Ladies and gentlemen, thank you for standing by. Welcome to Ekofu Year 20 21 Results Conference Call. At this time, all participants are in a listen only mode. There will be a presentation followed by a question and answer session. Please be advised that this call is being recorded today, Wednesday, 25th August, 20 21.
I will now hand over to your speaker today, Mr. Stephen Waller, Chief Executive Officer. Please go ahead, sir. Thank you.
Thank you very much, and thank you folks for joining us this morning. I'm very pleased to be presenting and announcing the full year results for ACRO Formica Construction Services for the 2021 financial year. It's another year of growth for the business. It's actually the 8th consecutive year going back to when it was pre being a public company of growth in our EBITDA for over 8 consecutive years now. We've had growth every year, which to my mind sort of the 5 issues.
So for the cyclical nature of the business, this business is proving itself to be able to continue to grow irrespective of many cycles through the wider construction industry. We're incredibly pleased with these results. It's a testament to the staff of ACRO and their ongoing commitment to our customers and the services they provide. The highlights, the key financial highlights, I'm going to walk through the investor presentation that we've provided. I won't go into sort of every single dot point, but pick out the areas that I think are most relevant to the results for the year.
So in terms of the financial results, all the metrics are in the right direction. So revenue was up 22%, dollars 105,700,000 for the full year EBITDA, dollars 34,300,000 up 25 percent pretax profit, up 35 percent, dollars 10,200,000 Margin continues to be solid in EBITDA, so 60 basis points to 23%. I'm very pleased that we are announcing a full year dividend of €0.019 fully franked. So we paid €0.75 in the half year and €0.015 further now. We will have a 5% DRP in place.
And as I said, it's fully franked dividend. In relation to both NPAT and underlying EPS, while we did have 10% growth in NPAT and a flat EPS, I'll let Andrew Kraffer, our CFO, who will walk through the financials a little later, talk about the factors involved really in those numbers being relatively flat versus our other metrics and how we know that those both those numbers will change significantly to the new financial year. In terms of the achievements within the business across the year, the first one really around our higher revenue contract. It is the core key lead indicator of future performance in the business. We are primarily still a project based business, so we need to keep winning work.
Over the course of this year, we picked up $39,300,000 worth of new higher revenue contracts, which is up 34% on the previous year. I'll go into more detail about that later. But we've had, in the course of the last year, our 4 best months in the history of the business over the 8 years I've been involved in the business. We've had 4 best months in terms of new contracts won over this period. 3 of those have been in the last 6 months.
This is a very good sort of 3 to 6 month lead indicator. But all of the other key achievements actually I just want to point out quite strongly that over the last 3 years since we've become a public company, there's been 4 key initiatives that have effectively changed the ACRO business that was listed in April 2018 to what it is today. The first of those initiatives is around pivoting our business away from residential markets and concentrating on civil infrastructure formwork markets, primarily on the East Coast and primarily expanding what was already a strong Queensland business into Victoria and New South Wales. The what's happened in the last 3 years, and there's a bit more detail later on, in relation to Melbourne formwork is an absolute, I guess, verification of that strategy. We have successfully been able to penetrate that market to become a very low market share company to almost probably the market leader in the non Formwork civil infrastructure market.
So number 1, Formwork Pivot is successful. Number 2 was the acquisition of Natform. We bought that business in August of 'eighteen. And we were absolutely committed to how that business could expand nationally out of its primarily New South Wales base and also what it would do for the business and enable us to offer packages of various services on jobs that the screens would have sort of gives an introduction to. It's fair to say that business had a relatively slow start for the 1st probably 12 to 18 months, but it's gone on a cracking pace over the last year.
Revenue is up 31% in prior corresponding period through expansion in Queensland and Victoria and also consolidation in New South Wales. And it's now a very important part of what we do and is achieving results far superior to at any time in its previous ownership structure. So second key point, Matform acquisition successful. The third point was the third key initiative is really the Unistain acquisition that we made in November of 2019. This business has transformed macro in terms of our relationship with a European manufacturer or form of equipment, UMA, and how we've been able to introduce that equipment nationally.
And also, it introduced us strongly into the industrial services market that we previously didn't really participate in is now a very important part of what we do going forward. And it's also, I guess, given through the ORMA relationship, given us an opportunity to participate in the sale of Formwork Systems into the market rather than just the hire, which I'll talk again a little bit later how important that is. So the 4th one is around the industrial services scaffolding business that was Queensland based at the back of Unistan. We said that 12 months ago with a mission to expand that business nationally. And that's now been incredibly successful, basically doubled the revenue in the last 12 months and will be going up another 50% in the next 12 months.
So 4 key initiatives pivoting for Murph and going across the East Coast, the MacPharm acquisition, Unispan acquisition and the industrial services growth nationally, all have been achieved successfully. And it's now enabled us to have a wide footprint of services and products that we offer across all of the agro geographies, which is every state in Australia. And that's one of the key advantages for our business now is that we can we've got a range of products and operate in a range of geographies that none of our competitors can provide. In terms of the markets that we operate in, it's fair to say that the civil markets across the country continue to be incredibly strong. And on the page where you sort of give the traffic light green and the red picture, but you actually have a double green.
They have a double green on Queensland. So at the moment, that market is about to take off in a very strong fashion, which is great news for us given their predominant market share position in Queensland. The only really soft market that we see in the country at the moment is residential New South Wales, and we don't really participate in that market to any degree any further. So across all of the markets we're participating, we're in either good or very, very good positions going forward into the new financial year. We roll this out on a regular basis, but it's really the next page that's probably the most relevant point here.
