Ausdrill has resumed trading and its share price is going ballistic

1210

The Ausdrill Ltd (ASX:ASL) share price has jumped 17 per cent higher in late Friday morning trade after the mining services company successfully completed its institutional entitlement offer.

The offer raised $175 million at a share price of $1.47, with Ausdrill expecting to raise $250 million in total.

The funds are to be used primarily for the acquisition of Barminco, one of Australia’s  leading underground hard-rock mining contractors. Ausdrill are paying around $270 million to acquire the equity in Barminco. The transaction would broaden Ausdrill’s strategic footprint to be Australia’s clear number two mining services company.

In what could be a case of perfect timing, in its July monthly update, the Perennial Value Australian Shares Trust said it had established a position in Ausdrill.

In late morning trade on Friday, the Ausdrill share price has jumped 29 cents or 17 per cent higher to $2.00.

Earlier this week, Ausdrill reported FY18 profits had jumped 96 per cent higher to $61.1 million. The company declared a full year dividend of 7 cents per share, an increase of 75 per cent.

With Ausdrill shares price now at $2.00, the company trades on a trailing dividend yield of 3.5 per cent.

Contributors to this article may own shares in some of the companies mentioned in this article. The Capital Club has a thorough disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
Avatar
Bruce Jackson has 30 years of hands on investing experience. He is passionate about stock market investing, running his own portfolio and SMSF. His focus is on small cap growth stocks. You can contact Bruce at brucej@thecapitalclub.com.au