24/08/2021 - 11:50

Mader Group up on strong result

24/08/2021 - 11:50

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Mader Group has largely avoided the labour shortage issues hitting other mining services companies, reporting strong growth in earnings and forecasting more growth this year.

Mader Group up on strong result
Justin Nuich has forecast strong growth in FY22.

Mader Group has largely avoided the labour shortage issues hitting other mining services companies, reporting strong growth in earnings and forecasting more growth this year.

The company’s share price jumped as much as nine per cent this morning to be near all-time highs, before easing off; it was trading up 4.1 per cent at $1.125 at midday.

That contrasted with the sharp sell-off that hit other contractors today, notably Monadelphous Group and Perenti Global.

Mader reported a 10.5 per cent increase in net profit after tax to $19.3 million for the year to June 2021.

That was on the back of an 11.2 per cent increase in revenue to a record $304.3 million.

Most of the group’s revenue is generated in Australia, which grew 10.7 per cent to $273 million.

Its relatively new North American division grew 75 per cent to $24.2 million while the rest of world shrunk to $6.8 million.

That followed the group’s decision to withdraw its expatriate workforce from Africa and Asia in April 2020 after the onset of COVID.

Looking ahead, the company is expecting strong growth in FY22, with forecast revenue of between $355 million and $365 million delivering a forecast net profit of between $23 million and $25 million.

Chief executive Justin Nuich said he anticipated growth in Australia to be similar to last year while North America would grow by “north of 75 per cent”, helped by its move into Canada.

The company said all of its core business divisions, which are focused on delivering mechanical maintenance services on mine sites, continued to grow.

The development of multi-billion dollar resource projects ultimately increased the size of the maintainable mining fleet.

It was also looking to provide additional trades and services, with its total labour force growing to 1,600 people.

Mr Nuich said Mader’s operations were well adapted to operate within the limits of the COVID landscape.

In particular, he said the company’s diverse operations across dozens of mine sites gave it a lot of flexibility.

It meant there was plenty of work within each of the major states, which reduced the impact of COVID travel restrictions.

He added that Mader was able to offer a lot of flexibility in types of work.

“Our people can get the work they want and the rosters they want,” he said.

He added that Mader had a good track record on staff retention, despite competitors offering higher wages.

“Our culture is critical, people like to stay with us.”

Mr Nuich said Mader remained selective about the people it recruited.

“We don’t want to risk damaging the brand by putting on the wrong people.”

The company is expanding its Trade Upgrade program, which upskills light vehicle and road transport mechanics into heavy duty diesel mechanics.

It inducted 65 candidates into the program during the financial year, bringing the intake to 92 tradespeople since inception in late 2019.

In response to a tightening labour market and increased customer demand, Mader expanded the program nationally, delivering training in Western Australia and Queensland.

The company declared a final dividend of 1.5 cents per share, taking the total dividend for FY21 to 3.0 cents per share.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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