About company
Capital Drilling is an emerging and developing markets focused drilling services company that provides exploration, development,
grade control and blast hole drilling services to mineral exploration and mining companies. Our operations span 4 continents with
activities in Africa, (Eastern) Europe, Asia and Latin America. The Company currently has a fleet of over 70 drilling rigs and
operates one of the youngest fleets in the industry.

Since inception in 2004, the Company has developed an enviable reputation for its ability to deliver safe, professional and reliable
drilling services in remote locations and developing market countries. This ability has allowed the Company to attract and retain
some of the world’s largest mining and exploration companies as major long term clients.

The Company began operations in the Lake Victoria goldfields region of Tanzania and has since expanded into Zambia, Egypt,
the Democratic Republic of Congo, Pakistan, Armenia, Serbia, Papua New Guinea, Mozambique, Hungary, Eritrea, Chile and
most recently Mauritania. Over this time the workforce has expanded to more than 800 full time employees.

The team at Capital Drilling provides decades of combined experience operating in emerging markets and strives to deliver the
highest standards in safety, performance and quality. We pride ourselves on delivering “developed market standards for
emerging market operations”.

Higher gearing
The Company has been using about $15m cash in expansion lately and the market has not responded accordingly,
but provided it gets a rise at the end on the revenue, the higher gearing should be alright.

Bounce on share price
I understand a holder is being forced to liquidate their position recently and that is why the share price is so depressed,
yet for the last couple days the good news from Centamin has managed to rubbed into Capital and now only needs the
good news of the Sukary mine resuming drilling ( contributes about 25% of revenue ) for the share price bounce from 21.25p

Recent comments
Investors Chronicle: investors chronicle/Capital-Drilling-still-buoyant
Growth Company Investor: growth company/mining-boom-boosts-capital-drilling

Wrong thread.

Latest broker views

Date Broker New target Recomm.
13 Dec Liberum Capital N/A Buy
31 Oct Canaccord... 59.00 Buy
24 Oct Canaccord... 59.00 Buy
21 Aug Canaccord... 85.00 Buy

Have now decided to move forward again after some earlier profit taking, and at best of the day 22.50p

Some recent comments after results

Mining boom boosts Capital Drilling / 22/08/2011 / Robert Tyerman

Drill rig specialist Capital Drilling (CAPD) has hoisted first-half pre-tax profits 130 per cent to $10.6 million (£6.6 million) and won two big contracts. The fully-listed company, whose clients are predominantly large and 'mid-tier' mining companies operating in emerging markets, more than doubled turnover to $59.4 million in the six months to June and pushed earnings up 77 per cent to 6.4 cents (4p) a share.

Executive chairman Jamie Boyton says the second quarter proved 'really good' for Capital, which won its first contracts with 'gobal majors', clinching contracts mining giant BHP Billiton in Chile and Ethiopia and with Riversdale, now part of Rio Tinto, in Mozambique, besides deals with Kinross Gold in Ghana and Mauritania. The company, which spent $2 million overhauling three rigs, adding four new rigs and de-commissioning one, ended June with 77 rigs, with rig use up from 79 per cent in the first quarter to 83 per cent in the second, against 60 per cent in the first half of 2010.

Boyton, who suggests Capital achieves cash flow breakeven at between 50 and 60 per cent rig use and sees 85 to 90 per cent use as virtual full capacity, says the trick for success is to pick customers with long-life assets and with costs well below peak raw material prices. He points out 30 per cent of the company's contacts are based on payment per metre drilled and last for six to12 months, while 30 per cent are annual contracts and 40 per cent are 'multi-year' deals.

Capital, which ended June with cash down $18.2 million to $12.8 million, achieves a 20 per cent return on equity but does not pay dividends, seeing itself as 'very much a growth company', according to Boyton. Analysts see the company lifting full-year pre-tax profits 63 per cent to $20.9 million, for earnings of 12.8 cents (8p) a share.

Capital's founders own some 70 per cent of the shares, which have risen from 67p when Growth Company Investor recommended them last autumn to 86.25p now, having touched 108.75p. On a prospective price/earnings ratio of 10.8 and valuing the company at £116 million, they look worth holding still.

----------------------

Capital Drilling on course / 21 AUGUST 12

Fears of a slowdown in mining investment has seen shares in Capital Drilling slump by a third since its full-year results in March. But that looks overdone. While the company admitted that it had seen moderating demand so far this year, it still delivered a 20 per cent increase in operating profit thanks to a 28 per cent jump in monthly average rig revenues. And having strengthened its management team and balance sheet, the company looks well positioned to continue its expansion.

The drilling services company added another five rigs in the first half to take the total fleet to 90, and although average fleet utilisation rates dipped 6 percentage points to 75 per cent, that was more the result of equipment being moved around than any softening of demand. In fact, new contracts were secured with host of major miners including Antofagasta and Centamin Egypt, and chief executive Geoff Fardell remains confident that investment in new services such as underground drilling and geographic expansion would help it pick up further business. Mr Fardell also pointed out that although mining groups were scaling back capital expenditure, that would hit new projects rather than the mature producing assets that Capital is focused on.

