Shares in Maas Group Holdings Ltd (ASX: MGH) are gaining today after the company released an update on its earnings and acquisitions. At the time of writing, the Maas Group share price is trading at $5.90 – 2.08% higher than Friday's close.
However, earlier today, the Maas Group share price gained 9.3% to reach an intraday high of $6.32.
Maas Group provides construction materials, equipment, and services and has vertically integrated interests in real estate.
Let's take a look at today's news from Maas Group.
The latest from Maas Group
The Maas Group share price reacted positively after the company released a market update detailing its earnings and acquisitions since its initial public offering (IPO) in December 2020.
It also confirmed its earnings guidance for the current financial year, for which it expects to announce earnings before interest, tax, depreciation, and amortisations (EBITDA) of between $70 million and $77 million. That figure excludes the impact of the acquisitions announced by the company in April.
Maas Group has also successfully increased its Australian debt facilities from $160 million to $200 million. It also has access to another $100 million of funding for commercial property purchases.
The additional debt facilities leave the company with pro forma liquidity of $132 million.
Real estate acquisitions
Since December, Maas Group has spent $47.3 million on commercial and industrial real estate acquisitions, including:
- Dubbo's Quest Serviced Apartments, for which Maas has entered a binding heads of agreement to purchase.
- Spacey Self Storage, a storage business with assets in Dubbo, Bathurst, Albury, and Canberra.
- The Southlakes Childcare Centre, for which Maas has now signed a lease agreement with a childcare operator.
- A 45% share in the Badgery's Creek Development in the Western Sydney Airport development.
Maas Group expects its commercial real estate acquisitions to bring in $2.8 million in pro forma EBIDTA. However, the company doesn't expect the new acquisitions to contribute to its statutory EBITDA in the 2021 financial year.
Maas Group has also exercised options it held for 2,005 lots in 3 residential developments, located in Shepparton and Tamworth. However, one development is still dependant on shareholder approval, while another is dependent on financier consent.
Additionally, Maas has entered contracts regarding 4 new developments located in Bathurst, Lithgow, and Dubbo. The 4 developments could see the group paying $18 million for 552 residential lots.
The new developments, combined with Maas Group's existing real estate pipeline, could provide the company with 15 years of subdivision sales.
The company expects to settle 227 lots this financial year, which is above its prospectus' guidance. It also expects to settle around 300 lots in the 2022 financial year, with 125 lots already under contract.
Business acquisitions
Maas Group is also planning to acquire 6 commercial and civil construction businesses. Most of the acquisitions are subject to conditions including shareholder approval. The businesses include:
- Stanaway Pty Limited, a central NSW-based residential, commercial, and industrial construction company, for a total potential consideration of $10.4 million.
- Maas Construction Group, a Dubbo-based building and demolition company that's currently owned by the brothers of Maas Group's CEO and founder, for a total potential consideration of $9.4 million.
- Maas Plumbing Pty Limited, a central West NSW-based plumbing company that's also owned by a brother of Maas Group's CEO and founder, for a total potential consideration of $3.9 million.
- Inverell Aggregates & Concrete, an Inverell-based concrete company, for a total consideration of $3.9 million.
- Redimix Concrete, a Tamworth-based concrete company, for a total consideration of $5.9 million.
- A1 Earthworx, a Mudgee-based plant and equipment hire and civil construction business, for a total potential consideration of $12 million.
Each of the potential acquisition's considerations are made of varying balances of cash and scripts.
Maas Group share price snapshot
Maas Group shares are having a very pleasing inaugural year on the ASX.
The Maas Group share price has gained around 118% since it debuted on the exchange late last year.
The company has a market capitalisation of around $1.6 billion, with approximately 266 million shares outstanding.
