Profitable Micro-caps (Revenue greater than $10m)

[percy]

Yes all good Corp. Also liked the increasing Hydraulics operations.For 6 months rev was 5% and ebitda 10%. Longterm growth target of 25% of operations.
Demand exceeding supply continues....... GROWTH< GROWTH and GROWTH.

Any comments steve? cheers ps new holders continue to appear . ops Thanks NZ SILVER anyway. .If anyone still wants the research report PM me.

Joshuatree.
Thank you for sending me the report.Reading that, the interim report ,and the interim report presentation kept me busy.I was very pleased to see current assets now exceed current liabilities.The increase of 25.9% ie 34 up from 27 rigs in the last 6 months was most impressive.The out look for the revenue and nett profit to nearly double over the next two years sent me directly to the phone!! Now a shareholder too at 38.5cents.!!!!!

[percy]

HDX Trading Halt;"share sale and purchase agreement?"
Well every trading halt lately has been good for me.

[Corporate]

Thanks Percy - I wonder what this entails?

[Joshuatree]

Maybe buy out of minority holder of subsidiary Express Hydraulics?

[steve fleming]

Maybe buy out of minority holder of subsidiary Express Hydraulics?

Express Hydraulics is 100% owned by HDX.

It was a strangely worded announcement - all of HDX's subsidiaries are 100% owned so but strange that they referred to its "majority held subsidiary". In fact on my first reading of the announcement I thought that it might be referring to a third party acquiring assets of HDX...anyway, the good thing is the interest/price increase leading up to the annoucement - for the first time in weeks buy depth has exceeded sell depth.

[Joshuatree]

" the good thing is the interest/price increase leading up to the annoucement - for the first time in weeks buy depth has exceeded sell depth."[/QUOTE] Thanks Steve may be whatever this is it will be the impetus for the s/p, cheers

[macduffy]

I reckon it's about time HDX had its own thread.

From today's Aussie press:

"
Queensland-based mining contractor Hughes Drilling is seeking to raise $17.5 million through Baillieu Holst.

The company is looking to sell 54.7 million shares in a placement to institutional investors at 32¢ each. The offer was priced at a 17.9 per cent discount to the stock’s last close and a 13.1 per cent discount to the 30-day volume weighted average price.

It was structured as a two-tranche placement. The first tranche was for 30.6 million shares.

Hughes Drilling was expected to offer existing shareholders new stock on the same terms through a share purchase plan.

The raising comes a fortnight after Hughes Drilling released profit before tax up 78.2 per cent on the prior year, and above the company’s guidance.

Potential investors were told Hughes Drilling had not experienced a slowdown in demand for its services, despite a slowdown in the wider mining services sector.

Hughes Drilling’s largest shareholder is Learob Pty Ltd, owned by the company’s founder and managing director Robert Hughes. "

I hold a (very) few HDX, a legacy of an optimistic buy in the horribly-named Every Day Mine Services (EDS) which was backed into Hughes, suffered a ten for one consolidation - or should that be one for ten? - but now has some prospect of returning at least some of my investment.

[mark100]

I don't follow HDX closely but thought I would post this note as it was released today from WHTM. A bit odd considering the results were out over 2 weeks ago and a raising has already been announced and yet is wasn't even mentioned in the note. Ceasing coverage after only initiating coverage late last year. Maybe they are p!ssed they didn't get to handle the raising. This analyst had a buy on ABC Learning right up until it's death and a sell on Flight Centre at $4.50 in the GFC so I wouldn't place much weight on what he writes.

"Hughes Drilling Limited announced an interim profit of $5.5m which is in line with company guidance and our forecasts. The result benefited from an increase in the number of rigs over the period. At period end the company had 34 drill and blast rigs compared to 27 at June 30. The company has continued to purchase new rigs and has clearly breached its current bank covenants again. An equity raising (est $10-15m) is needed in the near term to significantly strengthen the balance sheet. The accounts have a qualified conclusion. The business is probably sound but there is a lot of work to do before this company is investment grade. Ceasing coverage"

[steve fleming]

Sounded like a number of brokers (Wilsons, Cannacord, Ballieu) were all trying to position themselves to get the cap raising....therefore pretty surprising and disappointing that 32c is the best they could do.

The other thing is given how cheap HDX is trading, I don't know how earnings accretive an acquisition is going to be, unless they can get something at less than 2x EBITDA, which seems highly unlikely.

[steve fleming]

Sounded like a number of brokers (Wilsons, Cannacord, Ballieu) were all trying to position themselves to get the cap raising....therefore pretty surprising and disappointing that 32c is the best they could do.

The other thing is given how cheap HDX is trading, I don't know how earnings accretive an acquisition is going to be, unless they can get something at less than 2x EBITDA, which seems highly unlikely.

Hughes Drilling’s institutional placement closed over-subscribed on Wednesday night, with the company raising $17.5 million through Baillieu Holst. The book was due to close at 2pm on Thursday, but it is understood the deal was closed early after receiving adequate demand. The company was looking to sell about 54.7 million new shares at 32¢ each. It was a 17.9 per cent discount to the last close and 13.1 per cent discount to the 30-day volume weighted average price. The offer was to pay for the acquisition of ReichDrill, a supplier of production rigs. Hughes Drilling agreed to pay $US8.9 million for the purchase, which was equivalent to about 10 per cent of Hughes’ market capitalisation.

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Interesting - HDX is buying out its sole supplier/manufacturer of drilling equipment. Vertical integration to drive margins I guess. Will also diversify HDX's revenue streams, reducing reliance on NSW/QLD coal.