MACMAHON HOLDINGS LIMITED — M&A Activity 2008

Jun 22, 2008

Monday 23 June 2008

==> picture [107 x 47] intentionally omitted <==

ASX Announcement

Ausdrill Board unable to make a case for not ACCEPTING Macmahon Offer

• No alternative proposed for Ausdrill shareholders

• Ausdrill share price highly likely to drop if Macmahon bid lapses

• Ausdrill’s Board argues that the company is undervalued but chooses not to provide an Independent Expert’s valuation

• Case for ACCEPTING now even more compelling

On 21 May 2008, Macmahon announced a takeover offer for Ausdrill (“the Offer”). Under the Offer, Macmahon is offering Ausdrill shareholders 1.45 Macmahon shares for each of their Ausdrill shares.

Macmahon considers that Ausdrill’s Target’s Statement released on Friday, 20 June 2008 did not address the benefits Ausdrill shareholders are likely to receive if they accept Macmahon’s Offer. Further, Macmahon believes that Ausdrill’s Target’s Statement does not justify its Board’s recommendation that Ausdrill shareholders should reject the Offer.

Macmahon sees nothing in the Ausdrill Target’s Statement which has changed its view that the Offer is attractive for Ausdrill shareholders. Rather, Ausdrill’s justification for rejecting Macmahon’s Offer appears to be based on claims that Ausdrill has “strong future growth prospects”.

Ausdrill’s rejection also fails to recognise that Ausdrill has consistently traded below $2.00 per share except in circumstances where there has either been takeover speculation or an actual takeover offer for the company.

Macmahon Chief Executive Officer, Mr Nick Bowen, said “Ausdrill shareholders should feel disappointed that their Board has not put forward any alternative to Macmahon’s proposal other than the status quo.”

“We continue to believe that a combination of Macmahon and Ausdrill represents an attractive opportunity for Ausdrill shareholders, providing them with benefits from the growth prospects and geographic diversity of the combined business, whilst being exposed to lower levels of operating risk.”

Macmahon urges Ausdrill shareholders to ACCEPT the Offer as soon as possible. Ausdrill shareholders will lose both the benefits outlined in Macmahon’s Bidder’s Statement and Ausdrill’s recent share price improvements resulting from the Offer should the Offer be unsuccessful.

MACMAHON IS A COMPELLING INVESTMENT AND HAS OUTSTANDING GROWTH PROSPECTS

Macmahon is a top tier contract mining and construction company with a strong management team, high quality earnings and excellent growth prospects. Full details of Macmahon, its operations and its growth prospects are set out in Macmahon's Bidder's Statement.

Brokers have consistently appreciated the strong investment case for Macmahon. Nine of the twelve brokers who cover Macmahon have a BUY recommendation on the stock, and there are currently no sell recommendations. Only four brokers (none of them major investment banks) presently provide research on Ausdrill.

Level 3 263 Adelaide Terrace Perth WA 6000 PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au

…2/

Macmahon Holdings Ltd ABN 93 007 634 406

2

Macmahon believes that its equity market rating and the support it receives from the investment community is due to a number of factors including:

• The track record of Macmahon’s management in generating earnings per share growth for shareholders. Macmahon’s FY 2007 earnings per share represented 16% growth on FY 2006. For FY 2008, broker consensus forecast earnings per share for Macmahon is 8.8 cents, an increase from FY 2007 of 38%. Additionally, Macmahon has indicated that it is expecting further organic profit growth for FY 2009 of between 20% and 30%;

• The diversified business of Macmahon, with significant activities in both contract mining and civil construction. Macmahon has successfully established a material presence in the Australian east coast infrastructure market and Macmahon is well positioned to benefit from the expected increases in Australian infrastructure spending;

• Macmahon’s exposure to activities in iron ore and coal, both of which have recently enjoyed significant increases in price based on attractive demand and supply fundamentals. Significant ongoing investment is anticipated in iron ore and coal over the next few years;

• Macmahon’s equity market capitalisation, which is significantly greater than Ausdrill’s. Macmahon is also a member of the S&P / ASX 200 index. Ausdrill is not a member; and

• Macmahon’s disciplined approach to capital management whereby returns to shareholders are maximised whilst maintaining a conservative and flexible balance sheet.

