Investment Matters

Company News: Moreton, Paragon and Worley

Moreton Resources released a progress report in regard to its Metals division; the silver mine based in Texas, Qld.  Silver production from leaching operations (heap 4) are ramping up meaningfully.  This will translate into significant cash generation over the coming months.  Looking longer term, the company is actively planning for the processing of the remaining heaps, a restart of the mine, and exploration drilling to define opportunities (various metallic prospects around the Twin Hill mine).

***

Threat Protect has completed the acquisition of Onwatch, as announced in early March.  This acquisition meaningfully increases the scale of Threat Protect's operation.  As part of the financing of the purchase, clients have acquired additional shares under the rights offer and as part of the conversion of a convertible note into equity.

***

Paragon Care released a quarterly update for the period ending 31-Mar-19.  It advised it still expects to meet its FY-19 guidance for the continuing business of $240m revenue and $28m in earnings (EBITDA).  Operationally, it is progressing the transition to a single IT platform, and a company-wide cost out program.  The divestment of the legacy capital equipment business did not achieve a whole of entity sale, and is thus going to be progressed by breaking that business up.

***

WorleyParsons announced it has completed the major acquisition of Jacobs' Energy, Chemical and Resources (ECR) division.  Clients became shareholders in WorleyParsons when this acquisition was announced in October last year.  As a reminder, this is what we wrote at the time:

"The acquisition of Jacobs’ ECR division was at an attractive price (11.5 x EBITDA pre-synergies, 8.5x post cost synergies), and allows WorleyParsons to broaden its capabilities (e.g. increased capability in downstream hydrocarbons and chemicals).  Additionally, WorleyParsons expects to achieve significant synergies. 

We consider WorleyParsons to be a company with quality management, and strong execution ability in the sectors in which they operate.  Additionally, with low exposure to lump-sum style contracts, they have a favourable operational risk profile."

In conjunction with this announcement, it also proposed to change its name to Worley (to be ratified by shareholders at the Oct-19 AGM).

***

Following press speculation and an uptick in the security price, Aveo provided an update on its strategic review process: due diligence by parties interested in purchasing the whole Aveo entity is continuing.  Obviously we will provide updates in IM as they are released by Aveo.

- Fleur Graves