However, I will point out some things on this page. Over the last 3 years, the growth in civil infrastructure spend in the country has only actually been a growth of 16% despite forecasted it being far superior to that. Over the next 2 years, it's forecasted to go up by 74%. I don't believe it for a minute. Those projections will not be accurate.
These projects will go longer and flatter. However, there's no doubt there will be an increase in activity over the next period of time. A longer flatter cycle here is just very good news for us. But on this major infrastructure projects page, the main thing that I want to point to are projects near the top of this chart. In Crimson, Crimson with Bruce Highway and Cross River Rail in the black at the top of the long rail, they're all Queensland based projects, and they are happening right now.
And especially for the Bruce Highway, that's becoming will become probably the biggest infrastructure project, the biggest generator of revenue that ACRA will have over the next couple of years. But on the next page for me is really the story around what's happening in this space. To take you to the middle graph, you can see that, that infrastructure has been depicted graphically. So you can see it's only gone up from $12,000,000 to $13,900,000 sorry, over the last 3 years, 16%. Forecast to go up 74% for the next couple of years.
Again, that will be the case, but it certainly will be greater than $16,000,000 But the story is the macro has grown in excess of this of that same growth pattern. So bottom right hand graph, the national reformer revenue for civil infrastructure in ACRA has actually gone up 73% over that same period from 2018 to 2021. And you can see in the top right graph, Victoria has been so you can see we've gone from basically nothing, dollars 2,000,000 of revenue in 2018 to $13,800,000 of revenue in 2021 with next to no market share, probably 35% market share. New South Wales, it's always been sort of a troubling state for us in terms of not getting enough representation from the size of the market. Whilst that's still the case, you can see that from between 2019 2021, we've almost doubled our civil infrastructure forward revenue in New South Wales.
So we're now starting to get real penetration across some of the most significant projects in Australia, but I'll talk about a little bit later on. But I think the real story for us this year and for the next couple of years is going to be Queensland. So again, in the top left hand chart, you can see in 2019, our former revenue and civil infrastructure dropped to $11,700,000 We've just come off a year where it's $19,600,000 And on a half to half basis, the second half of '21 was over $11,000,000 So it's going cracking the end of the pace now, and I expect that to have significant uplifts over the next couple of years. In terms of our success this year in getting new contracts, top graphs shows that 33% that we talked about earlier. So up from 16.3% in second half of 'twenty to 21.6% in second half 'twenty one and up on a full year basis, €29,200,000 in 'twenty or €39,300,000 in 'twenty one.
As I said again, it's a very, very strong lead indicator. One of the most pleasing aspects of this growth is Natform nationally was up 61% year on year in secured contracts. So it's a great and the Queensland business in Natform was up 150%. So we went from nearly nothing. We were doing about $50,000 a month of higher revenue in Queensland screens about 4 months ago.
We're now doing $250,000 a month of higher revenue streams in Queensland. In terms of the pipeline, so whilst the pipeline here shows a decline, I should point out strongly that in the June 2020 number, we had a $15,000,000 tender that we had put in for a cross river rail package that we were unsuccessful on. But that obviously skewed significantly how much work was in the pipeline at that point. And so if you take that out and look, there's nothing anywhere near that size currently that sort of stands out as one huge package like that. So whilst it looks like it's gone from $76,300,000 to $73,500,000 I would point out there was one $10,000,000 worth $15,000,000 that we didn't win over that period.
But overall, again, as a leading indicator for future success, a 3 to 6 month lead indicator is the most important thing that I look at on a month to month basis in terms of making sure that we're continuing our share. And we certainly are. We've averaged in the second half of 'twenty one, we averaged $3,600,000 worth of new work done per month. I know that half of the business is about $2,800,000 At $2,800,000 we'll hold our own. At $3,600,000 a month, we're going to be going further ahead.
The next point is around the pivot from residential focus into other focus of civil infrastructure and now our burgeoning industrial services business. So this pivot is complete. Discussing residential in macro is basically an irrelevant point now. It's 16% of the total revenue and sales contribution of ACRO. It used to be 60% 3 or 4 years ago.
Formwork and Industrial Services now make up 84% of our contribution and that will just continue to go up over the 12 months as certainly Industrial Services grows by another $10,000,000 in revenue from $20,000,000 to $30,000,000 minimum over the course of next year. So our capital investment focus is in the areas of 4 Milk and Industrial Services. The second graph on this page shows how much further contribution we now get out of product sales as well as HELLA. Accro had a smallish product sales business prior to the acquisition of Unistan. You see we're doing sort of $16,000,000 a year and now doing $36,000,000 a year.
The important point to make is that the Unistan business in the year before we bought, it did about $10,000,000 in this space. So we've grown that £10,000,000 on top of the acro 16 to £36,000,000 in the last year off the back of obviously, we're a national the national accro slot, the ability to sell product across all of the markets in Australia rather than focusing on the Queensland market as a human spend. Important thing here is that this does not take away from our higher revenue. It accentuates our higher revenue. So there are ranges, especially 4 workers across the country that like to buy equipment as well as hire.
You tie them into your product. They buy your product as their form of system. They top that up with hire and then they top it up further with further investment in sales when their economics make sense to them. So these two things are working very well hand in hand. I next want to just point out a few of the projects that we worked on just to show that the sort of things that we do in macro that are not a more straightforward medium potatoes work that you would expect a company of ours, Magic, to do.
First project here is the Melbourne Metro Rail State Library Station that we've been incredibly successful on the whole Melbourne Metro Rail project. This particular project highlights the highly technical nature of the work we do and the engineering smarts that our people are involved in. Now this system is effectively a gantry. It travels 2 50 meters in length along the cabin that's being formed over the course of this project. So it's on rails as you see, and it moves along with the requirements of the construction timetable.