MACMAHON HAS PROVIDED AUSDRILL SHAREHOLDERS WITH A SUBSTANTIAL PREMIUM - AUSDRILL’S SHARE PRICE IS HIGHLY LIKELY TO FALL SIGNIFICANTLY IF THE OFFER IS UNSUCCESSFUL

Prior to the announcement of Macmahon’s Offer, Ausdrill’s shares were trading at $1.95 compared to $2.56 as at 20 June 2008. Macmahon has provided Ausdrill shareholders with a substantial takeover premium. In the absence of a competing bid for Ausdrill, and if Macmahon’s Offer lapses without Macmahon gaining at least 50.1% of acceptances, it is highly likely that Ausdrill’s share price would drop significantly, and could potentially return to pre-Offer levels. The chart below demonstrates that over the last two years Ausdrill shares have only traded at prices comparable to current levels when there has either been speculation regarding a takeover offer or an actual takeover offer for the company.

Ausdrill share price chart since 30 June 2006

==> picture [448 x 222] intentionally omitted <==

----- Start of picture text -----

15 May 2007: Confidential 13 Sep 2007:
3.00 approach from party regarding a Discussions with 2nd 21 May 2008 5,000
propsal for a takeover party cease Macmahon announces Offer
4,500
$2.59 (implied value of bid at annoucement)
4,000
2.50
3,500
3,000
2.00 $1.95 (ASL close on 20 May) 2,500
2,000
13 Aug 2007: Takeover proposal update. Conversations with party 1,500
1.50 referred to on 15 May cease. Now in discussions with a 2nd party
which subsequently expressed interest 1,000
500
1.00 0
3-Jul-06 23-Nov-06 15-Apr-07 6-Sep-07 27-Jan-08 19-Jun-08
Volume traded Ausdrill share price
Volume (000s)
Ausdrill share price (A$)
----- End of picture text -----

Macmahon Holdings Ltd ABN 93 007 634 406

Level 3 263 Adelaide Terrace Perth WA 6000 PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au

…3/

3

Many factors suggest Ausdrill shares will drop substantially if Macmahon’s Offer lapses without Macmahon gaining at least 50.1% of acceptances, including:

• Macmahon’s Offer has been the catalyst for the majority of recent growth in Ausdrill’s share price, which prior to the Offer had been on a downward trend from $2.58 on 30 October 2007 (the day prior to entering into a trading halt for its share placement) to close at $1.95 on 20 May 2008, a fall of 24%. Over this period, the S&P / ASX 300 index dropped by 13% and the share price of Macmahon rose by 2%. Neither Ausdrill’s FY 2008 earnings update, nor the new growth guidance for FY 2009 (both of which were within the ranges of broker estimates pre-Macmahon Offer) have shifted the Ausdrill share price far from the implied offer price;

• In November 2007, Ausdrill shareholders were offered the opportunity to acquire further shares by way of a share purchase plan (SPP) at $2.40. Significantly, at a time when the S&P/ASX 300 was trading over 27% higher then current levels[i] , only 15% of shares offered were taken up under the SPP offer[ii] , with more than 80%[iii] of Ausdrill shareholders at that time choosing not to take up their entitlement. This lack of take-up by Ausdrill shareholders at a time when the share market was much stronger is consistent with a likely lack of buying support should the Macmahon Offer not proceed;

• As is commonly the case in takeover situations, it is likely that arbitrage investors may acquire material stakes in Ausdrill. If the Offer is unsuccessful, such investors are likely to seek to sell out of their positions. In light of the relative illiquidity of Ausdrill shares when compared to Macmahon shares, such sales could create significant downward pressure on Ausdrill’s share price in the short term; and

• As set out in the chart above, in May and August 2007, Ausdrill announced that it had received a number of approaches from parties interested in acquiring Ausdrill. Subsequently, in September 2007, Ausdrill announced that these discussions had ceased. More recently, Ausdrill's Managing Director Mr Ron Sayers has stated that no ‘white knight’ is being sought to counter Macmahon’s Offer. The failure of these past discussions to generate an offer, together with this recent statement by Ausdrill, suggest that the probability of an alternative bidder to Macmahon emerging is low. As a result, if the Offer is unsuccessful, it is likely that the takeover premium embedded in the current Ausdrill share price will be removed.

