Time to take an interest in Forge?

Forge Group's (ASX:FGE) FY11 results came out last week and it's business as usual. Growing well, cash building up, strong order book ($355m after the last couple of contracts), JV with Clough started up with first contact win, Africa strategy sounds promising though have risks attached. Reasonably priced at around 11 trailing P/E.

• Revenue: $424.7m (up 72% year-on-year)
• NPAT: $38.8m (up 32%)
• Diluted EPS: 45.24c (up 20.2%)

There's a bit of margin compression (employee salaries appears to be a large factor) starting to creep in. And with no outlook statement, there's a bit of uncertainty.

What is interesting though is the Clough/Forge 50/50 JV has been awarded an Early Contractor Involvement (ECI) contact for a bit of work with Hancock Prospecting's Roy Hill Iron Ore Project. Looks like they're doing a Bankable Feasibility Study (BFS), scoping out the work, schedule and price. Clough was kind enough to through some information up on this in its slide pack this morning and stated that it could lead to $500m+ worth of work.

$250m+ worth contacts would be a significant step up and a huge boon for the company - it's over 50% of its current annual revenues.

Current Price: $4.98