We're using all the MK system here that has so much versatility and use across a range of different products. So data range of different applications, sorry. And the customer here, which is the CYP, cross room partnership with the Metro Rail, have now engaged to supply an additional 2 gantries on other parts of the construction due to the success of this project. Now this is not as you can see, this is highly technical equipment. It's basically our engineering team being able to put together the various components of the AGRO system to be able to come up with a solution specific to what the customer needs on a project of this nature.
2nd one I want to focus on looks a bit more bland in nature, but it's actually a very, very great use of a brand new aircraft product. So we our engineering national engineering manager, Matt Caparilla, and the business in general noticed that we had a, I guess, a gap in our product offering to the market and it was in a real heavy duty cropping sort of market. So we developed this Powersure 150 product over the last 6 to 12 months. It's now the heaviest duty crop in the market. The photo over there is the 1st application of it nationally from a brand new product that was only commissioned 6 months ago.
Now this is propping up an underground car park that is having a multistory tower built on top of the car park. So whilst that's going on, they require very heavy duty cropping arrangement to keep the car park in place while the construction is going on top of it. We should note that this particular application, which is on a job in Duncan Street in the Fortitude Valley in Brisbane, we're getting basically 90% return on the investment of the product on this job on the first job. So it's something that we designed in house. We commissioned in house.
We've got it manufactured overseas. It comes in at a cost. And on this first application, 1st job, we're getting 90% return on investment. So look, a great effort by our engineering team to come up to understand the gap that we had in our product offering. And this product will now be rolled out nationally for aircraft.
In terms of the major projects we're involved in, you can see they are all the top notch projects in the civil infrastructure across the country, excuse me, Sydney, Melbourne and Brisbane rail projects. The Melbourne Western distributor continues to be a very strong project for us. But I want to highlight the last 2, Bruce Highway and Snowy Hydro. Bruce Highway, as I said, I think will be our biggest project in the next couple of years. We've already secured revenues on that project in upwards of $3,000,000 I'll talk a bit about that in a second when we look at some of the major contract wins.
And Snowy Hydro is only really just starting to get cranking. And we've only in the last couple of months going into this current financial year in terms of product work won and also from both hire and labor provided on the job and products we've sold under the job, something was somewhere around $2,500,000 worth of work we've done just in the last sort of few weeks on that project. And it's a speck of sand on Bondi Beach in terms of what that project will generate over its course. The main points that I want to focus on in terms of the overall segmental breakdown and profitability of the business, as you can see, £87,000,000 up to £105,000,000 in revenue. Total sales contribution, £52,000,000 to £61,000,000 contribution margin remaining constant, irrespective of the fact that a lot more of our revenue now comes out of sale of product.
Our yard costs, we've able to maintain them at a good level despite having an extra period of time with the Unistan business. Whilst the labor internal labor has gone up, we're investing a lot of money and effort into growing engineering capability. I don't apologize for that one Iota because it's clear to me that's the major competitive advantage that Accra has. So investing in high quality engineering, the NAGR engineering intended more than 30 people and we continue to invest in this area is making a considerable difference to ACRO against our competitors across a broad range of the markets that we operate in. So one thing that I will point out on the underlying EBITDA of $24,300,000 that number has basically doubled since we listed 3 years ago.
So the business is producing excellent results in that area. Across the segments, the main things to focus on in that formwork area is a 19% increase in revenue, a 20% increase in contribution margin. So you can see that our margins are maintaining while we are growing. So rates are not being reduced to doing work. Tremendous results in Melbourne Civil, tremendous results in NAT Form, 84% growth in Melbourne revenue year on year.
Product sales are now contributing 49%. We this is our core business now and a very profitable core business. In terms of our Industrial Services division, so this really is actually the story of the year for us and going to the new financial year. We set it on a mission to penetrate the New South Wales Industrial Services market. The market in general has very similar dynamics to formwork.
And you can see the returns are very similar in terms of it being highly engineered work, not straightforward perimeter scaffold, as you would know, in a high story high rise construction. This is very heavily engineered, safety focused, reputation, customer experience. It's all of that. It's all of the things that make the form of market so attractive to us also makes this market attractive. So we've grown that business continuing to turn over to $22,000,000 just over 'twenty two in turnover.
You can see we've basically maintained our margins from around the 47% mark. But the real story is how we've expanded that market expanded our business out of Queensland now into primarily New South Wales. We've also won contracts in South Australia and Tasmania. It's a New South Wales story. In the last few months, we've won contracts with Mount Quipa Power Station, the Rari Power Station, Bayswater Power Station, the Busy Tumor kraft paper mill and also the Snowy Hydro project.
So we're targeting another 50% growth in revenue and contribution this year from this business. We expect to be over $31,000,000 in revenue and the sales contribution is more than $15,000,000 in the new year. To give you an example of the sort of work that this business has done, it's not easy to take photos of the sort of things we're showing here because it doesn't go down very well inside a furnace. But you can see in this is the Mount Politzer power station job that we've won that we are on now and we'll go for probably around about a couple of month period now and start again in the new financial year sorry, in the new calendar year. There's been there have been some delays, some reductions in the current scope of the project due to COVID that will then kick back in, in the second half of the year.
But overall, you can see practically what we're showing here, this is our this is scaffolding equipment sitting inside a furnace schematic that you see here. But you can see it's far from straightforward. Specialized equipment needing to be designed in such a way that sits in the throat of the furnace and allows the work that needs to be done for the maintenance of the furnace to carry on. And we've invested fairly significantly in this sort of equipment over the last 12 months. It gives us the ability to have a complete turnkey approach to this kind of work where we can provide the furnace work.
