IPO Watch: Mining services play Primero Group makes headway in ASX debut
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Primero Group made a steady debut on its first day on the ASX – closing the day at a 2.5 per cent premium to its initial public offer price of 40c.
By the closing bell, Primero had traded as high as 45c before edging back to close at 41c.
Nearly 3.4 million shares worth $1.4 million changed hands in over 500 trades.
Primero’s debut — the first new “mining services” listing in about seven years — follows the completion of a successful $25 million IPO.
Mining services companies provide machinery, labour and consumables to undertake mineral extraction activities for miners. Here’s an article we wrote on the sector in February.
GR Engineering Services (ASX:GNG) was the last mining services company to list on the ASX following a $30 million initial public offer. That was back in April 2011.
Primero has been around for almost seven years and emerged to fill a void in engineering, procurement and construction (EPC) services to the mining sector.
The company managed to capture a good chunk of the market and since then has turned over about $250 million worth of work. It now has offices in Western Australia and Montreal, Canada and more than 320 staff – which is expected to grow to 450 early next year.
Primero operates in three sectors – minerals, energy and non-process infrastructure.
While Primero sees all three sectors as growth sectors over the next three to five years, a large chunk of the company’s work comes from the lithium sector in particular.
For the 2018 financial year, Primero expects revenue to be around 53.4 per cent higher year-over-year at $79.9 million, pro-forma EBITDA to more than triple to $8.6 million and pro-forma net profit after tax to be nearly four times what it was a year ago at $4.7 million.
Rafaella Resources ‘nearly there’
Junior cobalt explorer Rafaella Resources was also due to make an appearance on the ASX this week, but might be slightly delayed.
Executive technical director Ashley Hood told Stockhead that Rafaella has raised the full $5 million it was targeting and is “nearly there” with its ASX listing.
“We’ve got essentially unconditional approval in writing, but that’s still pending on [the ASX’s] last minute [due diligence],” he explained.
Mr Hood said if Rafaella doesn’t make the July 12 target date it will most likely be the week after.
The company was previously aiming to light up the boards of the Australian bourse in early April.
Rafaella holds a right to acquire the McCleery cobalt and copper project in the Yukon Territory, Canada and is acquiring the Sandstone gold project in Western Australia.
Meanwhile spy satellite maker Kleos Space is also waiting to launch on the ASX and Stockhead understands it will ring the bell by the end of July.
The company was pencilled in for take-off on Monday but the date has been put off a few weeks as the business does the final paperwork ahead of listing. The satellite intelligence provider launched its $11 million IPO in May, selling 55 million shares at 20c each.
Kleos says there’s nothing major slowing the company’s listing process and it should be set to go by the end of the month.
Also due to the list this week are Eden Health (July 11) and Keytone Dairy (July 13).
The ASX so far has 36 floats registered to list this half — including the $200 million Nickel Mines prospectus that launched on Thursday.
Guided by mining entrepreneur Norm Seckhold, it will be the biggest Australian resources IPO since Jupiter Mines (ASX:JMS) in April.