Emeco (EHL) share price rally’s on AGM comments
Stock
Emeco Holdings (EHL) $2.08 as at 14/11/2019
Event
Mining services company Emeco has seen its shares rocket higher today as it claws back some of its recent retracement. The company is hosting their AGM today and the market has been impressed by some of the comments out of the earthmoving equipment business.
Shares in EHL saw a big turnaround at the full year results in August after beating expectations but not providing overly positive outlook comments. The MD rectified that today by talking up the company’s start to FY20 as trends turn in the company’s favour. The AGM address included 1H20 EBITDA guidance of $118-120m which is slightly ahead of the markets $117m expectations which flows through to a $240m EBITDA at the full year.
The strong start to the year has been driven by robust demand from the Eastern Australian coal while the assets acquired last financial year which drove debt concerns from the market have been integrated are performing to expectations. The trend is heading in the right direction now for Emeco. Utilization rates have been subdued for a while now however these appear to be lifting as the company extracts more out of the assets at hand with western Australian iron ore and gold projects on the rise. Deleveraging is now the key issue with the board looking for debt to drop to 1x EBITDA by FY21.
Emeco Holdings (EHL) Chart
Market Matters Take/Outlook