We can provide the other access requirements around the other parts of the plants that require us to be maintained. And again, this is a lightweight scaffold that is easy to move. And again, as you can see, it's not straightforward, highly engineered and is making a considerable difference to the offering we have in that market. We still do we do participate in commercial scaffold, and we will continue to participate even though it continues to be a problematic business. You see in the numbers, you can see the higher revenue considerably dropped by $3,000,000 year on year, whilst the labor and the cartage numbers went up by 1.4 in revenue.
That's indicative of volume. So volume is strong. Rate continues to be very challenged, especially in the New South Wales market. So I mean, look, we're not focusing on this business. We'll continue to operate in it because it will turn.
This is a cyclical business. It's part of our offering. And as I said, we'll stay in it. We do very well. And in some markets like Victoria, South Australia and actually, Tasmania, New South Wales does remain challenging.
And as you've said, now a small contributor to the overall agro business, challenged by rate and that's not again, something we will stay in because there will be opportunities to grow margins in this business over time. I'll run through the major contract wins quite quickly. You can see just just wanted to highlight some of the different types of things we're doing. So Northern Metro Rail, 75% of the package is being let you're winning. We started from scratch there.
We've just developed a great relationship with not just the head contractors but also the subbies that we're using on this overall project. It's a combination of hire and sale of equipment and $2,500,000 plus revenue, and we continue to generate 100 of 1,000 of dollars a month for us at the moment, and there's another around a month or 2 years to run. The Caboolture Hospital redevelopments, etcetera, it's basically that's one very large package of work with 1 with 1 commercial form worker in Queensland that is indicative of the Queensland commercial market for form work picking up. Melbourne Western Distributor, again, sort of in the case of stickiness of the customers that you start to work with here, we're again winning most of the packages being late. That project was supposed to go for 3 years.
It's probably going to go for 5 or 6, but we're still generating at the moment a couple of $100,000 a month of revenue. The next 2 I wanted to highlight because they're indicative of the package selling for ACRO. So both the white residents and the capital court towers are both jobs that we are providing a range of products on, including screens. So the Queensland growth in our screens business has been a lot to do with being able to offer packages to builders around the formwork requirements, the perimeter scaffolding requirements and the screened requirements. And both of those jobs are indicative of that.
The next project is the Crowsnest Metro Station to the Sydney Metro project, just an indication of penetration to the New South Wales market on an $800,000 package, everyone on that job. And the last one here, I mean, it's actually the job that we looked at earlier with our Powershore $150,000 plus in revenue on that job, not just the Powershell 150, but again, a range of other products that enable us a lot of that package. We wouldn't have been able to do this without the introduction of the Powershell 150. And the Colang River Rail Bridge is civil infrastructure project in Kwanavan. And then the next one is actually a big one really for us.
So the Bruce Highway, Kouradakara part of this project, there's something like 40 bridges that have now been awarded to different subcontractors to construct on this project. We will be on all 40. So at the moment, the packages that we have been let, we're at 100% strike rate on what's going to be a very, very large project. The next group, Vizzy, Mount Piper, Snowy, Eraring, all in that industrial services space, all contracts we've secured in the last few months will add considerably to our FY 'twenty two results. And the last 2 are screens contracts, 1 in Queensland and 1 in Victoria, large contracts.
Again, just wanted to indicate the growth of our business in the screens business and that full business outside of its traditional New South Wales home owing contracts of this nature in Queen Victoria. Next, I just wanted to, I guess, talk a little bit about the ACRO team and the culture within our business and how that's developed over the last few years. We've got an absolute focus now on succession planning. It's something that I spend a lot of my, I guess, peaking time around making sure we've got the right focus and the right plans in place here, developing the depth of talent across the business that will it's so important for a company with our growth aspirations that we continue to inject new blood and make sure that our people have been developed, that they have got the right career development opportunities, especially in the engineering space that they said is so important to ACRO's overall competitive advantage. We've had some recent appointments that so we're tracking some of the best talent, a new Victorian GM, Brad Craven.
Brad comes down to the Lard, a long experience of managing the size of the business and servicing the construction sector in Victoria. And Peter Belden, who came on board in the last few months, has been absolutely crucial in our industrial services. Peter was a 40 year veteran of 1 of the major industrial services providers in Australia and made the choice to come and join the ACRO team and has been absolutely instrumental in assisting us with that growth. And just in terms of our culture, just we've got a much broader culture document than this, but I just want to pick some points out of it that these are the things that we absolutely believe in. Safety first.
We're a safety first employer. We are a customer focused company, so they're at the heart of everything we do. It's about providing solutions to customers. It's not about meat and potatoes work necessarily. There's an element of that.
It's coming up with the best potential solution for a customer for their specific needs of their project. We want to set industry standards. We aspire to actually exceed whatever standards are currently in the both expected formwork and industrial services markets. Internally, we have a culture that's very entrepreneurial and it's very direct, but it's always open, honest and constructive. And we do have a one team approach.
Whilst Pacro operates across a series of branches with a branch network, the way I describe it is that we have a common approach, a common strategy in the business with very strong local ownership. That's the way I believe businesses run best when there is a common focus, but there is really that high degree of local ownership. That's all for me for the moment. I'll hand on to Andrew Krauther to walk through the financials.
Great. Thanks very much, Steve, and welcome all. As Steve's already shown, our sales for the year went from $87,000,000 to $60,000,000 When you add on to that very tight cost controls in the year combined with contribution margins being maintained, we had a healthy increase in EBITDA from $19,500,000 up to $24,300,000 or a 25% increase. Now moving from EBITDA down to our pretax profit, depreciation moved from 9 point $4,000,000 up to $11,200,000 Now that's a $1,800,000 increase, but the majority of that is caused by our friend IFRS 16. So $1,500,000 of that $1,800,000 increase because of the lease amortization.
