31/08/2020 - 14:00

Swick prepares for drilling, mineral tech demerger

31/08/2020 - 14:00

Bookmark

Save articles for future reference.

Swick Mining Services says it remains on track to demerge its drilling and mineral technologies businesses after raising its order book to $363 million.

Swick prepares for drilling, mineral tech demerger
Swick reported a 4.7 per cent rise in group revenue in fiscal 2020. Photo: Swick Mining Services

Swick Mining Services says it remains on track to demerge its drilling and mineral technologies businesses after raising its order book to $363 million.

It comes despite posting a loss of $6 million for the full financial year.

The ASX-listed contractor said its earnings were impacted by ongoing strategic investment in its mineral technology business, Orexplore, which the company had planned to demerge since February.

Orexplore was trialled at two projects in fiscal 2020, Swick said, with the company having recently secured its first commercial contract with St Barbara for its Gwalia goldmine in Leonora.

South Guildford-based Swick is also planning to demerge its drilling business, which entered the 2021 financial year with $363 million in work including with the likes of BHP and Northern Star Resources.

The drilling business includes the new DeepEx division, created in 2019, which comprises rigs capable of drilling up to 3,000 metres – the world's most powerful underground mobile rigs, Swick says.

The company reported a 4.7 per cent rise in group revenue to $149.6 million in FY20, with revenue from overseas operations contributing 30 per cent.

That includes a recent contract with Northern Star for work at its Pogo goldmine in Alaska – Swick’s biggest contract. Its second-largest contract is with BHP for work at the Olympic Dam copper mine in South Australia.

Managing director Kent Swick said the contracts provided a strong platform in FY21.

He said Swick was in a strong financial position, with $12.7 million in cash and $18.5 million in undrawn facilities.

"That has enabled us to win and deliver on new work, invest in new technologies including DeepEx and Orexplore, and continue providing value for shareholders in these uncertain times through dividends and share buybacks," Mr Swick said.

The contractor will proceed with a final, fully franked dividend of 0.3 cents per share, bringing the total FY20 dividend payout to 0.6 cents.

Swick said it had completed its strategic review and was preparing to demerge its drilling and Orexplore businesses.

Its shares were down 4.4 per cent at 3:42pm AEST to trade at 22 cents each.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options