The Courier-Mail

Mitchell backs cost con­trol strat­egy


IT HAS been a tough year for drilling op­er­a­tors and Bris­bane’s Mitchell Ser­vices ar­gues the right strat­egy is to con­trol costs while stay­ing in the mar­ket.

Mitchell chief ex­ec­u­tive An­drew Elf said of the short­term sec­tor out­look: “We’re see­ing it just bump­ing along.

“The trick for us is re­ally just to stay in the ball game and con­trol costs.” Mr Elf was speak­ing as Mitchell, which made two counter-cyclic ac­qui­si­tions in the past 12 months, posted a $17 mil­lion loss, deeper than the $4.6 mil­lion of a year be­fore.

Mitchell said the “un­der­ly­ing” pre-tax loss, which strips out fac­tors such as good­will write­down, im­proved from $5.6 mil­lion to $4.2 mil­lion.

Mitchell, with 130 staff, has, since Au­gust last year, gone against sen­ti­ment and bought two out­fits, adding 54 drills.

The latest deal in June was for Nitro Drilling for $16 mil­lion, bought from liq­uida­tors.

Mitchell had es­ti­mated the re­place­ment value of the equip­ment was $84 mil­lion.

Mitchell shares closed flat at 1.7¢.

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