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MLG, MLG OZ Limited
nipper
post Posted: May 3 2021, 08:10 AM
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In Reply To: nipper's post @ May 3 2021, 07:58 AM

Truck driver who left school at 14 hits top gear with $148m listing


Murray Leahy left school at 14, did an apprenticeship as a boilermaker and then started driving trucks. It is a road that has taken him all the way to listing his company, MLG Oz Limited, on the ASX on Tuesday with a market capitalisation of close to $150 million.
The 46-year-old will retain a half share and stay on to run the show at the company he founded, and up until now has owned outright, that boasts a client list including BHP, Fortescue Metals Group, Newmont, Northern Star, and a host of other gold, copper and nickel producers.

West Australian-based MLG has a fleet of 110 trucks at a good time to own trucks and have the people to drive them. It is also a good time to be based in the gold mining mecca of Kalgoorlie.....

MLG is a big trucking company that trains and retains a lot of drivers, but it is not just a trucking company. Nor is it a variation on the diversified mining services and mine ownership model that has proved so successful for Mr Ellison, who left school at 15, although there are some similarities.MLG is a unique business that provides the wheels in terms of the bulk materials and machines that make mines work and allows them to get ore and exports where they need to go.

It supplies bulk materials; sand, aggregate, cement, lime , from a string of company-owned quarries. It does site and civil works, ore crushing and screening, produces road base and concrete aggregate.

And, with a total fleet of 925 heavy vehicles and support equipment, MLG does a lot of haulage on mine sites and off as well as providing import and export logistics.

Mr Leahy saw the road ahead to the diversified business while behind the wheel of a truck. Like a lot of farmers, the Leahy family had run trucks as a side business but were drawn to Kalgoorlie by the opportunities in haulage and a rising gold price. Mr Leahy went his own way after leaving school but was tempted back to the family business by father Tim after it won a haulage contract with the Western Mining nickel business, now under the umbrella of BHP as Nickel West.
QUOTE
We quickly worked out that while we were good mates, we couldn't work together, Mr Leahy recalls.

Dad grabbed me in the yard one day and said 'You are either buying out this side of the business or you are leaving. You make up your mind'.

I trotted off at 25 to NAB in Kalgoorlie and begged for $850,000 and fortunately they were accommodating enough to put plenty of mortgages around my neck and lent me the money and that was where MLG was born.

I'd always had the desire to work for myself but my dad forced my hand to a degree. My dad is 6′4 [1.93 metres tall] and of strong Irish Catholic descent and diplomacy was never his strong point.

I am forever grateful that he taught me really strong fundamentals from the get-go. There was nothing for nothing, you needed to plan, protect, assess risk. It was really his way of ensuring I was geared to be able to run a business.
MLG now employs about 650 people plus 80 contractors. The first 17 people Mr Leahy hired after founding the business in late 2001 are still on board and all of them took part in the IPO that raised $70 million in a canter at an offer price of $1 a share.

Mr Leahy, who took $20 million off the table through the IPO, will retain 50.1 per cent of the stock when MLG lists with a market capitalisation of $145.7 million. His father will also have a stake.

MLG has forecast pro forma earnings before interest, taxes, depreciation, and amortisation of $41 million for 2020-21 and revenue of $241 million.

The lion's share of revenue, 82 per cent, comes from the gold sector, 14 per cent from iron ore with MLG doing ore crushing at Fortescue's Christmas Creek mine since 2013 and the rest from base metals.

A lightbulb moment came for Mr Leahy when he realised miners were employing four or five different contractors to perform tasks that MLG could perform as a diversified business.

Big miners now on its client list had construction materials businesses supplying aggregate and sand, crushing contractors doing the crushing, haulage contractors doing the haulage, civil contractors doing civil work on site and specialist contractors doing road construction and maintenance.

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Through the early 2000s when I was sitting behind the steering wheel of a truck, I started looking at what opportunities sat out there to be able to value add, he said.We first identified there was a huge hole in the market for the supply of construction materials to the mining industry.


Through a period in the 2000s as mining houses shed ground during an industry downturn, MLG picked up hard rock quarry and sand deposits in strategic locations throughout WA and into the Northern Territory. It started supplying miners from much closer to home than big players operating centralised quarries and carting material long distances.

Mr Leahy soon realised his trucks, crushers and other machinery together with the skills of the MLG workforces could be put to use in plenty of other ways.

The big breakthrough came when he convinced gold giant Barrick that MLG could do it all at the Lawlers mine in WA.

QUOTE
They had five different providers on site and we said we can do the whole lot.
They were cautiously inquisitive and I said guys if this doesn't work, I'll do it for free.
That was the supercharger that validated the business model and since then it has just been a matter of growing as equity has allowed.



Mr Leahy sees the trend to mining more ore and running ever bigger processing mills to drive down costs in the WA gold industry as working in MLG's favour in the future.The good part about that is unless you build rail, and no gold company will because the volume and mine life is not there to justify it, the only way to deal with the logistics and movement of the material is via road train," he said.

That is where we see a large portion of our opportunity coming in the not-too-distant future. It is this shift to bigger mines with bigger mining fleets with bigger processing facilities and more volume. There's more ore coming in, more ore to be crushed, more tailings to be looked after, more roads to be maintained.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: May 3 2021, 07:58 AM
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Posts: 8,937
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MLG OZ Ltd (MLG) is the holding Company of the MLG Group, which provides a range of general services to mine sites. MLG's offering includes crusher feed, road maintenance, rehabilitation work, vehicle maintenance, machine and labour hire and mine site haulage. MLG's site service offering has expanded over time to incorporate further services that are considered non-core to the client but are nevertheless essential to the day-to-day activity of the mine.

MLG currently operates across 29 sites throughout Western Australia and the Northern Territory for a diversified client base of domestic and international mining companies, which are exposed to a range of commodities.

MLG is headquartered in Kalgoorlie, Western Australia and, as at 31 December 2020, MLG had 569 full-time employees, 35 labour hire employees and 52 subcontractors.

QUOTE
The Company's continued pursuit of new clients and expansion of its service offering has resulted in consistent historical growth with:
  • ... pro forma historical revenue growing from $132.7 million in FY18 to $205.1 million in FY20 (a CAGR of 24.3% over that period), and forecast to grow to $241.6 million in FY21;
  • ... pro forma historical EBITDA growing from $15.6 million in FY18 to $24.5 million in FY20 (a CAGR of 25.3% over that period), and forecast to grow to $41.0 million in FY21.
It is anticipated MLG will list on the ASX this week. The issue, fully underwritten, by Bell Potter Securities Limited and Morgans Corporate Limited as Joint Lead Managers and Underwriters, will raise $70Million, at $1.00 a share






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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
 



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