AUSDRILL’S TARGET STATEMENT IS NOT SUPPORTED BY AN INDEPENDENT EXPERT’S REPORT

Macmahon notes that although Ausdrill has stated that Macmahon’s Offer undervalues the company, and hence has chosen to recommend rejection of the Offer, Ausdrill has issued its Target’s Statement without the support of an Independent Expert’s report. While not required by law, it is common practice for target companies to support their recommendation with an Independent Expert's report, particularly where the target Board’s recommendation is based on a valuation argument.

In Ausdrill’s case, such a report would provide shareholders with a view on the merits of the Offer that is objective and free from any bias.

Macmahon is surprised that the Ausdrill Directors can support a reject recommendation without providing shareholders with this independent and unbiased view on the merits of the Offer, and believes that Ausdrill’s shareholders should consider the reasons why Ausdrill has acted in this manner.

…4/

Macmahon Holdings Ltd ABN 93 007 634 406

Level 3 263 Adelaide Terrace Perth WA 6000 PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au

4

AUSDRILL’S TARGET STATEMENT DOES NOT ADEQUATELY ADDRESS THE BENEFITS OF THE OFFER

In the Bidder’s Statement dated 22 May 2008, Macmahon set out seven key reasons why Ausdrill shareholders should accept Macmahon’s Offer. These were that Ausdrill shareholders would:

1. Receive a substantial premium to the pre-Offer Ausdrill share price;

2. Become a shareholder of a leading contract mining and construction company with attractive growth prospects;

3. Benefit from increased geographic spread and improved commodity and line of business diversification;

4. Benefit from an investment in Macmahon, a member of the S&P/ASX 200 index;

5. Benefit from Macmahon’s proven management expertise, which has delivered superior share price performance and shareholder returns compared to that of Ausdrill;

6. Benefit from the enhanced size, equity market presence and liquidity of the Combined Group; and

7. You may be eligible for capital gains tax rollover relief.

Macmahon believes that the analysis contained in the Ausdrill Target’s Statement is disappointing. It provides no alternative to the status quo and has focused on selective financial statistics over largely historical and selective periods. It has failed to address both the significantly higher forecast earnings growth profile of Macmahon[iv] and the significant benefits the Combined Group would deliver.

In particular, Macmahon notes the following items:

Ausdrill’s comment that Ausdrill shareholders controlling 39.1% of Ausdrill shares have confirmed that they will not accept the Offer is heavily qualified and non-binding.

In particular, those shareholders who are not directors of Ausdrill (accounting for 25.7% of the 39.1% of shareholders referred to above) issued their confirmation “on a non-binding basis in respect of the current terms of the Offer, subject to no new information becoming available”. These shareholders therefore remain free to accept the Offer at any time, and do not form a barrier to the achievement of the 80% acceptance level required in order to obtain CGT rollover relief.

Macmahon’s offer is conditional on Macmahon obtaining only 50.1% of Ausdrill shares. As described in Macmahon’s Bidder’s Statement, many of the operational benefits resulting from combining the companies will be achieved if Macmahon achieves a controlling stake but does not attain 100% ownership of Ausdrill, and shareholders who accept into the Offer will benefit from the greater liquidity of Macmahon shares.

Ausdrill has still not provided investors with the details of its order book – Macmahon has much greater visibility over its future revenue and cash generation

Macmahon believes that the best indicator of a contracting company’s future revenue and cash generation is the company’s order book, specifically the growth achieved in the order book and the quality of counter-parties and projects which comprise the order book.

Macmahon has grown its order book substantially over the past few years and as at 30 April 2008 the order book was at $2.1 billion. (This amount excludes the recently awarded $1.1 billion contract with Moly Mines, which is conditional on Moly Mines obtaining financing. If the Moly Mines contract were to be included, the order book would be $3.2 billion).

