The business is expected to be worth tens of millions of dollars – and not something that investors or analysts would likely miss (from an earnings perspective) should it be offloaded. It’s all part of well-regarded chairman Mark Chellew’s desire to get Downer’s asset mix right, which means focusing on the true earnings drivers and moving on from the rest.
Minerals Technologies sits within Downer’s P&E and I&M (power and energy, industrial and marine) unit, which contributed 9 per cent of revenue in the six months to December 31.
The potential divestment comes as Downer sold its Australian Transport Projects business to Malaysia’s Gamuda last week, and as it seeks a buyer for its resource recovery investment Repurpose It via Barrenjoey’s industrial bankers.
The overarching theme is Downer’s move into soft services, and away from its heavy industrial roots. The asset sales in recent years have also included its open cut mining businesses (East and West) and its Otraco tyre management unit.
The strategy was put in place by former boss Grant Fenn, who retired this week, and will be best remembered for its daring move on Spotless in 2017. Also on the way out is well-known CFO Michael Ferguson, another key player in the Spotless transaction, who’s due to finish up in six months.
It’s a bit of a sour ending for Fenn and Ferguson, with the company now under extreme pressure from investors for recent accounting irregularities and earnings downgrades.