RUL has surged higher, with our position now up over 50%. Two strong catalysts in the last week underpinned the move:
- Strong FY26 guidance when they reported FY25 results on the 28th August
- An indicative non-binding bid from Caterpillar (CAT US), with price and details yet to be disclosed.
For FY25, RUL reported revenue up 6% to $76.7m with underlying earnings (EBITDA) of $6.2m, up 32%. The statutory profit of $47.5m was big due to the sale of their consulting division in the period; however, it was their guidance for FY26 that really got the market (& Caterpillar) excited. Revenue was guided to $88-92m with earnings expected to be $23-25m, which was ~14% ahead of consensus. As we’ve highlighted in the past, RUL were on the cusp of strong earnings growth after a long period of investment.
It’s therefore very understandable why CAT is now keen to acquire the mining technology business, and we think the price will be north of $5 if they are successful. There have been multiple parties interested in the past, and we believe there is a strong possibility that this will become a contested battle. For Caterpillar, RUL would be a fantastic opportunity for them to embed digital, mine‑planning horsepower into their existing strength in mining hardware. Consolidated field-to-office workflows could be a game‑changer.
- With the business scaling well, and multiple bidders running the rule over RUL, we plan to sit back, wait this out, and see where it lands.
MM remains long and bullish RUL
Add To Hit List