So that's because you'll probably remember we did a lot of we renegotiated almost all of our leases last year, and this is basically the impact the full year impact of that. Now getting down to net interest. Our net interest moved from $2,500,000 up to almost $3,000,000 or $500,000 increase. Likewise, the majority of that is actually the IFRS 16 moving in the leisure negotiations. So here we have a moving down the pretax profit.
We had a $7,600,000 last year up to a $10,200,000 pretax profit or a 35% increase. Now the most significant move you'll see in the P and L, which I'm sure stands out a lot is our tax expense. Last year, we had a $300,000 tax credit, this year a $1,500,000 tax expense. Now just starting with the tax credit we had last year, if you go into this now last year, this credit was a little it wasn't an anomaly, but it was because of the essentially the Unispran acquisition we had that allowed us to basically take up an acquisition sort of tax credit. So the credit we had was not what you say a sustainable ongoing sort of tax expense.
I think we in the past would always mention that our ongoing tax expense could be between 11% 12%. Now before I get into this year's tax expense sort of a year rate, ACRO is the form that you took on that form of uni spend, we were essentially a non tax paying entity. So we had a lot of tax carry forward losses. And even at this stage, we have $45,000,000 or approximately $45,000,000 of ongoing profit that will be tax free. But this only exists in the ACRO or the legacy business.
The new entities being in that form and Unisend are both tax based. So what we've had this year is it still has the non the agro business having no tax payable, but Natform and Unispe in particular the industrial services business has actually been more successful in the second half of the year than we potentially forecast.
So what we have here is
we have an underlying pre tax profit sorry, an underlying effective tax rate of 14.8%. Now on that's not a bad thing, the smooth would be the great businesses in that form in the year spend doing better than we thought. So ongoing, that's probably going to be a similar sort of tax rate. We're obviously always looking at this to maintain or to more efficiently use our structure. Going down, that's probably what it's going to be.
So that brings us down to an NPAT underlying of $7,900,000 to a to this year an $8,700,000
underlying NPAT.
And then down to earnings per share, the underlying earnings per share, which we mentioned before, was relatively flat. So $0.04 to $0.04 Now I think excuse me, it's important to note, as I said, last year's this is all about tax. If you think about it, if we had a similar tax rate last year, say, 14% from the 2020, we would have had an EPS last year underlying EPS last year with roughly 3.3%. So we would have had a 20% increase in EPS. So this is a tax issue.
Going, we won't have that issue because this tax really will be will stay similar to what it is now. Moving below the underlying impact, we had significant items associated this year of $2,500,000 Now this is still mainly a hangover of the Unispan acquisition. Included within this was some integration IT and other sort of integration expenses. We had the final earn out calculation of $150,000 in this number.
We also have another a number of strategic things done. This sort
of stuff has been continuing on. However, it's basically coming through a since finish now. We also had a number of maintenance and life extensions that we had to adjust that we had to actually take up for some of the year that we've taken on. But had we known, we would have taken that up at the first when we first acquired the business. One of the big expenses within the significant items on our go is an additional tax expense of $670,000 Now the reason we haven't put that in underlying is tax expense relates purely to the pre acquisition period of Unispan being before November 2019.
Now what we did when we've gone through our 2020 taxes and 2021 taxes, we've had the ability to restructure some of the pre essentially asset holdings of Unispan and essentially make the most of their pre acquisition tax laws. And so without going into further details of it, if we've known this at the time when we acquired it, what we would have done is actually reduce increase the goodwill of Unispan essentially and reduce the cost base at that time. But because we're beyond 12 months, we had to take up that $670,000 in the tax expense. So from an NPAT reported, dollars 3,000,000 last year to essentially $4,000,000 this year. Also as Steve has already mentioned, announced a final dividend of CHF0.015 which takes us when you combine it with the CHF0.75 interim, that takes us to a CHF1.9 billion.
And we'll go into that a bit more in a moment. Now moving on to the balance sheet. From a balance sheet point of view, this is obviously pre the capital raising we have just recently done in July. And our net debt is up by $7,900,000 Now cash included in that cash is down by $5,500,000 debt up by $2,400,000 Now the big change in that, we had to pay the net form of Unisand on deferred acquisitions back in October. We have elevated capital expenditure or elevated the previous years in this year and obviously dividend payments.
Now from a working capital perspective, you can see our receivables are up quite considerably by $7,600,000 Now there's two reasons for that. Firstly, as Steve has already gone to, our sales were up by 22%. That takes quite a deal of it. And also because of the way that we're our sales are increasing, we've got some very large sales and we've got certain negotiated terms in those sales. So that sort of takes up the other increases there.
Also our inventory you'll see is similar to what we were at the half year. So we've made decisions to increase our inventory holdings to take into account the increased sales. But also there is some slower, also, as we all know, problems with international transport. So to a certain extent, we do have to hold more inventory. Down to the creditors, the other big increase there, that's similar increase to our debtors and because of our sales going up, we've got more turnover of stock and so forth.
We also had a lot of CapEx, which we're going through at the moment, towards the last quarter of the year. So a great deal of that credited accrual relates to that. From a gearing point of view, the net debt gearing is 26.7%. Now obviously, we've just made a capital raise of $10,500,000 or $10,000,000 after cost in July, and that net debt gearing came down considerably. Obviously, where that heads this year depends on our capital expenditure, but we do see that coming down during the year, It will come down considerably in the 2023 year.
