Leading provider of specialised services to the Australian coal mining industry, Mastermyne Group Limited (ASX: MYE) has been focusing on growing its core specialist capabilities within the buoyant underground coal mining market
In an announcement made on 17 May 2019, the company announced that it has reached agreement to sell the Scaffold and Blast & Paint component of its Mastertec subsidiary to Radbyrn Pty Ltd for around $6.0 million consideration.
It is expected that through this divestment the company will generate a gain of $1.9 million. Further the divestment will provide further balance sheet strength and additional capital flexibility to continue to support the growth opportunities in the companyâs core specialist capabilities within the buoyant underground coal mining market.
In FY19 (till 28th April 2019), Scaffold and Blast & Paint services generated revenue of around $12.8 million.
The first half of FY19 was the companyâs 3rd consecutive half year period of strong growth. The company generated revenue of $116.8 million in H1 FY19, up 28% on the previous corresponding period (pcp), driven by the award of new contracts in the mining division along with scope increase and extensions of existing mining contracts.
Financial performance in H1 FY19 (Source: Companyâs Reports)
Further, the company reported EBITDA of $9.3 million for the half year period, up 39.3% on the previous corresponding period (pcp). With robust coal market outlook, the company is expecting strong results in the second half of FY19. Before that in FY18 also, the company had produced improved outcomes across all areas of its business with significant cost reduction achieved during the period.
The overall cash position at 31 December 2018 was a net increase in cash and cash equivalents of $4.5 million, attributable to improved operating cashflow from increased revenue and better financial performance for the six months.
The company recently narrowed its FY19 Revenue and EBITDA guidance from $230 to $250 million and $20 to $23 million to $240-$250 million and $21-$22 million respectively, driven by the increased scope on existing contracts and improved production on its performance based contracts.
Now, letâs have a glance at the companyâs stock performance and the return it has posted over the past few months. The stock is trading at a price of $0.850, up by 2.41% during the dayâs trade with a market capitalisation of ~$84.38 million as on 17 May 2019. The counter opened the day at $0.835 and reached the dayâs high of $0.850 and touched a dayâs low of $0.835 with a daily volume of ~55,627. The stock has provided a year till date return of -22.07% & also posted returns of -37.12%, -9.78% & -3.49% over the past six months, three & one-month period respectively. It had a 52-week high price of $1.605 and touched 52 weeks low of $0.760, with an average volume of ~147,675.
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