Fund Manager Summary
The fund managers believe that the outlook for Macmahon Holdings Ltd remains positive despite recent challenges, including a 20% decline in share price due to a weak equity market and sector-wide derating. In their opinion, the company’s positive operational performance continues to meet expectations, positioning it well for future growth. They anticipate a material improvement in free cash flow during 2H25, which is expected to drive deleveraging of the balance sheet and foster strong earnings momentum into FY26. This optimistic perspective supports their positive outlook for the next 12 months.
Source: Trading View
Commentary From The Managers
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Ryder Capital
15 Oct 2025
$0.48
Summary
- Macmahon Holdings Limited (MAH) is a diversified contractor based in Perth, focusing on mining and civil infrastructure services in Australia and Southeast Asia.
- Strong commodity profile with over 50% of mining services revenue from gold or copper/gold mines.
- Engaged in various mining operations including mine development, ground support, load and haul, and drill and blast.
- The civil segment is benefiting from strong tailwinds in infrastructure and renewable energy sectors, with a growing project pipeline.
- Current CEO Michael “Mick” Finnegan has transformed the business from a ($2m) EBIT(A) loss in FY17 to $171m EBIT(A) in FY25.
- MAH has increased its return on average capital employed (ROACE) target from 20% to 25% and raised its dividend payout ratio from 20-35% to 30-45%.
- Following significant capital investment, MAH is now focusing on a capital light earnings growth strategy, generating $140m of FCF in FY25, with expectations for continued growth.
- The business mix is shifting away from capital-intensive surface mining, with underground revenue growing from 7% in FY18 to 23% in FY25, and civil infrastructure from 3% to 20%.
- Each segment is expected to contribute approximately 1/3 of revenue over time.
- MAH trades at an EV/EBIT(A) of 6x, which is a significant discount compared to peers, despite a strong outlook for earnings growth and cash generation.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Ryder Capital
15 Oct 2025
$0.48
- Macmahon Holdings Limited (MAH) is a diversified contractor based in Perth, focusing on mining and civil infrastructure services in Australia and Southeast Asia.
- Strong commodity profile with over 50% of mining services revenue from gold or copper/gold mines.
- Engaged in various mining operations including mine development, ground support, load and haul, and drill and blast.
- The civil segment is benefiting from strong tailwinds in infrastructure and renewable energy sectors, with a growing project pipeline.
- Current CEO Michael “Mick” Finnegan has transformed the business from a ($2m) EBIT(A) loss in FY17 to $171m EBIT(A) in FY25.
- MAH has increased its return on average capital employed (ROACE) target from 20% to 25% and raised its dividend payout ratio from 20-35% to 30-45%.
- Following significant capital investment, MAH is now focusing on a capital light earnings growth strategy, generating $140m of FCF in FY25, with expectations for continued growth.
- The business mix is shifting away from capital-intensive surface mining, with underground revenue growing from 7% in FY18 to 23% in FY25, and civil infrastructure from 3% to 20%.
- Each segment is expected to contribute approximately 1/3 of revenue over time.
- MAH trades at an EV/EBIT(A) of 6x, which is a significant discount compared to peers, despite a strong outlook for earnings growth and cash generation.
Summary
Ryder Capital
30 Sept 2025
$0.40
- Macmahon Holdings constitutes an 8.2% portfolio weight for Ryder Capital.
- The company achieved a 34.2% return during the quarter, reflecting a solid FY25 result at the upper end of guidance.
- Earnings growth has led to an improved return on capital employed.
- The Decmil acquisition, completed over 12 months ago, continues to yield positive results.
- Multiple contract wins announced during the quarter are enhancing the order book for growth in FY26 and FY27.
- Ryder Capital anticipates FY26 to be another strong year for free cash flow generation.
- The company is effectively executing its capital-light strategy.
- As Macmahon secures additional underground and civil contract wins, there is potential for margin expansion.
- Ryder Capital sees a possibility for a rerating closer to its listed peers.
Summary
Pendal Group
31 Aug 2025
$0.43
- Pendal Group continues to hold its position in Macmahon Holdings due to strong performance in the mining and construction sector.
- The company met market expectations with a 20% revenue growth forecast for FY25.
- Macmahon's underlying profit exceeded consensus estimates, indicating robust financial health.
- FY26 guidance suggests revenue and earnings expectations are above market forecasts.
- The company boasts an order book valued at $5.4 billion, providing a solid foundation for future growth.
- Additionally, Macmahon has a tender pipeline estimated at $24.2 billion, highlighting significant future opportunities.
Summary
Ryder Capital
31 Mar 2025
$0.28
- Macmahon fell 20% during the quarter, impacted by a weak equity market and sector derating.
- The positive operational performance of Macmahon continues to meet Ryder Capital's expectations.
- Ryder Capital remains constructive on the outlook for the business.
- Material improvement in free cash flow is expected during 2H25.
- This will drive deleveraging of the balance sheet and strong earnings momentum into FY26.
- Positive outlook over the next 12 months is supported by these factors.
Summary
Forager Funds
30 Sept 2024
$0.33
- Macmahon (MAH) has delivered a solid earnings result this quarter.
- Contract announcements were largely in line with expectations.
- Current management has confirmed guidance achievement.
- The acquisition of Decmil will diversify the business and shift the focus to less capital-intensive work.
- Free cash flow generation remains strong and is expected to continue.
- Forager Funds reduced portfolio weighting in Macmahon to invest in Perenti (PRN), which also reported positive results.
Summary
Ryder Capital
30 Sept 2024
$0.33
- Macmahon gained +12% over the quarter after reporting at the top end of their FY24 profit guidance.
- Generated significant free cash flow, allowing for a healthy increase to their final dividend.
