Euroz Hartleys Mining Services Day Review

We hosted a Mining Services day yesterday. Below are some notes from each of the 17 names that presented. Broadly speaking, the themes we took away from the presentations are as follows:

Below is mining services growth superimposed over trading metrics in relation to a basket of mining services companies:

The takeaway as we see it is that the sector has traded as low as it is currently (EV/EBITDA 4-5x) only four times before;

  1. During the GFC.
  2. When construction activity in the sector aggressively slowed 2013 – 2015.
  3. Last years COVID shock and.
  4. Right now.

Although we saw YoY EBITDA growth of 30% to FY21, it failed to translate to expanding EV/EBITDA multiples. Company guidance, generally, points to EBITDA growth in FY22 as they learn to live and thrive in today’s Covid world. We see multiple expansion as increasingly likely over the medium term and, in the absence of it, an increasing likelihood of sector consolidation.

Notes from individual presentations below:

Civmec – Pat Tallon & Kevin Deery

Emeco Holdings – Ian Testrow

Austin Engineering – David Singleton

Mader Group – Justin Nuich & Paul Hegarty

Southern Cross Electrical Engineering – Graeme Dunn & Chris Douglass

Imdex Limited – Paul House & Paul Evans

NRW Holdings – Andrew Walsh

Decmil Group – Dickie Dique & Alex Hall

DDH1 – Sy Van Dyk & Ben Mackinnon

Vysarn Limited – James Clement

Duratec – Phil Harcourt & Chris Oates

SRG Global – David MacGeorge & Roger Lee

Macmahon Holdings – Mick Finnegan, Peter Pollard & Chris Chong

Perenti Global – Mark Norwell, Peter Bryant & Jeffrey Sansom

Mineral Resources – James Bruce & Mike Grey

Swick Mining Services – Kent Swick, Jitu Bhudia & Brett Giroud

MACA Limited – Mike Sutton & Peter Gilford


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