Image source: © 2025 Krish Capital Pty. Ltd.

Highlights

  • Preliminary FY25 free cash flow expected at ~AUD 280 million, nearly double initial guidance.

  • Asset sales in Botswana and improved working capital drive higher-than-anticipated cash generation.

  • PRN shares rose 2.05% to AUD 1.745 on 21 July following the announcement.

Perenti Limited (ASX:PRN) has announced a significant upgrade to its FY25 free cash flow expectations, with preliminary unaudited results indicating cash flow of approximately AUD 280 million, substantially higher than its prior guidance of over AUD 150 million. The robust cash flow performance has been attributed to a combination of asset sales, improved working capital efficiency, and moderated capital expenditure.

Botswana Asset Sale Boosts Cash Flow

A key contributor to the uplift was the conclusion of Perenti subsidiary Barminco’s underground mining contract in Botswana, as previously disclosed on 22 April 2025. As at 30 June, Perenti received AUD 75 million from the sale of property, plant, and equipment (PPE) at the Botswana site. An additional AUD 17 million was realised from the sale of inventory.

In total, the proceeds from asset and inventory sales amounted to AUD 92 million, providing a one-off benefit to the company’s cash position. Even after adjusting for this, the underlying free cash flow figure of approximately AUD 190 million still exceeded the company's original full-year guidance.

Capital Expenditure Lower Than Expected

Perenti also reported lower-than-anticipated capital spending for FY25. Net capital expenditure came in at around AUD 300 million, below the previously guided AUD 330 million. The reduction was largely due to the timing of capital payments and excludes the Botswana PPE sale proceeds.

Cash flow conversion remained high, with the company achieving over 95% efficiency in turning earnings into cash.

Leverage Declines with Strong Cash Generation

The better-than-expected free cash flow has led to a reduction in Perenti’s net debt position. The company anticipates that leverage will decline to 0.5x as at 30 June 2025, based on the preliminary financials. Full audited results for FY25, along with guidance for the year ahead, are scheduled for release in late August.

Guidance for Revenue and EBIT(A) Unchanged

Despite the updated cash flow performance, Perenti has reaffirmed its FY25 guidance for revenue and EBIT(A), as previously communicated on 17 June 2025.

CEO Commentary and Market Response

Managing Director and Chief Executive Officer Mark Norwell attributed the cash flow performance to the company’s disciplined operational execution and portfolio management. “This performance has been made possible through the operational performance of our people and the effective management of our portfolio of businesses that are consistently delivering strong free cash flow,” Norwell stated.

Following the update, Perenti shares rose 2.05% to AUD 1.745 during morning trade on 21 July.