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¢.