Moving over to the next page into the cash flow. So I'll take you through what this page gives us is the operating cash profit, which will and also our net debt bridge. So operating cash profit is the way we've always defined this is our underlying EBITDA less maintenance CapEx and tax. So what you can see here, we've had to take into account that we've moved from pre to post double A3, 2016 that is. So for F21, you can see we had underlying EBITDA of 24.349 dollars What we're doing is we will take off the actual lease payments of $5,900,000 getting us down to a pretax EBITDA of $800,475,000 Now I just want to highlight that you can see the lease payments going from last year to $4,400,000 to $5,800,000 this year.
We haven't got a whole lot of other leases. If you remember, we renegotiated our leases last year and included in that lease cash free period. So it's actually it's the same number just with more actual cash payments rather than invoices. So this year, we also had the next line is down. We had IT and other office expenditure of $1,700,000 The majority of that was an IT one off refresh.
That won't be happening again, happening again. We just hadn't spent money on IT for quite a bit of time. Our market CapEx, dollars 4,400,000 up from last year's $3,600,000 This is however below our dollars of PP and E depreciation. And we've had cash tax of $556,000 that actually related to the 2019 tax. Just to give an update this year's tax, which is what you would expect next year, it's we don't believe we'll have any tax payable for the 21 year due to accelerated depreciation.
However, ongoing tax will start being actually paid. So that brings us down to cash profit of $11,833 However, when you take off the 1 off IT refresh, we have a $13,200,000 operating cash profit. Now our policy is to pay between 30% 50% of operating cash profit in dividends. When we take into account the operating cash profit of $13,200,000 our dividend payment for the year will be approximately 34%. So that's sitting in between the 30% 50%.
And given the fact that we are a high growth company at the moment, that is a pretty healthy dividend that you're paying out. Now moving down to the net debt bridge. You can see we start the year at £14,600,000 dollars net debt and ended at about $22,500,000 at the end of the year. The only other thing worth really highlighting here is our cash flow from operations of $23,800,000 Really, most of that cash in the current year is used from a growth perspective. Our significant items from a cash perspective is $950,000 We've got CapEx of $17,000,000 and we have deferred consideration of $3,600,000 So putting all those together, that's about $22,000,000 that's $23,800,000 And as you can imagine, when you if you reduce your CapEx and you don't have those deferred considerations, which we won't have after this year, the cash will really start pouring in and we'll see that gearing level come down.
Now moving on to capital expenditure. This is a similar pace that we have in the year. You can see that moving from the 2018, you really we had underinvestment in CapEx. And then 2019, the NetForm investment 2020, the unit spend investment. And also within 2020 2021, we'll have the big pivots towards formwork and now Industrial Services, plus all the organic growth we're having.
So in the current year, dollars 16,200,000 growth of $10,000,000 We had the one off expenditure of $1,700,000 and we had maintenance CapEx of $4,400,000 Now from an ongoing perspective, I think you're probably fine with the CapEx profile will be fairly similar just because of the growth profile we have in front of us. Now to the right page, you'll also see that the summary of the CapEx of the growth CapEx that we had during this year. And I think it confirms that we still operate at the 40% return 40% IOL requirement on the growth CapEx. And all these ones have been improving so far to be more than, in fact, that 40% return on the growth. In fact, if you actually have a look at that growth CapEx, about $4,000,000 roughly is related to the Industrial Services in that form, part of what I was going on before with the growth involved in those.
With that, I'll hand back to Stu.
Thanks, Andrew. Well, I'll just wrap up for us talking. Just want to reiterate, our strategy is consistent. It's core. It's lived.
It's what the business is about. We restate this in all our presentations, and it's consistent It's about being maintaining our position as a leading formwork, slars and higher equipment provider, becoming a leading engineered scaffold solutions product in the industrial service market. It's about people. It's about ROI, organic growth, spreading the range of products that we have across the geographies we operate in and continuing to look at acquisitions. We don't really have anything again on our plate at the moment, but something fitted our strategy and also fitted our return requirement.
We are an acquisitive company. In terms of the short- to medium term growth opportunities,
you can see again
they're consistent. Industrial Services cracking that market across the East Coast of Australia. And I would say I've got a very strong eye now on Western Australia. We noticed some opportunities that will probably open up there for us in the next period of time. Formwork growth in Sydney and probably the biggest one in terms of growth this time next year when we're talking about our results for the FY 'twenty two, I'm sure we'll be talking about former Queensland.
50% -plus market share in a market that is really growing in infrastructure and also commercially, huge opportunity for us in this space. And certainly kicking into the second half of this financial year, I'm expecting to see numbers going up significantly to where they are today. Continuing to grow the network market share in New South Wales and Victoria and Queensland, continuing to spread the product range across the country and continuing to focus on product sales. Just in the last few weeks, some very significant product sales have presented themselves to us, and we're taking advantage of that. In terms of the outlook for next year then totally.
So we have been fairly consistent the last couple of months in saying that we are targeting 22% better than also better than 20% growth in revenue and EBITDA for the FY 'twenty two year. We continue to maintain that position. But at this off the back of what Andrew was explaining earlier around why the impact and the EPS hasn't moved year on year as much as you'd expect them to do with the sort of growth we have had, that sort of tax situation corrects itself. Depreciation flattens to a large degree, And that's why we're very confident in our underlying impact and also our EPS being growing circa 40% -plus off the back of a similar CapEx spend in 'twenty one from what we had in 'twenty. We have this degree of confidence around our results off the back of that secured high contracts number.
We have successfully completed the capital raise. It assists with our development in terms of that capital growth without going into further debt. This is something the company was quite keen to do. We were keen to continue our growth pattern. Former capital set of activity levels, as I mentioned, especially Queensland, further work in that form, growing that industrial services business just by itself from up to $31,000,000 $15,000,000 worth of sales contribution.