Broker Liberum expects underlying full year pre-tax profits of $25.6m and EPS of 14.6¢ (from $21.7m and 13¢ in 2011).

An interesting report after the Interim results .........

"Capital Drilling
A Very Good Half Year

The figures are in, and it’s official: this has been a very good half year indeed for Capital Drilling. (FTSE:CAPD)

Profit is up across the board, but then that’s nothing particularly new for the Singapore-headquartered drilling contractor.

“It’s another good result on previous good results since the company’s been listed on the stock exchange,” says CEO Geoff Fardell “We’ve had continuing record halves.”

Fardell, installed as CEO only since the start of the calendar year, is self-effacing about his appointment having anything to do with such stellar results, describing the results as a ”team effort.”

“It’s a growth trajectory the company’s continuing and I’m lucky enough to come on board, but its continuing the company’s strategy and performance.”

Key to this trajectory is Capital’s skill at keeping the customer satisfied, as evident in its impressive roster of repeat customers.

This half alone has seen contract extensions or expansions from Barrick Gold Corporation in Zambia, Kinross in Ghana and most recently, the contract extension for H2 2012 from Xstrata in Tanzania.

Even the new contract wins from the likes of Antofagasta and Compania Minera del Pacifico in Chile and Continental Nickel in Tanzania, while technically new relationships, spring from pre-existing relationships.

“We knew some of the guys [in those new projects] from previous projects,” says Brian Rudd, the firm’s Executive Director. “The people we deal with, our reputation has gone with us as they have travelled into other companies. Likewise with [Antofagasta and Compania Minera del Pacifico] we were working for BHP and people had spread the word that we were doing a good job for BHP and we were invited to tender.

Clearly Capital’s reputation precedes it.

“You get an industry reputation,” Rudd says. “People know of you, know your capability.”

Noted in the results presentation is the Importance placed on ‘quality clients’ that is, ‘major and mid-tier mining houses with strong balance sheets, quality assets and positive cash flows.’ And this half, 79 per cent of the client base was composed of majors, up from 63 per cent for 2011.

While the company has historically had somewhere between 40 per cent and 50 per cent of its revenue from major blue chip clients, more recently Capital has made a concerted effort to grow this part of their customer base, so to have almost 80 per cent of earnings tied to big mining houses has to be seen as a win.

Fardell mentions another element of this strategy: with some clients holding long-life assets that could keep producing for decades, doing good work oftentimes means being kept on board for years.

“As the mine grows, we tend to grow with the customer.”

Rudd puts this success down to several factors “the quality of our equipment, the quality of our operation, our safety track record, and our competitive pricing.”

The age of Capital’s fleet is very young by industry standards, a state of affairs maintained by the constant addition of new rigs. The last half saw six new rigs added and one retired, and plans for more of the same in the second half.

The company, founded in Tanzania “because the founders had a lot of experience in Africa, they knew the market and they had established relationships with people who ran mines in certain countries in Africa,” says Fardell, has carved a niche for itself with the stated strategic vision of ‘offering first world service in developing markets’

Rudd says that servicing developing nations is a core competency.

“We’ve developed the capability of entering into remote locations in emerging and developing markets to set up operations to service clients, we know how to do it.”

“The key is supporting and providing efficient logistics to your operations,” says Rudd. “We specialise in that.”

While Rudd reiterates the youth of the fleet and the safety culture as important points he points also to the importance of “attracting, training and developing our staff which includes, in all of these emerging markets, a large proportion of local nationals in each country where we operate. Community relations are quite a big deal in the areas we work in.”

This half has seen Capital take on underground drilling for the first time, a new service that Rudd sees as an additional means of giving clients excellent service.

“One of the key things about underground drilling, it is excellent because we’re able to offer an expanded service to our existing blue chip client base. We see more growth in underground drilling.”

It’s another field in which Capital Drilling is sure to excel.

“The founders started the company in 2004 with a couple of rigs,” says Ferdell, “and now we’re a financial success with 90 rigs, 1500 employees and still coming out with record results.” "

september_12/capital_drilling_a_very_good_half_year

Further move up today as buyers are returning on this undervalue stock

Filling the GAP today on a spike to 24.875p just now

One reason for the early rise was expectatrions now reality .........

Market Update - Resumption of Operations

Centamin is pleased to confirm that, following the recently-announced export of gold and resumption of fuel supply, operations have now resumed at Sukari.

After the good news from CEY the shares spiked to 26.75p and naturally profit taking took place, but now they are on the bounce again

Though a small rise is something to appreciate on a day like today the market is well down and after marked lower early on the morning

Another well deserve rise after some late buy trades