Matrix Composites and Engineering Limited

Friday, September 17th, 2010

Since listing on the Australian Securities Exchange last November, Matrix Composites and Engineering Limited (ASX:MCE) has seen its share price increase over 350%. This staggering increase in share price has been due to exceptional operational performance. Its recent FY10 full year Net Profit after Tax exceeding prospectus forecasts by 140%. The question we hear MyClime members asking is “Have me missed the boat or is there still value on offer?”

The Company

Matrix was formed in 1982 by Maxwell Begley as a heavy engineering business to service the offshore oil and gas industry. Maxwell Begley still owns 36.1% of the company and remains a board member. His son Aaron (the current CEO) owns 5.4%.

In 1996, the company established its Advanced Materials division. The Advanced Materials Division supplies buoyancy systems, pipeline insulation, pipeline and riser protection, riser ancillaries and a range of down hole products to the offshore oil & gas industry. It also supplies product solutions for military and other commercial applications. The divisions principal product is the riser buoyancy module, used in deep-sea oil exploration drilling. A riser is a series of pipes, which when joined together creates the drill string. These drill strings span from the drilling vessel to the blow out preventer on the seabed. Due to the extreme weight of the riser and the drill rods in deep-sea exploration, buoyancy is attached to the riser to give the unit uplift. The modules produced by Matrix provide this buoyancy.

The company also operates a Heavy Engineering Division. This division supplies connectors, conductors and casings, offshore structures, subsea skids and manifolds, offshore cranes and winches together with associated testing, refurbishment and maintenance to the oil & gas industry. It also supplies a range of heavy material handling equipment for iron ore, rollers and pulleys, screens and filters, winches and other processing equipment to the mining and mineral processing industries.

In 1999, Matrix received and completed its first orders for riser buoyancy modules, a product which has recently led to tremendous growth for the company.

Consequently the company expanded their plant significantly in 2005 and a full scale underwater pressure testing chamber was constructed. This chamber was critical for the company and established it as a world class producer of riser buoyancy modules for the deepwater oil and gas industry.

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Clime Private Wealth Pty Limited | ABN 87 617 235 168 Is a Corporate Authorised Representative | CAR 001263076 of Clime Asset Management Pty Limited | AFSL 221146

The information provided on this webpage and the rest of is intended for general use only. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein. Please consider our Information Memorandum, Product Disclosure Statement and Financial Services Guide before investing in one of our products. Past performance is no guarantee of future returns.
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