30 June 2011. Revenues from ordinary activities were $515.5m, up 11.7% from last year. The improvement in earnings was attributable to higher average rental fleet utilisation of 85% across the year and additional contribution for the investments in large mining equipment. Diluted EPS was 7.9 cents compared to (8.0) cents last year. Net operating cash flow was $214.93m compared to $147.46m last year. The final dividend declared was 3 cents, taking the full year dividend to 10 cents compared with 2 cents last year. The Company reported it has a solid base from which to grow having completed a restructure. In the year ahead, the Company will continue its focus on improving the performance of its existing businesses while pursuing growth.