Matrix Composites & Engineering Limited (ASX: MCE), which is into manufacturing and distribution business and serves offshore oil & gas industry, civil and infrastructure industries among many, has now completed $3 million placement to support growth in production. Every shareholder has supported the placement. Chief Executive Officer of Matrix Mr. Aaron Begley told that the funds would help the Company as they can ramp up production in FY19 to deliver on its order book and they will also ensure Matrix is well placed for the future orders.
The Company has $43 million in work secured across the oil and gas, transportation, and infrastructure clients under their diversification strategy, underwriting plant production through to the end of CY2019. The placement will improve the Matrix’s position by increasing their output at their Henderson Facility. They see a pick-up in the oil and gas sector with a growing order pipeline, and they have started to convert this into orders, such as last month company has received $15.3 million drilling riser buoyancy contract.
For FY19, the company is expecting the revenue in the range of $35 million to $40 million, up from $19.5 million in FY18. This assumption is based on larger orders ramp up.
MCE will raise $3 million by issuing 8,571,429 million shares at an issue price of $0.35 per share. For this placement, shareholder approval is not required. Monday, 17 December 2018 is scheduled for the settlement of the placement. The issued shares are expected to start trading on ASX on 18 December 2018, Tuesday. After the completion of the process, the company will have 102,321,429 shares. Lead manager of the Placement is Argonaut Securities Private Limited.
Financial Performance of FY 2018: Revenue and earnings were impacted by deferrals in new oil and gas contracts and further expected revenue from civil and infrastructure projects moved into FY19. FY18 EBITDA includes $1m foreign exchange gain as compared to $1.5m loss in FY17. The order book has increased now to US$20m.
Looking ahead, oil and gas sector is recovering after years of global downturn. Increased focus on SURF and Subsea IMR provide further opportunity. For Civil & Infrastructure, Resources, Defense, they are pursuing additional, tangible growth opportunities in line with diversification strategy and developing parallel processes, maintaining and leveraging existing core capability. Approximately $27m of manufacturing work has been locked away for the next 18 months under projects secured across a range of oil and gas, transportation and infrastructure clients.
In the last six months, the price of the company has shown a negative return of 31.48 percent as on 29 November 2018 and 7.14 percent down over the past one month. Matrix Composites & Engineering Limited shares are trading at $0.400 with a market capitalization of $36.56 million as on 10 December 2018.
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