Aecon Group Inc T.ARE

Status today

[Gabriel]

Below is my short term horizon only. I expect higher than that in the next 5 years. I am more confident and assured with the team in place than I have ever been with what I heard and read this week. 

1. Repurchase of up to 3.1m shares will put upward pressure on stock price.
2. Every day gets us closer to the completion of the LSTK and doubling the backlog which justifies a construction revenue of 4-5B in 2025 at 8% margin for an EBITDA of 320-400m for construction. Margin kept at 8% regardless of collaborative projects. Value of 6 x 320-400 /60m = 32-40$/sh.
3. Concession had an EBITDA of 95m TTM. Fair to assume 100m for 2025 considering past growth including the 2 airports and others in the pipeline. 6-7.5  x100m/60 =10-12$
4. FVE 24-48 months = 42-52$ with a mid-point at 47$. We are trading at a third of the fair value in 2025 or 2026.

[Henrye]

G- Nice clean summary! Everyone should read your post and re read it,PRINT  it and attach on the fridge! To remind all everyday NOT TO BLINK and succumb to temptation to sell for a quick small profit. This printed copy should remind you and encourage all to invest any spare change you may have consistently over next 3 years . All would be choosing a great company, well diversified over

[Dibah420]

"The only obstacle is replacing their retiring labour force and talent." I'm prepared to nominate G to the Board.  Specifically,  Chair, Risk Assessment. Those Jul 22 buys are getting more and more satisfying. Cheers

[Gabriel]

Thanks Dibah. We have very smart people on this board which is why I keep posting. I have requested and I am in communication with the chairman as we speak. We have just replaced three directors and there are no vacancies at the moment but patience is my third virtue.

[Ronbromleygross]

Thanks Gabriel for that very insightful and your very close discussions with the Aecon front line executives.  Between that comment and your earlier comment regarding the backlog of projects not yet booked or disclosed as contract wins based on the PPT slides,   things are truly starting to click and this jigsaw puzzle is starting to make sense for me.   As a latecomer here I am

[Alexcanada]

Always appreciated Gabriel !

[LCcapital]

Hi Gabriel One question I have not been able to find the answer to: I have seen reference to the backlog doubling: Can you provide some color here - how is this possible? Are there projects committed but not yet booked into the backlog, for some reason? Why wouldn't this work be included in the existing backlog?  Or are we assuming Aecon picks up quite a few projects in the coming

[Gabriel]

Hello LC,  See top of slide 5.  They are all detailed on page 6 with their respective total budgets. https://aeconcomfiles.blob.core.windows.net/web-live/docs/default-source/investor-briefcase/are---q2-2024-ir-presentation.pdf

[Gabriel]

Why budgets are not set yet for all of them on slide 6: The designs of these collaborative projects are ongoing so the precise estimates are not out as we speak but the total rough estimate for our share of those collaborative projects is estimated roughly at about the same as the backlog. With a much more advantageous margin.  The concept of collaborative projects (all stakeholders working

[LCcapital]

That makes sense - and I see now where we are getting the estimated future backlog amount from. I skiped right past the header: "Current backlog excludes Aecon’s share of the GO Expansion OnCorr, Scarborough Subway Extension SRS, Darlington SMR, Contrecoeur Terminal, U.S Virgin Islands Airports projects" Appreciate as always your assistance!