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WestStar Industrial Limited (ASX: WSI) is a company from the metals and mining sector, which provides mining services, manufacturing and production of concrete elements and structures.
On 10th April 2019, WestStar Industrial Limited advised that it has received commitments from the domestic and international institutional and professional investors for the placement of the new ordinary shares to raise $2.4 million at 2 cents per share (13% discount to the last closing price and 8.8% discount to the 5-dayVWAP.The company has also received strong support from its existing shareholders. The company will be issuing 120 million shares; settlement expected to be on 17 April 2019.
The funds raised through the placement of shares will help the company to accelerate the growth of WestStar businesses as well as strengthen its balance sheet. The funds raised will be used in the following key areas:
- SIMPEC Pty Ltd: Funds will support in the delivery and potential scope extensions to contracts with top tier customers.
- Precast Australia Pty Ltd: Funds will be used for the delivery and potential scope extensions to contracts like Salini Impregilo NRW JV Forrestfield Airport Rail Link Project as well as capitalising on the improving precast concrete market.
At present, WestStar Industrial Limited has accumulated contracts worth $33 million for the current financial year.
On 28th March 2019, WestStarâs concrete construction business, Precast Australia was awarded a contract worth $2.7 million by PACT Construction. Precast Australia was also awarded a contract to work at the University of Western Australia by Perkins Buildings.
The current client list order book for FY2019 consists of MSP (a contract worth $14 million), Rio Tinto (a contract worth $8.5 million), ILUKA (a contract worth $2 million, Salini Impregilo ($0.8 million) and BHP ($0.5 million).
For the half year ended 31 December 2019, the revenue of the company from its ordinary activities went up by 238% to $10,333,281. The net loss attributable to the members declined from $2,084,004 in 1H FY2018 to $1,402,782 in 1H FY2019. The net liabilities of the group increased from $456,388 in 2H FY2018 to $1,718,149 in 1H FY2019.
By the end of the first half of the FY2019, the net cash and cash equivalent increased by $753,146 and the company had a net cash balance of $2,464,972.
The company has a clear growth strategy, where it will be maintaining as well as developing client relationships. It will also demonstrate the quality capabilities to grow market traction and at the same time, win new and larger contracts. The group will increase diversification by offering new services to the clients and will also look forward to the geographical expansion.
In the previous six months, the stock generated a return of 46.67%. At market close on 10th April 2019, the closing price of the stock was A$0.022, down by 4.348% as compared to its previous closing price. Today, 11 April, the stock is trading flat at A$0.022 (As at 12:50 PM AEST). WSI has a market capitalisation of A$10.91 million with approximately 495.75 million outstanding shares.
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