Macmahon Holdings Ltd ABN 93 007 634 406

Level 3 263 Adelaide Terrace Perth WA 6000 PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au

…5/

5

Based on the order book, Macmahon has very clear visibility into its expected future revenue and cash flow generation. In contrast to Macmahon, Ausdrill has still not provided investors with details of its order book, which Macmahon finds disappointing. Ausdrill has indicated in its Target’s Statement that “an independent Ausdrill offers strong future growth prospects”. As an example, Ausdrill has set out the amount of work that it has identified for tender in Africa over the next 18 months. However, it is unclear how this will translate to revenue and cash flow generation for Ausdrill shareholders. Clearly, this identified work for tender is significantly less certain than revenue which is included in Macmahon’s order book and which is subject to legally binding contractual agreements.

In assessing relative contribution to the combined entity, Ausdrill has neglected to take account of the quality of the earnings streams.

When compared to Ausdrill’s earnings, Macmahon’s earnings stream:

• Is comprised of approximately 51%[v] lower capital intensity civil construction revenues;

• Is exposed to less sovereign risk than Ausdrill, which generated 42% of its FY 2007 revenues from Africa; and

• Is less cyclical, particularly given Ausdrill’s exposure to exploration drilling, which accounted for at least 25% of its FY 2007 revenues.

Each of the above reasons explains why the market has consistently rated Macmahon’s earnings at a higher price / earnings (PE) multiple than Ausdrill, and justifies the relative equity contribution of Ausdrill and Macmahon to the Combined Group (as described in full in Macmahon’s Bidder’s Statement).

Further, Macmahon notes that in Ausdrill’s Target’s Statement there is a chart which is designed to support the suggestion that Macmahon is trading at a higher multiple than its ‘peers’. Macmahon notes that companies with market values and business models closer to Ausdrill’s are trading at FY 2009 PE multiples which are comparable to Ausdrill (e.g. Brandrill at 7.6x and Swick Mining at 8.0x which compares to Ausdrill’s FY 2009 PE of 8.0x). The larger companies within Ausdrill’s sample are trading at multiples which are closer to the FY 2009 PE multiple for Macmahon of 15.8x (e.g. Boart Longyear at 12.9x, Downer EDI at 13.1x and Monadelphous at 15.9x).

Macmahon’s higher PE ratio is also reflective of its higher EPS growth profile. Based on broker consensus forecasts, Macmahon’s EPS is forecast to grow at a compound annual growth rate of 32% from 2007 to 2009, four times the 8% forecast growth rate of Ausdrill.[ vi ]

Ausdrill paints a distorted picture of company performance when it states that its long term performance has consistently translated into superior dividends per share.

The investment community measures returns to shareholders as the combination of income (represented by the company’s dividend payments) and capital growth (represented by the company’s share price appreciation). Looking at one of these in isolation, as Ausdrill has done in its analysis, paints a distorted and potentially misleading picture of total returns to shareholders.

A better and more conventional measure of performance is total shareholder return (TSR), which measures company performance over time by combining share price appreciation and dividends paid.

On a TSR basis, if you had reinvested $1,000 in Macmahon Shares a year ago[vii] , your Macmahon Shares would have been worth $1,745 on 20 May 2008, the day before Macmahon announced its Offer. By comparison, an investment in Ausdrill made at the same time would now be worth $779. Further, on a TSR basis, Macmahon has outperformed Ausdrill over any chosen multiple of years up to the present for the last five years[viii] .

Macmahon Holdings Ltd ABN 93 007 634 406

Level 3 263 Adelaide Terrace Perth WA 6000 PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au

…6/

6

The chart below shows the relative TSR performance for Macmahon and Ausdrill over a one, three and five year period leading up to 20 May 2008 (the last day before Macmahon announced its Offer for Ausdrill).

Comparative Total Shareholder Return analysis to 20 May 2008 – Macmahon v Ausdrill[ix]

==> picture [448 x 222] intentionally omitted <==

----- Start of picture text -----

$12,000 $11,293
$10,000
Macmahon Ausdrill
$8,000
$6,000
$5,007
$4,000 $3,498
$3,075
$1,745
$2,000
$1,000
$779
$0
Investment Invested 1 year ago Invested 3 years ago Invested 5 years ago
----- End of picture text -----

Ausdrill’s claim that the Combined Group will have an increased risk profile when compared to the existing Ausdrill business is misleading.

