-Earnings growth unlikely in FY13
-Austen quarry has key to price upside
-Challenges for clinker production
-Hostage to housing improvement

By Eva Brocklehurst

Quarry, concrete product and cement producer Adelaide Brighton ((ABC)) used a tour of its Austen quarry, NSW, to let brokers know that the going has been a bit rough. The company is constrained by the wobbly local recovery in housing construction, particularly softness in Victoria, as well as the reduction in mining project expenditure. The Austen quarry is viewed as a key asset that could deliver improved results for the company.

Austen was commissioned in 2007 and was part of Adelaide Brighton's acquisition of Hy-Tec. It produces mainly road base product. The company is confident there is earnings upside of up to $5 million from the quarry, because the location is more favourable relative to peers. Austen is at Hartley, at the western base of the Blue Mountains. Competitor Boral's ((BLD)) Peppertree is twice as far from the key western Sydney market. Macquarie notes that the company's position in the Sydney aggregates market has potential to improve in 2014, as the exhaustion of Boral and Holcim's Penrith Lakes operations mean Austen is no longer at a freight disadvantage.

These companies are sourcing aggregates from further south, at Marulan, in 2014 and will need to