The heavyweights of the S&P/ASX All Ordinaries Index (ASX: XAO) are holding the market at bay today, but a smaller ASX All Ords stock is escaping the fate of its larger peers.
Almost half of all companies within the top 500 index are worse off than their Tuesday closing price in an action-packed day of reporting season.
One might expect a company capable of fending off the red spread would have shared a glowing financial report… but instead, the excitement surrounding this ascent is linked to a sizeable cash injection.
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Funding secured
It's a glorious day to be an SRG Global Ltd (ASX: SRG) shareholder. The company's stock price is up 8.9% to 94.5 cents apiece, while the ASX All Ords is 0.29% weaker.
The outperformance isn't by accident. Earlier today, SRG Global informed investors of its successful $60 million institutional placement, a capital-raising exercise first announced yesterday in association with the 100% acquisition of Diona.
In a $111 million move, SRG Global is acquiring what it describes as a 'leading end-to-end service provider in water security and energy transition'. Despite being in a net cash position as of 30 June 2024, SRG made the financially conservative decision to tap the equity market to cover $60 million of the Diona deal.
The fully underwritten institutional placement saw roughly 72.3 million new ordinary shares issued at 83 cents per share. According to the release, SRG Global experienced 'overwhelmingly strong support' for the placement, exceeding the targeted $60 million.
SRG Global managing director David Macgeorge thanked those who participated in the offer, stating:
We are extremely pleased with the strong support received from both our longstanding and new institutional investors, which confirms confidence in our strategic vision and underscores the significant strategic and financial benefits of acquiring Diona.
We sincerely appreciate our shareholders' backing and are excited to embark on the next chapter of SRG Global's journey.
Furthermore, the funds raised will be deployed alongside a new secured loan and some existing cash on SRG Global's balance sheet to proceed with its acquisition of Diona.
Impressive time for this ASX All Ords stock
Investors are not only reacting to the placement completion for the first time today. Having entered a trading halt yesterday morning, today is the first chance the company's share price has traded since releasing its FY24 full-year results.
All in all, the latest financial year was a dazzling display from SRG Global. Some of the key performance highlights of FY24 include:
- Revenue up 32% from FY23 to $1,069.3 million
- Underlying EBITDA up 23% to $98.5 million
- Total FY24 dividends up 13% to 4.5 cents per share
- Net profit after tax (NPAT) up 27% to $40.3 million
Management instilled further confidence in the company's future, affirming:
SRG Global now has Work in Hand of $3 billion and is well positioned for long-term sustainable growth with end-to-end asset life cycle capability in water, defence, resources, transport and energy transition sectors across Australia and New Zealand.
Finally, the ASX All Ords stock is likely revelling in the company's upgraded FY25 EBITDA guidance. As part of yesterday's result, management increased the current financial year's guidance to $125 million, reflecting a 10-month contribution from Diona.
As shown in the chart above, the SRG Global share price has rallied 30.8% over the past year.
