Mitchell turnaround paying off

A DECADE of work has paid off with east coast-focused orebody delineation drilling and gas drainage provider Mitchell Services posting a full-year profit of A$7.6 million, up from just $16,000 a year earlier.
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It was also a massive improvement on the $5.9 million loss it posted for FY21.

The profit came on the back of record revenue of $243.1 million, which was up 13.9% on FY22.

There were record earnings before interest, tax, depreciation and amortisation of $41.2 million too, up 28% on FY22.

Operating cashflows of $35.6 million were a 60.4% improvement on FY22.

Thanks to the capital management policy Mitchell Services instituted at the beginning of FY23, shareholders received a final dividend of 2.08c per share.

The policy calls for up to 75% of the company's reported post tax profits to be paid to shareholders as a dividend. There was also a share buyback undertaken.

Mitchell Services executive chairman Nathan Mitchell said a key aspect of the year's success was the completion of the organic growth plan and the implementation of the capital management policy.

"The aggregate of the share buyback payments to date and the FY23 dividend payment represent funds returned to shareholders of $8.5 million, which, when considering the current Mitchell Services market capitalisation, is a remarkable result," he said.

"The company is extremely well placed to continue to return funds to shareholders while reducing leverage to our target of $15 million net debt by June 30 2024."

Net debt at June 30 was $17.6 million, a 55% reduction on June 30 2022.

Mitchell shares closed at 41c yesterday, giving the company a market capitalisation of $89 million.