Slide 1: Half Year Results Financial Year 2024
HALF YEAR RESULTS FINANCIAL YEAR 2024 ASX:MSV
Slide 2: Disclaimer
2 DISCLAIMER This investor presentation has been prepared by Mitchell Services Limited (“the Company”). The information contained in this presentation does not take into account the investment Information in this presentation is of a general nature only and should be read in conjunction with objecti
Slide 3: Agenda
3 AGENDA 1. MARKET PROFILE 2. 1H24 BUSINESS SUMMARY 3. OVERVIEW 4. OPERATIONAL UPDATE 5. PROFIT AND LOSS 6. RETURN ON INVESTED CAPITAL 7. BALANCE SHEET 8 CASH FLOW 9. DEBT PROFILE 10. CAPITAL EXPENDITURE 1H24 RESULTS PRESENTATION 11. CAPITAL MANAGEMENT UPDATE 12. 1H24 CAPITAL MANAGEMENT PERFORMANCE
Slide 4: Market Profile
4 MARKET PROFILE ASX INFORMATION BOARD OF DIRECTORS ASX Stock Symbol MSV Nathan Mitchell Executive Chairman Shares on Issue (at 19/02/2024) 214,008,947 Scott Tumbridge Non- Executive Director Share Price (at 19/02/2024) A$0.365 Peter Miller Non-Executive Director Market Capitalisation A$78.11m Rober
Slide 5: 1H24 Business Summary
5 1H24 BUSINESS SUMMARY REVENUE $121.6m EBITDA $20.0m PROFIT AFTER TAX $4.3m 1% FROM 1H23 21% FROM 1H23 2,050% FROM 1H23 OPERATING CASHFLOW $24.4m SAFETY PERFORMANCE RETURN ON INVESTED CAPITAL 15.1% 122% 459% 1H24 RESULTS PRESENTATION WINNER OF PRESTIGIOUS NATIONAL SAFETY AWARD FROM 1H23 FROM 1H23
Slide 6: Overview
6 OVERVIEW ▪ High prices for key commodities driving continued demand for drilling services particularly for highly skilled specialist drilling services ▪ Inflationary pressures are continuing to ease ▪ The drilling services market for global mining majors and existing producers remains strong whils
Slide 7: Operational Update
7 OPERATIONAL UPDATE ▪ The surface fleet continues to benefit from strong demand with all surface rigs effectively booked out ▪ Utilisation in the underground fleet reduced slightly with the largest portion of this reduction coming from the Victorian goldfields (where existing clients have reduced r
Slide 8: Profit and Loss
8 PROFIT AND LOSS Leverage in earnings beginning to play out $20m $20.0m $16.6m $10m $6.2m $4.3m $0m 1H24 RESULTS PRESENTATION 1H23 1H24 EBITDA EBT NPAT ▪ 1H24 EBITDA increased by approx. 20% vs 1H23 levels driven by stronger margins as opposed to top line revenue growth ▪ Growth in EBT and NPAT out
Slide 9: Return on Invested Capital
9 RETURN ON INVESTED CAPITAL $100m 18.0% 15.0% $80m 12.0% $60m $85.9m 9.0% $73.4m $40m $26.7m 6.0% $20m 3.0% $19.5m $14.0m $3.0m $0m 0.0% 1H23 1H24 1H24 RESULTS PRESENTATION PPE & Intangibles Working capital EBIT (annualised) ROIC ▪ ROIC increased exponentially from 2.7% in 1H23 to 15.1% in 1H24 dri
Slide 10: Balance Sheet
10 BALANCE SHEET BALANCE SHEET REMAINS STRONG HEADING INTO 2H24 31 Dec 23 30 Jun 23 Change $000's $000's % • Overall reduction in net asset position largely Balance Sheet Summary due to the FY23 final dividend and ongoing Current assets 55,872 56,782 (1.6%) share buy-back payments made in 1H24. Non-
Slide 11: Cash Flow
11 CASH FLOW EXCEPTIONALLY STRONG CASH FLOW PERFORMANCE OPERATING CASH FLOW SUMMARY ▪ Strong EBITDA performance, stable operating rig count and lack of any significant increase in working 1H24 1H23 Change capital requirements have driven an exceptionally $000's $000's % strong cash flow performance.
Slide 12: Debt Profile
12 DEBT PROFILE CONTINUED REDUCTION IN DEBT AND LEVERAGE FACILITY ▪ 1H24 performance delivered a 49% reduction in net debt 31 Dec 23 30 Jun 23 Movement ▪ Current blended average cost of debt is approximately 5.7% p.a with the majority fixed prior to recent rate increases $000's $000's $000’s ▪ MSV h
Slide 13: Capital Expenditure
13 CAPITAL EXPENDITURE Disciplined allocation of capital YEAR ON YEAR CAPITAL EXPENDITURE $20m ▪ The Company remains committed to its Capital Management Strategy which includes the application of sensible limits to growth capital expenditure $16m ▪ Total capital expenditure for 1H24 was $9.7m which
Slide 14: Capital Management Update
14 CAPITAL MANAGEMENT UPDATE The Company is committed to returning surplus cash to shareholders under a capital management policy with the following summarised key terms. ▪ The Company will prioritise a portion of free cash flow to reduce leverage and has set a net debt target of $15.0m by 30 June 2
Slide 15: 1H24 Capital Management Performance
15 1H24 CAPITAL MANAGEMENT PERFORMANCE Prioritise leverage reduction Sensible capex allocation Dividends Share buy-backs NET DEBT $9.1m CAPEX $9.7m INTERIM DIVIDEND OF 2.0cps BUYBACK PAYMENTS $1.8m 49% 9% 100% 20% 1H24 RESULTS PRESENTATION FROM 30 JUNE 23 FROM 1H23 FROM 1H23 FROM 1H23
Slide 16: Summary
16 SUMMARY ▪ MSV generated 1H24 EBITDA and NPAT of $20.0m and $4.3m respectively ▪ High prices for key commodities driving continued demand for drilling services particularly for highly skilled specialist drilling services ▪ Quality brand with long history and high-quality revenue streams ▪ The dril
Slide 17: Definitions
17 DEFINITIONS Capex Capital expenditure Cash Conversion The ratio of A to B; where A is the reported cash flows from operating activities and B is the reported EBITDA Ratio Earnings before interest, tax, depreciation and amortisation; calculated as NPAT plus income tax expense plus finance charges
Slide 18: Contact
CONTACT Andrew Elf Chief Executive Officer 112 Bluestone Circuit Seventeen Mile Rocks Qld 4073 PO Box 3250 Darra Qld 4076 P: 07 3722 7222 M: 0413 608 018 E: a.elf@mitchellservices.com.au