Construction materials company, Maas Group Holdings Limited (ASX: MGH), made its ASX debut today. The company’s shares floated through an initial public offering (IPO) at a price of $2, raising $145.6 million.
In roughly an hour since trading began, the Maas Group share price has risen by 30% to $2.60 (at the time of writing).
The company also provided a business update prior to the opening bell, saying it’s performing in line with internal budget forecasts, and is continuing to build its forward order book.
What did Maas Group announce today?
Maas Group says the business remains on track with earnings to be second-half weighted in line with the growth in construction materials, civil and hire and property segments.
The company advised it has restructured its balance sheet, and has the liquidity to allow it to take advantage of opportunities as they present themselves.
Maas Group reported its construction materials business is on track, and production at its fixed plant quarries is in line with its budget. It expects to bring in an additional quarry in the second-half.
The plant hire and civil business is tracking ahead of its internal budget, and has a strong order book flow in the pipeline.
Meanwhile, the company’s residential housing estates and commercial property projects are also tracking as planned.
However, Maas Group reported that its underground business has experienced a decrease in utilisation due to some large hire contracts running off. The company expects this to return to normal in the second half.
More about the Maas Group IPO
Maas Group was founded by a former NRL player, Wes Maas, a fringe player who played for the Parramatta Eels and South Sydney Rabbitohs in the 1990s.
The Dubbo-based business has raised $145.6 million in the IPO, pricing it at $2 a share.
According to the prospectus, the company posted $221.8 million proforma revenue in fiscal 2020, and $64.7 million proforma earnings before interest, tax, depreciation, and amortisation (EBITDA).
Those earnings are split fairly evenly between its four business divisions. The four divisions are civil construction and hire, construction materials, real estate, and underground equipment and services.
The company manages a fleet of more than 300 construction vehicles, has 600 employees, and undertakes major projects alongside the likes of Boral Limited (ASX: BLD) and Lendlease Group (ASX: LLC).
According to the prospectus, Maas Group expects to pay out a dividend yield of 2.5% from the outset.
Following its IPO, and based on the current Maas Group share price of $2.60, the company commands a market capitalisation of around $689 million.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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