Perpetual Equity Investment Company

Alliance is a leading FIFO operator in Australia, servicing remote locations for blue chip mining companies. Whilst the mining services sector continues to face structural challenges, Alliance’s reputation has enabled it to retain key contracts. Management have extensive experience in the industry and are significant shareholders in the business. They are steadily executing their strategy to diversify revenue streams, pay down debt, and proactively manage the cost base. High debt levels remain our biggest concern; however we see a clear path to reduce debt to more acceptable levels through utilizing operating cash flow and potential further asset sales. In conjunction, we believe that management can reinstate a modest dividend in the near term which will equate to a very attractive yield given the current valuation. Alliance currently trades at a significant discount to its book value which we believe is unwarranted. Alliance owns a fleet of 26 Fokker aircraft and the recent sale of two planes for $15m in May last year indicates that the remaining fleet is fairly valued on Alliance’s balance sheet. (VIEW LINK)


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