Enterprise Group’s Divisions on a Roll
After announcing last month that its Artic Therm division was operating near capacity, Enterprise Group (E – $0.24 & 3EO – €0.152) now said that its infrastructure and utility construction division, T.C. Backhoe & Directional Drilling, has secured the continuation of a long term arrangement with a major electrical supplier in Canada. T.C. Backhoe will continue to provide new construction and maintenance services around Edmonton, Canada.
Moreover, that same company also awarded T.C. Backhoe a new long term contract for similar services on the other side of Edmonton. The Company’s management said that this new arrangement will have a meaningful impact to TC’s revenues.
A large portion of the existing underground utility infrastructure in the Province of Alberta is rapidly aging. In fact, in some areas the infrastructure is beginning to fail as it’s beyond its intended useful life. In response to this, the major stakeholders in the industry are implementing large scale, ongoing repair and replacement programs that are essential for continued growth in Alberta.
In addition to the repair and maintenance programs, the continuing development of new industrial, commercial and residential properties in the province requires the installation of new infrastructure, such as full underground services.
The Artic Therm division, an industry leader in renting flameless heaters to the construction and oil & gas industries, reports higher than historical utilization of its rental fleet this winter season. A new contract was also signed with the world’s largest producer of bitumen to rent out one its 3 million BTU heating units for a pipeline thermal expansion project near Fort McMurray.
In addition, E One Limited, Enterprise’s heavy equipment rental division, reports a higher than historical utilization rate of its rental fleet.
The Company announced as well that it appointed Mr. Warren Cabral as its new Chief Financial Officer. Mr. Cabral was most recently CFO for one of Canada’s largest institutional investment fund managers and he has extensive hands-on experience implementing and managing change in complex environments.
We’ve seen nothing but good news lately from Enterprise Group. It’s divisions are operating at or near capacity, which should lead to strong financials.
Enterprise Group’s share price is already up 60% since our initial recommendation late May 2012, but we believe there’s plenty of room for more gains in the coming quarters.
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