Ausdrill has given no reasonable justification for its claims that the Macmahon business is exposed to increased risks when compared to Ausdrill. In fact, Macmahon believes that it is a materially lower risk business than Ausdrill and that the Combined Group business will have a significantly lower risk profile than Ausdrill on a standalone basis. As described in full in Macmahon’s Bidder’s Statement, Ausdrill shareholders will have enhanced diversification of revenues and hence a lower risk profile as a shareholder of the Combined Group due to a range of factors, as summarised below:

Ausdrill v the Combined Group – summary comparison of risks

Risk Category	Ausdrill v Combined Group
Sovereign risk	Ausdrill shareholders currently have a significant exposure to higher sovereign risk countries in Africa (from which Ausdrill generated 42% of its FY 2007 revenues). This represents a very large exposure for a company with a small market capitalisation such as Ausdrill and the combination with Macmahon would allow Ausdrill shareholders to achieve a more appropriate and lower risk geographic balance.
Cyclical risk	Ausdrill generated approximately 25% of its FY 2007 revenues from exploration drilling which is more cyclical than other activities carried out by Macmahon and Ausdrill. The combination with Macmahon would dilute Ausdrill shareholders’ exposure to such cyclical risk.

Macmahon Holdings Ltd ABN 93 007 634 406

Level 3 263 Adelaide Terrace Perth WA 6000 PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au

…7/

7

Commodity diversification risk	Ausdrill shareholders will benefit from increased commodity diversification due to Macmahon’s operations in the coal and iron ore sectors (prices for these bulk commodities have recently increased significantly based on strong supply and demand fundamentals). Currently, Ausdrill’s activities are heavily exposed to activities in the gold sector.
Business diversification risk	A significant majority of Ausdrill’s revenue is generated by activities in the resources sector. While Macmahon also generates significant revenues from activities for resources clients, it has a sizeable civil construction business which accounted for over half of Macmahon’s EBIT for the six months ending 31 December 2007.
Construction risk	Contrary to Ausdrill’s claims, Macmahon’s construction business is not high risk. As is set out in Macmahon’s Bidder’s Statement, Macmahon’s current order book features low fixed-price risk, with more than 95% of the order book comprising schedule of rates or alliance-style contracts. Macmahon notes that in 45 years of operation, it has never had a performance bond called.

Macmahon believes that it is relevant for shareholders in a small company such as Ausdrill to appreciate the risks of deriving such a significant proportion of earnings from Africa. This is particularly the case when Ausdrill shareholders consider that, since Macmahon announced its Offer, Ausdrill has highlighted Africa as a likely area of the company’s future growth.

Ausdrill’s African business actually suffered a 16% drop in revenue and 15% fall in earnings before interest and tax in the six months to 31 December 2007, when compared to the prior corresponding period. Despite this recent disappointing performance, Ausdrill’s statements since Macmahon’s Offer was announced suggest African activities could contribute a majority of Ausdrill’s earnings in the future. Macmahon believes that this would represent inappropriate geographic balancing for Ausdrill and would further increase the company’s risk profile and consequently its cost of capital.

However, Macmahon believes that the revenue from Ausdrill’s African activities could be appropriately managed within the expanded and more diverse revenue base of the Combined Group.

Given the analysis of relative risks, Macmahon believes that it is misleading for Ausdrill to claim that its shareholders would have an increased risk profile if they became shareholders in the Combined Group.

Ausdrill’s statement that it operates a significantly higher margin business ignores the relationship between its risk profile and required investor returns.

Investors generally expect a higher level of return from companies with significant undiversified exposure to a commodity or a sector which experiences a high level of business risk or cyclicality or which operates in regions of high sovereign risk. With Ausdrill meeting each of these criteria, investors would reasonably expect its margins to be higher.

Macmahon’s relatively lower margins reflect its more diversified, lower risk operations. However, despite this, Macmahon has demonstrated significantly superior total shareholder returns than Ausdrill – the key indicator for investors – and has a track record of improving its competitive position in the market through growth of EBIT and NPAT margins since 2004.

Macmahon Holdings Ltd ABN 93 007 634 406

Level 3 263 Adelaide Terrace Perth WA 6000 PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au

…8/

8

Ausdrill’s claim to have an “exceptionally strong” and “more conservative” balance sheet than Macmahon is not relevant; rather, it is the comparison of the management of the balance sheet and financial risk which is more important for investors.