And just to finally, a comment on COVID because we have seen some COVID effect in this last couple of months with the construction industry shutdown in New South Wales for a couple of weeks and the restrictions are still in place there at the moment. We did lose around about $300,000 to $400,000 of higher revenue in the month of July. However, that revenue will come back at parts of those projects. You don't lose that revenue. It just gets deferred to win those projects kick back in and get ultimately completed.
So at the moment, whilst there was a short term impact on the July profit for the business, it doesn't change one eye on our position in terms of our forecast for the total year. So that's it from Andrew and I thank you. And we now would go back to any questions if neither the participants may have. Thanks.
First question we have from Alex from Morgan Financial. Your question please.
Good morning, Steve. Good morning, Andrew. So I just had a clarification question on the outlook guidance, please. So revenue and EBITDA growth in FY 'twenty two was over 20%. And then underlying NPAT and also EPS growth of 40% plus.
So will that factor in the dilution from the equity raising last month? So if it does, then I presume underlying NPAT growth would be greater than EPS growth because of that dilution?
It does factor it in, Alex, as a short answer. Yes, it does.
Okay. All right. Great. And then you
Yes. I'm just saying what you're saying is right. But at this point
in time, we're saying those percentages that Steve just mentioned.
Okay, great. And then just on the just interesting your trading for the 1st couple of months of FY 'twenty two. So you mentioned that the COVID impact in July was about $300,000,000 $400 if that could that potentially not come back in FY 'twenty two and maybe more that's the 400 grand you get in 'twenty three? Or just potentially kind of,
I guess, the
risks to a potential prolonged lockdown in New South Wales and Victoria, please?
So the August results that we are pretty much getting close to finalizing will have no impact of any construction shutdowns in them. So the effectively, what we had to do, Alex, was we don't like to defer high revenue. We've got year on-site. But the fact that the whole industry was shut down for those 2 weeks, To be perfectly frank, we didn't want to reduce higher, but we were sort of forced to be a position where this most of our competitors for all their competitors were. That revenue will 100% come back over the course of this year.
And in terms of trading, the initial seed of the half year for these next few months, the month we're at the moment and our very accurate forecast at the moment has taken out through at least November, weather is strong.
Okay, great. Thanks guys.
Thank you. Next we have Raju from CCC. Your question please.
Hi, everyone. Thanks for your time today. A couple of questions from me. Steve, I could well be wrong, but I suspect APPRO has more recently been a bit of a collateral damage from some of the, I suppose, commentary, outlook commentary from Borrow and Ed Bra and a couple of others saying that infrastructure environment is subdued. Can you just give us some color around what you think where the disconnect is in terms of what they're saying and what you are seeing and clearly demonstrating?
Is it to do with timing? Or is it are you growing market share? Can you just give us some color on that front?
I have to say we were totally bemused by the Board of the Moose yesterday. I mean, there are far bigger companies than us clearly, but we were we actually were sort of shaking our head a bit because that's not our experience at all. So I can't I don't really understand what's going on in their business. It's different to ours. What I do know is and we highlight that in the Queensland picture.
The biggest road project in Queensland through a long period of time has kicked off. We're on it. That's going to generate enormous amount of revenue for us. It will be our biggest project over the last over the next 2 years. I don't know whether they've got exposure to that job or not, but we do.
The rail projects continue at an enormous pace. The Sydney Inner West Metro contracts have been awarded. And that project won't kick off for another 12 months to 18 months, but the contracts have been awarded. We're in discussions right now with the companies that have won head packages on that project. The Snowy Infrastructure project is going ahead with a pace.
We're getting penetration there. I can certainly understand how anybody could be pointing to that picture. I mean, if anything, I can say is, in fact, if we as I said it again earlier about the 70% uplift because we know it won't be 70%. So if some businesses were forecasting to get back the kind of
growth off
the back of that, then they're going to be misled. But you've got to look at where the projects are. And I think that was the point that I really wanted to make about the chart. The projects are in Queensland for us. That's where the biggest increase is going to be in the next 2 years.
And we've got 50% -plus market share in Queensland. And on that Bruce Highway project, we're running 100 at the moment. Every package that's come out, we've won. So I don't know what again, I don't understand how people participating in that market can talk in that nature. But certainly, from our perspective, our pivot to civil infrastructure away from residential was the right thing to do.
And we're going to continue to grow our business partly off the back of that.
Okay. And thank you for that. The second of three questions, if I may. Again, Stephen, into the Queensland market, given the scale and scope of the projects that are there, like Goose Island, inland rail, and you talked about Cross River Rail and so on. Do you foresee inflationary pressures?
And have you sort of transferred that into pricing and margins? Is there that opportunity as the next 1, 2, 3 years progress?
Look, I think one of the factors and now our Queensland manager is very tuned into this new son of really great job even in the last few weeks with making some adjustments to his pricing is the cost of equipment is going up. So the purchases of new equipment out of both Europe and China is going up at a reasonable pace. And a lot of that has to do with freight costs. I think most people would understand that. So raw material costs are going up, but freight costs are also going up.
So the cost of a piece of capital compared to what it was 12 months ago has probably gone up by 15% to 20%, and a lot of that is used in freight. So our Queensland manager has been leading the charge in that. We're adjusting these pricing expectations, these customs' pricing expectations, take account of that. So I mean I don't see this as being a negative for us. We've got very good channels still to get material into the country that we know a lot of our competitors can't do at the moment.
