October 5, 2017 (Investorideas.com Newswire) Commentary on Enterprise Group, Inc. (TSX: E) - The media is becoming fixated on the repair/rebuilding of just about every public piece of infrastructure in the known universe. And that's a good thing.
Not to mention replacing pipes of all varieties (oil, water, gas etc.) and the attendant support structures. Infrastructure bellwethers such as SNC Lavalin (TSX: SNC) is trading near it's 52-week high at C$56, up from C$40 on Jan 1, 2016. Others and US peers have experienced comparable growth.
Not so for some juniors.
A Pure Infrastructure Play and More: Only C$0.30 a Share…
Calgary Tunneling (CT) is a leading infrastructure design, developer and construction company that appears to have been mispriced by markets. Under the Enterprise Group ( TSX: E) umbrella, it has been stained by the 'low oil price' watusi that wrongly impacts a lot of quality juniors, to a greater or lesser degree.
Even though you have to buy the parent Enterprise Group to get exposure to CT, the other three subsidiaries noted below are all impressive in their own right. CT contributes about 1/3 of annual revenues to parent Enterprise Group.
"Investors make a costly mistake tying CT's fortunes to vagaries of the oil and price fluctuations. Only 15% of our revenues are derived from the oil and gas sector. As a matter of fact, we are looking for a 40% revenue increase next year and that does not fully incorporate our ambitious expansion plans. We plan to grow the Company from a successful regional Western Canadian company to a major national player. Initially that growth on the BC lower mainland markets and those of Southern Ontario," states Stephen Kelly, CT Operations Manager.
Kelly goes on to mention that those two opportunities alone are massive, as they have found customers welcoming of their approach, professionalism and competitive costing. He had noticed 'supplier fatigue' in the region and an alternative approach appears to be a great revenue opportunity. In Southern Ontario, there really is no competition at least in CT's method of work, expertise, experience and costing.
Safety and environmental concerns are key to CT and Enterprise. So much so that CT's WCB premiums and related groups are actually at a significant discount to its peers.
Trenches Are So 90's.
The increasing use of trenchless technologies throughout the world is a direct result of the high economic, social, and environmental costs of traditional trenching installations. Increasingly throughout the world, existing and new methods of trenchless technology are replacing those disruptions, often at a fraction of the economic and social costs, and with minimal impact on the environment.
CT's business mix is 85% water, sewage and rail work and 15% oil and gas. As stated, wrongly stained. Society always needs municipal and provincial/state infrastructure.
Canadian Fed Government Budget 2017 confirms that the it will be making additional infrastructure investments of C$81-billion over the next 11 years, starting in 2017-18, in support of public transit, green infrastructure, social infrastructure, transportation supporting international trade, projects that support Canada's rural and northern communities, and now smart cities.
Money, Money, Money
That money is starting to hit Canadian municipal coffers and the sector is seeing a significant rise in not only business planned, but also optimism for the future; always a good thing. CT, as parent Enterprise through its other subsidiaries, Artic Therm,Hart Oilfield and Westar Rentals have their collective ears to the ground and are seeing both business and incoming enquiries rising nicely; not a tsunami as yet, but growing weekly.
The days of digging trenches, laying pipe and chewing up the environment are gone. Enterprise, through CT, delivers the very best in state of the art, cost effective services; numbering roughly a dozen solutions as well as customizable. The parent Company, Enterprise, has a breakup of about C$0.85 cents and is trading at C$0.30.
That said, Enterprise's daily volumes are increasing, so it appears savvy investors are looking deeper. They will quickly realize the myriad of competitive advantages.
It would take way more ink to dig into all of CT's drilling technologies. From utility installation to fluid movement to flood abatement, Horizontal Auguring is used to minimize traffic disruption, ground disturbance, and environmental impact.
This policy is extremely important in areas of high population density, existing utility installations, and sensitive environmental areas.
Stephen Kelly states; "Trenchless tunneling is an environmentally superior method of burying infrastructure. By reducing, or eliminating surface disturbance, CT dramatically lowers the environmental footprint of our projects. Our continuing efforts to meet or exceed environmental guidelines and best practices in our theater of operations will continue to show our sincere commitment to social and environmental responsibility."
As part of a highly experienced management team, Stephen Kelly has over 35 years of in-country and international experience in safety. Since 1980 Stephen has focused on the implementation policies, practices & procedures. His familiarity with all aspects of the industry makes him an invaluable asset to the Company when it comes to compliance, site safety, and proper job completion, project planning & Safety program design.
Enterprise Group, Inc. is a consolidator of construction services companies operating in the energy, utility and transportation infrastructure industries. The Company's focus is primarily construction services and specialized equipment rental. The Company's strategy is to acquire complementary service companies in Western Canada, consolidating capital, management, and human resources to support continued growth. Enterprise acquired of Artic Therm International Ltd. in September 2012, Calgary Tunnelling & Horizontal Augering Ltd. in June 2013, Hart Oilfield Rentals in January 2014, and Westar Oilfield Rentals Inc. in October 2014. More information is available at the Company's website, www.enterprisegrp.ca. Also, today's filings can be found on www.sedar.com
For questions or additional information, please contact:
Leonard Jaroszuk: President & CEO , or
Desmo nd O'Kell: Senior Vice - President
contact@enterprisegrp.ca
780 - 418 - 4400
Forward Looking Information
Certain statements contained in this news release constitute forward - looking information. These statements relate to future events or the Compan y's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressio ns and statements relating to matters that are not historical facts are intended to identify forward - looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. The Company's Annual Information Form and other do cuments filed with securities regulatory author ities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that co uld influence actual results and which are incorporated herein by reference. The Company disclaims any intention or obligation to p ublicly update or revise any forward - looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.
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