Macmahon making news

AFTER more than a year out of the spotlight the directors of national mining and civil contract services group Macmahon Holdings, headed by CEO Nick Bowen, have confidently broken their silence.

This latest attention-seeking exercise coincides with the first positive profit results since 1999.

In the past three years the Perth-based group has amassed losses of $95 million. This week it announced a $40 million turnaround in fortunes, reporting a net profit after tax of $7.1 million for 2002 on increased sales of $441 million. Earnings per share totalled 2.9 cents and the return on shareholder equity was 14.3 per cent.

Mr Bowen said the stronger net operating cash flow had been achieved by a focus on debt reduction strategies. During the past two years the net debt position has more than halved, from $173.5 million to $82.5 million.

Much of the company’s success has been won on the back of its Darwin to Alice Springs rail project, which is more than a third of the way through to completion.

Investors failed to compliment the directors with a rush of buying orders. On Tuesday this week shares were traded at 27.5 cents, up 1.85 per cent, below the April peak of 37 cents but a recovery from the 12-month low of 10 cents.

Wavenet rides on

FEASIBILITY studies into a wireless data module built by Perth-based technology company Wavenet are due to be completed in two weeks by Motorola. Production of Motorola’s 10,000 unit order bound for the US are also due to commence with further orders possible if the feasibility study proves up the technology. Wavenet is also negotiating with Motorola for the development and manufacture of other compatible devices.

DJ Carmichael tipsters believe Wavenet will successfully bring some of the negotiations to fruition by the second half of 2002, providing an extra $5 million in net profit after tax.

“The company continues to look attractive, having reduced its burn rate from $250,000 per month in the 2002 financial year to an expected $200,000 per month in the current financial year,” DJ Carmichael advises in its weekly brief.

“It has a strong working capital, no debt and is trading on a prospective price earnings ratio of 8.4 times 2004 financial year prospective earnings.” DJ Carmichael recommends a buy below 37 cents, 10 cents above its current trading price.

Mincor profit

PERTH nickel producer Mincor Resources NL has reported its second year of profit growth after unveiling a more than four-fold increase in net annual profit to $9.3 million as its profitability strengthened on the back of its Kambalda nickel operations.

Sales revenue increased 288 per cent to $63.5 million compared with $16.3 million last year as operations continued at its 76 per cent owned Miitel and Wannaway Nickel Mines near Kambalda, which it acquired from WMC Resources Ltd during 2001.

Mincor’s share of operations from the two mines amounted to 8,635 tonnes of nickel metal concentrate for the 12 months ended June 30, from 233,775 tonnes of ore processed at a cost rate of US$0.94 per pound. Mincor managing director David Moore said the result had “broken the back of our project finance debt”. Debt has been reduced from $32 million in December 2001 to $10.9 million as at August 30, 2002.

Glengarry deal

GLENGARRY Resources Limited last week announced that it had entered a farm-in and joint venture agreement with Barrick Gold of Australia Limited over two 100 per cent owned tenements in the Tanami-Granites Region in the Northern Territory. Under the agreement, Barrick will earn a 70 per cent interest by spending up to $1 million within five years at the 178 square kilometre tenement located at Tanami Downs.

The property lies just 25 kilometres from the 5,000,000 ounce Callie gold deposit held by Normandy NFM Ltd.

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