This segment cost the company $5.3m at the EBIT level in FY 2019. Pretty significant for a $50m cap company.
At first glance, this business would seem to be an important differentiator for SWK and should help retain/ attract tier 1 clients as well as start earning revenue in 2H FY 20 per the company. Appreciate any technical views on the effectiveness of their technology.
The market clearly hasn't liked the results at first glance however to me there were 3 things holding them back in the first qtr 2020;
- Pogo slow to deploy (now fixed)
- losses from Min Tech Business (possibly a great investment for the future)
- continued to say no to renewing loss making legacy contracts. Sure they lose drilling metres in the short term and have one off re deployment costs but sounds logical to me to do this.
Definitely liked that rig utilisation was 71% across the quarter but finished the quarter at 87%.
With WA drilling demand very strong, I do like SWK but note the market has a different view at the moment.
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