In its latest financial year (FY) report for 2024, global mining services company Austin Engineering (ASX:ANG) says it is continuing to assess potential strategic merger and acquisition opportunities, amid projecting capital expenditure to rise to $10 million.
The potential M&A will aim to improve the company’s geographic capabilities, customer offerings, production capacity, and product footprint, and will continue to leverage its economies of scale.
Austin Engineering, which has a market capitalisation of $360.73 million, says while actively pursuing deals, there are currently no opportunities considered sufficiently advanced to disclose at this time.
CEO David Singleton says following investment in operations and senior management, the company is making good progress towards a fully integrated global business, seeking to leverage its comparative scale.
“As a result, we have invested important resources on the IT systems necessary to enable this, an approach that will continue into the new year,” Singleton says.
The company says the FY25 guidance includes a revenue increase of 12% to circa $350 million, and an underlying earnings before interest and tax increase of 30% to $50 million.
Operationally, Austin plans to continue driving product and manufacturing improvements in FY2025, as a way to improve revenue and protect margins.
For FY2025, Austin Engineering plans to continue focusing on meeting customer demand for more efficient, customised solutions. The company says this approach will boost sales and drive “high levels” of recurring revenue.
During FY2024, the company’s group revenue totalled $313.2 million, representing a 21% increase from the previous financial year which was $258.3 million.
Austin Engineering generated a 131.6% increase in cash conversion with continuing operational cash inflow of $36.6 million, driven by improved profitability and effective working capital management.
The company’s order book at the end of FY24 was up 30% to $187 million.
Singleton says this year’s results reflect a doubling down on the company’s 2.0 operational strategy, which has led to increases in revenue, forward order book, and a much stronger cashflow positon.
“Our improved financial performance has been driven by a series of initiatives designed to enhance operating efficiencies and lower costs across our business units, which has led to a continued growth in margins,” he continues.
“Our order book has been growing on average 44% per annum since we implemented Austin 2.0 in 2021. This is due to a combination of Austin building its product range and increasing the size and manufacturing capacity of our facilities across all business units.”
Austin Engineering’s North American business achieved a strong year of revenue growth. North America now has 1,670 trays in service hauling circa 28 million tonnes of ore per day.
Revenue in FY24 also increased by 27% year-on-year to a multi-year high of $95.5 million, and the North American order book grew 78%.
The company’s South American business continues strong operational and financial improvements, recording a 26% increase in revenue, primarily through growth of rebuild and maintenance sales which were up 63% in FY24.
Meanwhile, the Asia Pacific business saw its revenue increase by 17% due to an increase in truck tray sales from Batam, and sales of bucket and bucket rebuilding following the re-tooling of the Perth facility.
Austin Engineering is a global engineering company that has partnered with mining companies, contractors, and original equipment manufacturers to create innovative engineering solutions that deliver productivity improvements to their operations.
The company is headquartered in Perth, Western Australia, and also has operations in the US, Chile, and Indonesia.
Write to Aaliyah Rogan at Mining.com.au
Images: Austin Engineering
