Perenti reports 87% leap in expected cash flow for FY25
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The news: Perenti shares climbed in early trade after the mining services business flagged that free cash flow for the 2025 financial year is expected to exceed previously issued guidance, based on preliminary unaudited results.
The numbers: Shares were up 3.5% to $1.77 at 11am AEST, extending gains of 83% over the last 12 months.
Perenti expects cash flow from operations to be around $280 million, about 86.7% greater than the $150 million guidance previously issued.
The strong cash flow is expected to reduce net debt, resulting in improved leverage of 0.5x as at 30 June. Previously issued guidance had flagged a leverage range of between 0.6x and 0.7x.
The context: Perenti said the improved position was supported by subsidiary Barminco ending its mining services contract in Botswana in April. The business subsequently received $75 million from the sale of property, plant and equipment located at the site, along with an additional $17 million in relation to the inventory on site.
Perenti also flagged improved working capital outcomes with cash flow conversion above 95% and reduced net capital expenditure for FY25 of $30 million less than guidance.
Guidance for full-year revenue and earnings before interest, tax and amortisation provided on 17 June is unchanged. FY25 audited financial results and commentary on future outlook will be released in late August.
