Perenti lifts revenue guidance

Mining services group Perenti has marginally increased its 2023 financial year revenue expectations and has shaved $40 million off its capital expenditure targets.

In an update to the market, Perenti lifted its FY23 revenue expectation of between $2.8 billion and $2.9 billion to the top end of the guidance range to $2.9 billion.

Its earnings before interest, taxes, depreciation, and amortisation of between $250 million and $265 million has also been slightly upgraded to between $260 million and $265 million.

Perenti said it expects to trim $40 million off its capital expenditure guidance to $290 million, down from the intitially expected capex of $330 million for FY23. 

The slight changes and cut down on capex informs Perenti's 2025 strategy, which aims to optimise its current business operations and build a future portfolio.

Perenti is divesting some of its non-core businesses as a part of its simplification strategy to position itself for expansion, according to the group. 

It sold its geochemical and precious metal analyses subsidiary MinAnalytical for $43.6 million cash to its competitor ALS at the end of 2021. 

The group also sold its drilling division Connector Drilling for $16 million cash in 2019. 

The Mark Norwell-led group also updated its FY25 revenue target from $2.5 billion to $3 billion, in today's announcement. 

In today's announcement, the group also detailed its FY24 expectations ahead of the guidance announcements in August, with revenue expected to be in-line with FY23 and EBITA to increase from the prior period.

Perenti expects its FY24 capital expenditure to be slightly higher than FY23, and its free cash flow to be stronger.

“This time last year, we updated out 2025 strategy and since then, our global workforce comprising 9,000 highly talented, motivated, resilient and determined people have continued to execute on our strategic objectives and in many cases have outperformed expectations,” Mr Norwell said.

“With the end of FY23 only weeks away, we expect the positive momentum built up in FY23 to continue and are targeting for FY24 will be a third consecutive year of earnings growth, margin expansion and a strengthening balance sheet.”

On the ASX, Perenti shares were up 3.85 per cent to $1.22 at 12.38PM AEST.