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The West Australian
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10 April 07
Mining camp owner and operator MAC Services Group is planning a big push into WA’s resources sector once it completes its heavily backed $210 million sharemarket float this week.
Founder and executive chairman Kevin Maloney said more companies were looking to outsource the ownership and operation of mining camps, and the WA iron ore sector was a prize market for the company to expand beyond its Queensland coal stronghold.
The company’s $74 million initial public offering closed heavily oversubscribed last week, with its share register now boasting 34 institutions plus a who’s who of Australia’s richest families, including the Packers, Lowys, Smorgons and Pratts.
But Thursday’s listing comes amid a turbulent market for new floats after last week’s disappointing debut by global drilling giant Boart Longyear. Boart raised $2.35 billion, the biggest float in more than two years, and while it started trading slightly above its $1.85 issue price it slipped to $1.80 at the end of its first day, leaving investors almost 3 per cent under water.
Mr Maloney, a former Elders Resources executive, set up MAC Services in 1996. It now has more than 3300 rooms in four villages in Queensland’s Bowen Basin. He remains the biggest shareholder with about 60 per cent worth $136.5 million at the $1.50 issue price. “The business model that we have developed in Queensland has Australia-wide and international application,” Mr Maloney said.
He said the WA market was largely made up of company-owned villages run by an external manager but more companies were opting to outsource the building, owning and operation of mining camps to cut up-front costs.
“With floating everyone is looking for growth and expansion and we are looking first and foremost at bolt-on arrangements in Queensland and looking at WA because, as far as resources is concerned, WA is the largest growth State in Australia and probably ranks only second to the oil and gas and oil sands boom in Alberta, Canada as far as money being spent on resource projects,” Mr Maloney said.
“If you look at WA there are six new iron ore projects in the Mid-West and they all need facilities, then there are a list of others around Karratha and Port Hedland.”
MAC Services has forecast a net profit for the 2007 financial year of $12 million, increasing to $16.2 million in 2008. The bulk of the money raised is to be used to pay down bank debt and shareholder-related debt.