Returns to shareholders are optimised when a business has an appropriate capital structure. As a lower risk, more diversified business, Macmahon is able to utilise more debt on its balance sheet without unduly increasing financial risk. Conversely, investors would expect Ausdrill, with its higher risk business, to operate a more conservative balance sheet to protect shareholders from adverse movements in business conditions. It is not, therefore, a comparison of the structure of the balance sheet that is important. Rather, it is a comparison of the management of the balance sheet that gives comfort to investors on a company’s financial risk.

Ausdrill states in its Target’s Statement that Macmahon has a significant amount of off-balance sheet debt. Contrary to inferences in Ausdrill’s Target’s Statement, Macmahon has a policy of disclosing all of its debt, including its off balance sheet financing. This was the case in Macmahon’s Financial Reports at 31 December 2007 and will remain the case in future. At 19 June 2008, MAH’s off balance sheet equipment finance was a relatively minor $12.5 million.

Macmahon believes that it has an appropriately conservative balance sheet for its business profile. Macmahon’s net debt was only $43.2 million and Macmahon’s gearing was 18.7% as at 31 December 2007. As at 31 December 2007, Macmahon had total debt of $163 million, and Ausdrill had total debt of $106 million. Macmahon has not needed to raise equity since September 2005 despite more than doubling NPAT from operations from FY 2005 to FY 2007.[x]

In comparison, Ausdrill raised funds by way of an equity placement in November 2007 at $2.50 per share and has yet to fully utilise it. Prior to Macmahon’s Offer, investors in this placement had suffered a 22% decline in the value of their investment.[ xi ]

MACMAHON URGES AUSDRILL SHAREHOLDERS TO ACCEPT THE OFFER AS SOON AS POSSIBLE.

For the reasons described above and in its Bidder’s Statement, Macmahon is strongly of the view that the shareholders of Ausdrill stand to gain significant benefits by accepting Macmahon’s Offer and stand to lose both these benefits and Ausdrill’s recent share price improvements resulting from the Offer should the Offer be unsuccessful.

Therefore, Macmahon urges Ausdrill shareholders to ACCEPT the Offer as soon as possible.

*** ENDS ***

Media contact: Gareth Widger Group Public Affairs Manager Mobile: 0419 918 272

Investor contacts: Nick Bowen Chief Executive Officer Telephone: (08) 9365 1200 Ross Carroll Chief Financial Officer Mobile: 0417 096 478

Macmahon Holdings Ltd ABN 93 007 634 406

Level 3 263 Adelaide Terrace Perth WA 6000 PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au

…9/

9

i Based on the closing price of the S&P/ASX 300 index on 7 November 2007, being the date the share purchase plan was announced and 20 June 2008

ii Based on reported take up of 1,142,737 shares from total offered of 7,500,000 as per Ausdrill announcement on 13 December 2007

iii Assuming 598 shareholders elected to take up shares as per Ausdrill announcement on 13 December 2007, and a total number of shareholders of 3,428 as per the Ausdrill FY2007 Annual Report

iv Based on NPAT from continuing operations in FY2007A of $26.6m for Ausdrill and $30.0m for Macmahon, and FY2008F NPAT of $35m for Ausdrill (as stated in their announcement to ASX on 4 June 2007) and $47m for Macmahon

v Based on Macmahon’s EBIT results for the half year ending 31 December 2007

vi Based on Macmahon EPS for FY2007 of 6.4c and broker consensus EPS for 2009F of 11.1c, and Ausdrill EPS for FY2007 of 20.87c and broker consensus EPS for 2009F of 24.5cps.

vii Assumes investment on 21 May 2007

viii Assuming end date of 20 May 2008

ix Analysis assumes all dividends are reinvested and adjusted for rights issues

x FY2005 NPAT from operations was $15.9m. FY2007 NPAT from operations was $33.4m

xi Based on the closing price of $1.95 on 20 May 2008

---

Macmahon Holdings Ltd ABN 93 007 634 406

Level 3 263 Adelaide Terrace Perth WA 6000 PO Box 198 Cannington WA 6987 Telephone: (08) 9365 1111 Facsimile: (08) 9365 1186 Web: www.macmahon.com.au Email: info@macmahon.com.au