Swick Mining Services has begun a strategic review of its drilling and mineral technology divisions, while at the same time announcing its first interim dividend in five years.
Swick Mining Services has begun a strategic review of its drilling and mineral technology divisions, while at the same time announcing its first interim dividend in five years.
The company says cash generated from its drilling business in the six months to December 31, coupled with a robust financial position, supports a fully franked interim dividend of 0.3 cents per share.
Swick reported $82.5 million in revenue from its drilling services division in the first half of FY20, an increase of 9.9 per cent on the prior corresponding year.
However, earnings before interest, tax, depreciation and amortisation (EBITDA) from its drilling services was down 21.9 per cent to $12.1 million.
EBITDA from its mineral technology business had also dropped, falling 14.7 per cent to report a $2 million loss for the first half of FY20.
At the group level, Swick reported overall revenue and other income of $81.5 million, representing an 8.2 per cent increase compared to the same time last year.
The company said it ended the year with a strengthened balance sheet, with gearing down to 8.9 per cent, compared with 21.4 per cent as at June 30 last year.
Swick said this was driven by a $16.1 million capital raising in 2019.
In its first-half financial results, Swick said it had begun a strategic review to consider the optimal corporate structure of its core businesses, with the company citing significant growth within its mineral technology business, Orexplore, launched in 2018.
Revenue from the business rose 118 per cent to achieve $50,000 in the first half of FY20.
Swick founder and managing director Kent Swick said the time was right to consider strategic options to deliver value from both businesses to shareholders.
“Orexplore is a very exciting technology that has the potential to provide a significant amount of useful data for geotechnical engineers, mining engineers, geologists, and metallurgists from a single scan,” he said.
“It is pleasing to see this business approaching the final step in its commercialisation runway, with two site-based trials currently under way.”
Mr Swick also noted the company’s global drilling business had provided a strong foundation for cash generation.
Swick has appointed Shaw and Partners to advise on the strategic review.
Swick Mining Services shares were down 2.78 per cent to trade at 18 cents per share, as at 3:15pm AEDT.