Alfabs Australia Limited (ASX: AAL) — Building Momentum in Mining and Engineering Services
- Noel Ong
- Jul 4
- 6 min read
Announcement
From Prospectus to Progress: 🆕 IPO Review
ASX Code: AAL
Listing Date: 28 June 2024
IPO Offer Price: $0.25
Market Capitalisation: AUD $71.7M (Fully Diluted)
Current Share Price (as at 27th June 2025): $0.37
Market Capitalisation: $106 million (Fully Diluted)
Industry Group: Capital Goods
Alfabs Australia Limited (ASX: AAL) entered the ASX in late June 2024 with the strong foundation of a family-owned business that has been operating since the 1950s. With its origins as Alfabs Engineers, the Torrance family has grown the company into a respected name in mining equipment hire and heavy engineering (Figure 1). The company remains founder-led, with the Torrance family still holding over 52% post-listing.
Figure 1: Founding Chair Paul Torrance(seated) with sons (from left) Andrew, Jason and Matthew, who is the MD & CEO of AAL)
In the months following its debut, Alfabs has delivered on key milestones, positioning itself as a diversified and resilient player servicing two critical Australian sectors — underground coal mining and infrastructure engineering.
The Kurri Kurri facility in New South Wales serves as a critical operational hub for Alfabs Australia. Strategically located near the Hunter Valley coalfields, the facility supports both the mining and engineering divisions (Figure 2). It houses key production lines, including the manufacture of Alfabs’ signature Bat Bags, and plays a pivotal role in asset refurbishment and workshop activity. This site exemplifies Alfabs' integrated approach — combining logistics, manufacturing, and on-site service delivery within Australia’s coal heartland.
Figure 2: The Kurri Kurri facility in New South Wales (source: AAL)
🔷 What Has Alfabs Done Since Listing? - Mining and Engineering Services
1. Malabar Contract Execution:
A major highlight has been the delivery and commissioning of all hire assets for the Malabar project (Figure 3). This $42 million contract, executed in 2023, is now active with full hire revenue expected across FY26.
Figure 3: Continuous Miner post overhaul & ready for delivery to Malabar, Kurri Kurri (NSW) facility. (source: AAL)
2. Mining – Other Operations Update
Customer enquiry levels for underground hire equipment remain elevated across both NSW and QLD. AAL has reported an increase in market share for its signature Bat Bag product (Figure 4)—a regulatory-driven consumable essential to underground operations. Production at its Kurri Kurri facility has ramped up to accommodate this demand, although legislative uptake has been slower than initially expected.
Figure 4: Alfabs Bat Bag (source: AAL)
In parallel, the company has strategically acquired an inventory of mining assets in need of overhaul. This move not only supports future hire fleet expansion but also allows Alfabs to maintain workflow continuity across its workshops, achieving fleet growth in a capital-efficient manner.
3. Expanded Asset Refurbishment:
The company continues to strategically acquire second-hand mining equipment for in-house refurbishment—a cost-effective and capital-light growth approach. The Kurri Diesel and new electrical workshops will further support this refurbishment activity.
4. Engineering Division Advancements:
Site-based engineering projects are gaining traction. Projects such as the Sydney Harbour Bridge cycleway and Bankstown train station upgrade are key examples of Alfabs' growing footprint (Figure 5). The newly established on-site blasting and painting division has also attracted increased market interest.
Figure 5: Sydney Harbour Bridge cycleway at fabrication stage, Kurri Kurri (NSW) facility (source: AAL)
5. Operational Expansion:
Alfabs is investing in infrastructure—including a dedicated electrical workshop—to enable greater in-house control over overhaul projects, reduce downtime, and enhance internal capability.
6. Strong Cash Flow and Banking Position:
With net debt of approximately $20 million and $10 million in available cash, Alfabs is positioned for disciplined capital deployment. The Malabar facility is now transitioning to term debt, with interest cost benefits from recent rate drops.
🔷 Use of IPO Funds – Summary (Actual vs Budget)
According to the AAL QA document, Alfabs Australia Limited (ASX: AAL) has closely adhered to its original prospectus expectations in its use of IPO funds. Of the $12 million raised, $7.3 million was allocated to mining hire fleet expansion, slightly above the $7.0 million budgeted, driven by the execution of the Malabar project.
Investment in Bat Bag consumables came in at $0.6 million versus a $0.7 million allocation, while workshop capacity upgrades (including new diesel and electrical facilities) utilised $0.7 million out of the $0.8 million planned.
IPO costs were efficiently managed at $1.4 million (vs $1.5 million budgeted), and the $2.0 million reserved for working capital was used in full. This disciplined allocation underscores the company's focused approach to capital deployment and reinforces confidence in management's operational execution.
🔷 Share Price Performance Since Listing
Since its ASX debut on 28 June 2024 at an IPO offer price of $0.25, Alfabs Australia Limited (ASX: AAL) has delivered a measured and constructive performance in the market.
The share price saw a steady build-up through the second half of 2024, peaking above $0.50 in early March 2025, coinciding with operational updates tied to the Malabar contract delivery. Although the price has since eased from that high, the stock has stabilised around $0.37 as of late June 2025, marking a solid 20% gain over the IPO price (Figure 6).
This is reflective of a market recognising tangible progress rather than speculative noise — a business delivering against its strategy with clear upside as execution continues.
Figure 6: AAL’s Share price as of 23 June 2025 (source: ASX)
Samso Concluding Comments
I am glad that I have found a mining service company like Alfabs Australia (ASX: AAL), which, even at a market capitalisation of AUD $106M is cheap. Having worked in the mineral resources and mining industry for three decades, I will say that the business that is consistently making money is a mining service company. There are droughts in between, but if you are a decent mining service company, you are most likely to be in business even in the bad times.
The commissioning of the Malabar contract, strategic internal expansions, and a consistently strong order book across both mining and engineering indicate that this is a business growing into its next chapter. With the founding family still firmly at the helm, operational credibility is matched with a long-term view.
For those seeking exposure to mining services with industrial engineering reach, AAL offers a grounded, asset-backed opportunity that’s already showing it can deliver. I am encouraging DYOR with this stock as my view is that the mining sector is going to see a lot of expansion.
The Samso Way – Seek the Research
At Samso, we’re always interested in companies that bridge strong foundations with progressive execution. Alfabs Australia is not just a newly listed entity — it is the continuation of a decades-long operation that understands its markets and operates with discipline and foresight. Stories like Alfabs remind us that investors benefit from looking beyond the prospectus to observe the operational momentum post-listing.
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