- Strong outlook for further improvement in free cash flow generation over FY25/26, supported by profit growth.
- Opportunities to unlock capital are anticipated moving forward.
- The acquisition of Decmil is expected to create opportunities for incremental earnings growth.
- Diversification of the business into growth sectors such as renewable energy and infrastructure.
- Ryder Capital continues to hold because of these positive indicators for Macmahon Holdings Ltd.
Summary
Ryder Capital
30 June 2024
$0.27
- Macmahon Holdings Ltd (MAH) performed strongly, appreciating +87%, more than compensating for previous underperformance.
- MAH delivered strong earnings and free cash flow growth.
- The strategic acquisition of ASX listed civil construction business Decmil Ltd will assist and complement MAH’s capital light business model.
- Despite its near doubling in share price in FY24, MAH still trades materially below intrinsic value.
- Ryder Capital continues to hold and added to Macmahon Holdings Ltd (13.46%) when the stock traded below its net tangible asset value backing.
Summary
Forager Funds
30 June 2024
$0.27
- Forager Funds continues to monitor Macmahon Holdings Ltd (MAH) following its recent takeover offer for Decmil (DCG).
- The takeover was well received by investors, contributing to a 58% increase in Macmahon's share price prior to the announcement.
- Decmil is viewed as cheap and provides potential franking and tax losses that may be beneficial for Macmahon.
- However, Forager Funds expresses concern as Decmil has not made a profit for several years.
- The engineering and construction sector, which Decmil operates in, is considered tougher than the mining services sector.
- Macmahon has recently resolved its operational issues and doesn't need additional challenges at this time.
- Returning cash to shareholders would have been a preferred strategy.
- Macmahon contributed 2.1% to fund returns for the year, prompting a reduction in exposure to Macmahon.
- Additional investments have been made in Perenti (PRN), which has not experienced the same level of share price appreciation.
Summary
Paradice Investment Management
30 June 2024
$0.27
- Paradice Investment Management continues to hold an overweight position in Macmahon Holdings (MAH).
- The share price has shown positive rerating, indicating a potential for strong free cash flow outcomes at the FY result.
- MAH was originally purchased at a ~50% discount to Net Tangible Assets (NTA), highlighting deep valuation support.
- Although some of the discount has closed, the stock remains attractive on an earnings/cash flow basis.
- MAH announced its intention to acquire Decmil (DCG) in mid-April, with a shareholder vote scheduled for July 31.
- The acquisition aligns with MAH's stated strategy and is expected to provide significant EPS accretion, scale, and diversification.
- Paradice sees continued value in the mining services sector overall.
- A partial sell-down of the overweight MAH position occurred late in the quarter due to strong share price performance, reallocating into cheaper peers.
Summary
Ryder Capital
31 Mar 2024
$0.23
- Macmahon Holdings experienced a significant increase of 22% over the quarter.
- The company reported strong first half results and raised its interim dividend to $0.0045 per share, marking an increase of 50%.
- Ryder Capital expects earnings growth to continue into the second half of the year, supported by robust free cash flow generation following a period of heavy capital investment.
- Management has increased the targeted return on capital to 20% from 15%, which enhances confidence in the business's strength.
- A strong rally in the share price has been observed as a result of these positive results.
- Despite this rally, MAH is still trading well below Ryder Capital's valuation targets, indicating further upside potential.
Summary
Ryder Capital
30 Sept 2023
$0.17
- Macmahon Holdings is our second largest position.
- Currently trades at a steep discount to its intrinsic value.
- Net Tangible Assets (NTA) per share stands at $0.278.
- Recent full-year results were positive and exceeded market expectations.
- The second half of FY23 demonstrated strong margin performance.
- Cash flow generation in FY23 supports our optimistic outlook for FY24.
- Expectations for FY24 include materially higher free cash flow generation.
- Anticipation of a higher return on capital.
- Projected increase in dividends, contributing to valuation enhancement.
- Overall positive sentiment for market valuation and share price performance.
Summary
Ryder Capital
30 June 2023
$0.16
- Price volatility was utilized to increase exposure in Macmahon Holdings Ltd (MAH)
- Ryder Capital remains confident in MAH’s ability to improve margins
- Expectations for earnings growth are high
- Anticipation of strong free cash flow generation in FY24
- Market re-rating of the stock is expected following financial improvements
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"While the market may be throwing shade, Macmahon Holdings Ltd seems poised for a rebound. With operational performance on point and free cash flow expected to surge, the next 12 months could unveil strong earnings momentum that investors shouldn't overlook."
Last Updated: 15 Oct 2025
Query The Data
Frequently Asked Questions
Who is investing in Macmahon Holdings Ltd (ASX:MAH)?
Fund managers including Ryder Capital, Forager Funds, Paradice Investment Management and Pendal Group have invested in Macmahon Holdings Ltd (ASX:MAH).
Why do fund managers invest in Macmahon Holdings Ltd?
Fund managers are investing in Macmahon Holdings Ltd due to its strong operational performance, which continues to meet expectations despite recent market challenges. They anticipate a significant improvement in free cash flow in the second half of 2025, which is expected to enhance the company's balance sheet and drive earnings momentum into FY26, supporting a positive outlook for the coming year.
What happened to Macmahon Holdings Ltd (ASX:MAH)?
Fund managers are investing in Macmahon Holdings Ltd due to its strong revenue growth, exceeding market expectations, and a robust order book of $5.4 billion, with a further tender pipeline of $24.2 billion. The company has successfully transformed its business model, shifting towards higher-margin underground and civil infrastructure services, which now represent a growing portion of its revenue. With a solid earnings outlook, increased return on capital targets, and a rising dividend payout ratio, Macmahon is positioned for strong free cash flow generation and potential margin expansion, making it an attractive investment in the mining and construction sector.