Of the dividend paying companies, some stocks remain distinct not only these being high quality dividend paying stocks but also because of their growth potential.
Perenti Limited (ASX: PRN)
Perenti Limited has delivered strong financial results for the half-year ending December 31, 2024, positioning itself well to meet its full-year guidance. The company achieved record revenue of $1.73 billion, reflecting a 6% increase compared to the prior period. Underlying EBIT(A) rose by 3% to $155 million, while underlying NPAT(A) increased by 4% to $82 million. However, statutory NPAT declined to $64 million due to the non-recurring $29 million non-cash gain on the DDH1 acquisition recorded in the previous year. Despite this, Perenti remains financially strong, with adjusted free cash flow reaching $30.6 million and expectations to exceed $150 million for the full year.
The company continues to demonstrate resilience across its diversified mining services portfolio, particularly in contract mining and drilling services. The Drilling Services division, formed through the integration of Ausdrill and DDH1, has delivered operational synergies, positioning Perenti as the second-largest global drilling company based on total metres drilled. Contract Mining remains a strong performer despite challenges such as the underperformance of the Zone 5 underground project in Botswana and the closure of three Australian nickel operations. Perenti's ability to redeploy personnel and equipment across projects highlights the flexibility and stability of its operations.
Capital management remains a key focus, with Perenti declaring a 3.0 cents per share interim dividend, an increase from 2.0 cents in the prior corresponding period. The company also completed a $15.9 million on-market share buyback and partially redeemed $100 million of its 2025 US senior notes, further strengthening its balance sheet. Net capital expenditure for the period was $163 million, aligning with the company's full-year forecast of approximately $330 million.
Perenti continues to prioritise safety, implementing several initiatives, including increased critical control checks, fatigue monitoring systems, and real-time underground gas monitoring. The company remains committed to achieving zero adverse life-changing events and fostering a strong safety culture across its global operations.
Perenti maintains a robust work-in-hand portfolio valued at $4.7 billion, with a pipeline of potential work totaling $17.1 billion. A significant milestone was the securing of the Goldrush Underground project for Nevada Gold Mines, marking Barminco’s first underground contract mining project in the USA. This expansion into the North American market presents significant growth opportunities.
With strong operational performance, disciplined capital management, and a promising project pipeline, Perenti has reaffirmed its FY25 guidance. The company expects revenue between $3.4 billion and $3.6 billion, EBIT(A) of $325 million to $345 million, leverage between 0.6x and 0.7x, and free cash flow exceeding $150 million. These factors collectively position Perenti for sustained growth and continued value creation for shareholders.
(Source: Company's Report)
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