Mitchell Services Limited (ASX: MSV), established in 1969 and headquartered in Seventeen Mile Rocks, Queensland, offers exploration and drilling services to the mineral exploration and energy industries in Australia. Its solutions cover all stages of the mining lifecycle.
On March 22nd, 2019, the company declared a fully franked special dividend of 0.1 cents per share as a part of its ongoing capital management strategy. The shareholders registered at 5 pm on June 28th, 2019 would be eligible to avail the dividend. The payment is scheduled to be made on July 30th, 2019 and the ex-dividend date is planned as June 27th, 2019.
The Board’s decision to announce the special dividend follows the company’s reportedly strong operational performance to date. Going further, the company expects to generate an EBITDA for the financial year ending June 30th, 2019, of $ 21 million - $ 23 million as per the guidance. Moreover, Mitchell Services has also improved its financial position by reducing the net debt of $ 17.7 million as of June 30th, 2018 to $ 2.6 million as of December 31st, 2018. The Board intends to assess and pay out further special dividends in accord with their strategy.
The company reported its extremely impressive financial results for the six months from July 1st, 2018 to December 31st, 2019 (1H FY2019), whereby the revenue from continuing operations increased by 91% to $ 63.29 million.
This significant upswing in the revenue, predominantly derived from Tier 1 clients (91.3%), can be attributed to a combination of increased utilisation, productivity and pricing levels amidst the sustained improvements in the industry activity levels and general market conditions. Also, 1H FY2019 revenue from underground drilling exhibited growth of 127% compared to 1H FY2018 and now accounts for 38% of the Group’s total revenue. As for the commodity-wise contribution, the revenue mix remained well balanced with exposures across a range of precious metals (gold, copper lead, zinc, silver), minerals and coal.
The EBITDA also recorded a vast improvement of 431% to $ 14.23 million from $ 2.68 million in the prior corresponding period ended December 31st, 2017. The profit after tax attributable to members amounted to $ 11.73 million, reflecting a staggering rise of 1,081% ($ 12.92 million) on the net loss of $ 1.19 million recorded for the pcp. Besides, after deducting depreciation and amortisation of around $ 5.7 million, the Group recorded earnings before interest and tax (EBIT) of $ 8.5 million in 1H FY2019, up $ 8.9 million from a loss of $ 0.4 million in 1H FY2018.
At the end of the concerned period, the net cash and cash equivalents stood at ~ $ 3.92 million, up on $ 1.44 million as at December 31st, 2017, end of 1H FY2018. The operating activities generated net cash inflows of $ 15.31 million accompanied by net cash outflows of $ 2.68 million from investing activities and $ 10.57 million from financing activities.
Mitchell Services has a market cap of AUD 100.83 million to date with ~ 1.74 billion outstanding shares. At the time of trading on Friday, March 22nd, 2019 (03:02 PM AEST), the MSV stock price was trending at AUD 0.059, up 1.72%, by AUD 0.001.