01/06/2018 - 09:48

Primero prepares for ASX listing

01/06/2018 - 09:48

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Perth-based engineering firm Primero Group has appointed company director Mark Connelly as chairman and broking firm Cannacord Genuity as lead manager as its finalises plans for an initial public offering.

Primero prepares for ASX listing
Cameron Henry says Primero Group has expanded to a Montreal office. Photo: Primero Group

UPDATED: Perth-based engineering firm Primero Group has appointed company director Mark Connelly as chairman and broking firm Cannacord Genuity as lead manager as its finalises plans for an initial public offering.

The listing comes after a period of strong growth for Primero, which has secured several big contracts in the lithium sector while expanding overseas.

Primero lodged its prospectus with Asic in early June.

It anticipates $79.9 million annual revenue and underlying earnings (Ebitda) of $8.6 million in the year to June 2018.

That's up from $52.1 million and $2.6 million respectively in the prior year.

The biggest contributor to its revenue growth was its work on Tawana Resources' Bald Hill lithium project, for which Primero was paid $35 million.

Looking ahead, the prospectus discloses that Primero has contracted revenue of $66.9 million in FY19.

The biggest contributors will be work on AGL's Barker Inlet power station in South Australia, operations and maintenance work at Bald Hill, and Rio Tinto's Marandoo waste fines distribition pipeline project.

The company is targeting a $25 million capital raising, which would value the company at $57 million.

The raising would allow a partial sell-down by existing shareholders and provide extra funds for growth.

It would be one of the largest IPOs by a Perth-based company in recent years, since Australis Oil & Gas raised $30 million in 2016.

It’s also one of just a handful of mature Western Australian businesses to list on the Australian Securities Exchange in recent years.

Other examples are remote power supplier Zenith Energy and marine-focused engineering firm VEEM, both of which raised $25 million.

The BNiQ Search Engine lists a total of 52 IPOs by Perth companies over the past two years, with the average raising being just $6.3 million.

Primero was established in 2011 and two years later was a winner in the Business News Rising Stars awards.

It has worked on a wide range of projects, with recent deals with Tawana Resources, Northern Minerals and Pilbara Minerals (via RCR Tomlinson), among others.

Among its clients are Rio Tinto, Newcrest Mining, Galaxy Resources, energy companies APA Group, Quadrant Energy and Vermillion, and Indonesian company Merdeka Copper Gold.

Managing director Cameron Henry said the business also had a presence in Montreal, and had work through the Americas region for a number of clients.

These include ASX-listed Titan Minerals, which has copper and gold projects in Peru.

Mr Henry was appointed a director of Titan in October last year, around the time Primero was undertaking an independent review of Titan’s San Santiago copper plant.

Primero’s incoming chairman, Mr Connelly, is chairman of Calidus Resources, West African Resources and Tao Commodities, and a director of Ausdrill and Tiger Resources.

The company has also appointed Strandline Resources chief executive Luke Graham as a non-executive director.

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