Mader released AGM report and presentation here.

Notable things for me:-

• Upgraded guidance to $510m rev and $33m NPAT for FY23
• North America operations and Mader Energy and infrastructure maintenance are in high growth phases, which are coming through in the numbers.
• Their 2 x start-ups have broke even. Mader Energy in Fort Worth US, broke even in June 2022. Canadian operations broke even within 6-months of operations.
• Only 1.5% of sites in Canada engages, 2% in the US, compared to 77% in AUS.

Mader has had an exceptional quarter, which has helped the company far exceed its FY22 guidance of $370m revenue to achieve $402.1m unaudited. This will translate into record NPAT profits.

Most of the growth is still coming from its core service offerings however the commentary from management indicates there are some good opportunities for their business expansion plans into adjacent industries particularly in North America, which is only in its infancy.

See results here. And below my QoQ business tracking.

Mader provided a quarterly update this morning. Results vs PCP look great, however QoQ is a little more subdued with EBITDA actually decreasing. Revenues continue to grow consistently. The North American expansion is where most of my attention lies and as you can see from the QoQ table I've been tracking below this segment is accelerating.

Mader reaffirmed their full year guidance however they are on track to exceed.

Management expect continued strong performance for the year due to growing demand for services. NPAT forecast of $24m which is about $0.12EPS. At about $2.20 SP thats a forward PE of just over 18x.

Margins have been very consistent which shows the demand for Mader services makes it easy for the company to pass on any cost increases to its customers.

Mader is expanding and increasing optionality. Some exciting points made in the presentation:-

• First revenues from Canada were recorded this quarter
• Mader Energy is launching and has secured some contracts already with first revenues to come in Q3 FY22. (the company did not disclose the value or extent of agreements secured)
• Company secured a large $20m contract for FY23 locking in some future revenues
• Company infrastructure maintenance division increase 63% vs PCP

Q1 trading update - Mader

Ive broken down the numbers into a quarter on quarter format, see below. As you can see FY20 reflected relatively flat sales numbers overall. The North America operations were in their infancy and growth was seen however this was offset by "Rest of the world" (which is mainly developing nations) that were heavily affected by Covid. Now that (hopefully) the worst of Covid and lockdowns are behind us Mader's growth is accelerating.

Interesting points in the update:-

• Strong demand for commodities has Mader's customers bringing idle fleets of machinery back online. If these fleets were shut down due to soft commodity pries in the past, then this will more than likely occur again in the future if the cycle turns back down. However in the meantime, its happy days for Mader and you have to make hay while the sun shines.
• Mader employed personnel to target infrastructure maintenance, which would add another revenue stream in future. This area generally has predictable income if contracts are won.
• Part of the management team relocating to the USA and Canada. This to me is where their main growth driver of the business with huge opportunity. This signals to me the company will focus more heavily on this region even though it makes up only a small fraction of sales currently. Hopefully they can execute this strategy.
• Rest of the world operations still affected by Covid. This should ease as the world gets vaccinated and opens up.
• Guidance re-affirmed. Based on this quarterly, looks like they are on track for upper end of that guidance.

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02441104-6A1058191?access_token=83ff96335c2d45a094df02a206a39ff4

A very nice quarterly update from Mader Group. The market is giving this company absolutely no credit and it trades at an extremely cheap multiple.

Net debt increase of $23.3m up from $4.9m from PCP is not overly concerning but something to keep a close eye on. The statement says, “the moderate increase on PCP reflects the significant revenue growth between Q3 and Q4 FY21, requiring an increase in the investment in working capital for the business.” Id be more comfortable with this if they went into specifics on what they are using the capital for, maybe someone else can shed some light?

Highlights of announcement below.

• Record quarterly revenue of $86.4m, up 24% on the prior corresponding period (PCP), and up 14% on the previous quarter. Second consecutive quarter of record quarterly revenue.
• FY21 revenue of $304m, above consensus forecasts, and up 11% vs FY20.
• Revenue generated in Australia increased to $77.0m, up 21% vs PCP, driven by high levels of customer demand. Revenue up $8.7m, up 13% vs Q3 FY21 indicating growing momentum throughout the business.
• In North America, quarterly revenue increased to A$6.8m, up 45% vs PCP excluding foreign exchange movements (30% on an A$ basis). Preparations for operational delivery into Canada now complete with customer negotiations well advanced.
• Rest of World operations generated A$2.6m in revenue, up 568% vs PCP. Growth across active regions has continued to be impressive despite mobility and health restrictions.
• Revenue growth delivered and sustainable profit margins maintained due to the unique Mader business model which is broadly protected from labour market conditions due to our in-house skilled labour and flexible pricing terms on which it is engaged by customers.
• Continued growth in activity levels across the global mining industry and improving personnel mobility levels continue to underpin a positive growth outlook for the business into FY22

The headline numbers showing growth on PCP are from the midst of the pandemic in Q4 last year, which I think is important to point out and put them in context. Nevertheless, see attached table with improvements on Q3 FY21, which I think gives a clearer picture of the improvement.