So if it does become some kind of, I guess, supply shortage or pressure on that, I'm sure we can take advantage of that. But I don't factor that into our forecast. I factor market share maintaining and current rates maintaining. And just off the back of those two factors, I see what the numbers potentially look like.
Okay. That's helpful. The third question is more broadly around the business and thinking about the link between CapEx and your revenues and earnings. Look, I don't have the exact numbers in front of me, but roughly around the 45%, 50% mark of your revenues on the sales side and then the balances in the higher. When do you what is the lag between a CapEx, a $1 CapEx decision today and revenue coming in?
Is it 6 months, 9 months? How do we think about that?
Yes. You've almost hit it right on the head. It's between 6 9 months. So we're making CapEx decisions at the right at the moment. We've made them in the last few days.
And those and we know that the revenue because to start this is this issue, I guess, sort of now of getting product out of the markets, the manufacturing markets. So if we order product today, we won't see it till January, February. So we know that. So we're making decisions at the moment about the So we know that. So we're making decisions at the moment about further investments knowing that we won't see revenue from that decision until certainly the second half of the year and primarily the last quarter.
So yes, it is a 69 month lag in terms of the investments and when you see the when you start to see the return. But again, we know we're factoring into our forecast at the moment that the full year return on the products that we're buying will give us better than 50% uplift in profit.
Sure. Okay. And just to understand that with one follow through question is tendering activity is clearly high. So is there an expectation or discussions with clients that look, if you want XYZ projects to start in the course of financial year 2022, the CapEx, the orders need to be done by October. Is there that pressure building up given the high levels of future quarters of the pipeline?
Or Yes, I
think it's becoming a realization for a lot of our customers that they've got to work a fair way in advance of what they're used to in terms of making their buying decisions. And certainly, especially in the formwork area, it's not so much pressure in that in the industrial scaffold market or industrial services market. I mean, we can get new product there still relatively quickly and mostly from an Australian supplier. But in the formwork area, there's specialized gear. And we're having these discussions.
The CYP, the Build A Metro project, there's discussions going on now on a regular basis about what the 6 month or 7 month programs look like, not the 1 month program, knowing that we've got it will take time to get the equipment required to do the work. And I think that's just becoming that's becoming well accepted by our customers.
Okay. I'll leave it there. So thank you very much. Thanks very much.
Thank you. Next, we have Douglas from Excellency Investments. Your question please.
I just got 2 questions if
I could. And great results, thanks guys. You've really got the business going last and the last, a little bit.
My first question is, Alba and Kay, you have product wins from them. What's the view going forward that we get to keep that arrangement, that franchise?
So we've got, I think, about 18 months to run on the current arrangement with Walmart. I mean, look, we're in pretty consistent discussions with those guys about what the future looks like. Look, we can't foresee the future. But I mean, I think, to be frank, we have our requirement for equipment from Walmart has been outstripping their ability to supply. So I know from discussions with them, we're actually making more demands on them for equipment they are certainly used to in the Australian market and that's putting some pressure on them.
So I don't I mean, that's not necessarily a negative thing to some degree. I mean, we've certainly also been able to source some very, very good secondhand brand new, almost secondhand, all my equipment from some other overseas markets to sort of chop up supply of equipment that they're unable to meet. So we're tied to them as our primary manufacturer or primary form of system supplier. They're tied to us if they're having you into the Australian market. So I'm very confident that that arrangement will stay in place for a long period of time.
So even as your business grows and grows, they're not likely to just all
of a sudden you say, look, I think I can do this on my own?
I think that's highly unlikely. I mean, they don't have feet on the ground in Australia. It's not the way they normally operate. They're different to the Perrys and Dockers of this world who do that. Like all may have they have arrangements with different contractors in, I know, in South America, for example.
We've got people that work with over there. We've got guys in the U. S. They don't have operations in those locations. They have similar arrangements than in place with us.
Okay. All right. That's good to hear.
Then the only other question I've got is just going forward on the significant items in the share based payments, Are we expecting anything at all or similar amounts of that in 2022?
I'll let maybe Andrew slide it up. Look, significant items will certainly significantly reduce outside of share based payments. I mean, look, we have just been washing up a whole range of acquisition Unispan acquisition issues over the last sort of 12 to 18 months, the sort of 18 months since we bought that business. So we've been washing up those washing up those issues and they're basically finished now. Share based payments, Andrew, do you want to comment on that?
Yes. Look, share based payments will continue on. The amount of them is a little bit hard to estimate because when we do new issues, it all depends on the detailed calculation that goes into it. But it will probably be around the $2,000,000 I would think ongoing. But as we said, significant items is an investment.
In general, it's an investment amount, so that should be significantly very low next year.
Okay. So you're looking for significant items in share based paying $200,000,000 mark?
I think very little insignificant items, I would hope. It would be counted in the low 100s really. But the share based payments, Andrew, it's a bit it's hard to nominate the number because it's sort of well, I can't to be honest, I can't work out how we come out. It's a mathematical calculation on the likelihood of rights being granted.
At this point in time, that's fair. Okay. Fair enough. All right. That's fine.
Okay. Thank you very much.
Thank you.
Thank you. There are currently no questions in queue. As there are no further questions, I will now hand the session back to you. Please go ahead.
Okay. So thanks, everybody, for participating. I think that's a wrap for this morning. So I know it's a very busy period of time for everybody, and I appreciate you taking the time out today to hear what we had to say about our results. And I'm extremely pleased with the way the business is running.
Couldn't be proud of the people involved in it. And we're heading in a great trajectory and that will continue. So thanks for your support of ACRO, and we look forward to talking to you all again at the half year results. Thanks very much. Thank you.
Ladies and gentlemen, this concludes today's conference call.
Thank you
for your participation. You may now disconnect.