Ladies and gentlemen, thank you for standing by and welcome to the Acrow Half Year 2021 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, at which time if you wish to queue for a question, you will need to press zero followed by one on your telephone keypad. Please be advised that this call is being recorded today, Tuesday, 23rd of February 2021. I will now hand over to your speaker today, Mr. Steven Boland, Chief Executive Officer. Please go ahead, sir. Thank you.
Thank you very much. Thanks, folks, for joining us this morning. It's my pleasure to give you an update on the performance of our business in the first half of the 2021 financial year, and also to outline the way we think the next six months is going to go, and certainly into the future after that. I'll be running through the investor presentation that we released to the ASX yesterday.
Firstly, I'm very happy with the first six months financial performance of the business across all the key metrics. It's an incredibly strong performance in my view. 32% up in revenue. We're now tracking to over AUD 100 million of revenue per annum. Our EBITDA up 41% to AUD 11.1 million, NPAT up 72%, sales contribution up 24%, underlying EPS up 42%, EBITDA margin up 140 points compared to last year.
We have declared an interim dividend of AUD 0.0075 fully franked. Across every financial metric in the business, it's been an extremely good six months. It consolidates the excellent work that we did last year, consolidating the Uni-span acquisition and the Natform acquisition into Acrow. I'll talk a bit more about those achievements shortly.
The business that we have today and that we will have in the next three to five years is actually nothing like the business that we had when we became a public company three years ago. We have transitioned this business almost completely now to focusing on engineered solutions in the formwork area, focusing on civil infrastructure, and now the industrial scaffolding business that we've acquired as part of the Uni-span acquisition.
In terms of the slightly non-financial key achievements of the first half of 2021, we have secured over the last six months higher revenue contracts up 31% on the prior corresponding period last year. That trend is continuing into the new financial year. I'll talk a little bit about that shortly.
We stated clearly when we became a public company that we wanted to grow our formwork footprints primarily in New South Wales and Victoria in the civil infrastructure space. We have succeeded beyond our own expectations, certainly in the Melbourne market, where our revenue is now up 120% on the prior corresponding period in Melbourne. We've gone from nothing to being the absolute clear market leader in that market now in Melbourne.
Really, I guess the last part of the jigsaw puzzle for us in Acrow to deliver on our promise is to get the same position in New South Wales, and I'll also talk about that shortly. Product sales growth or product sales in general is now a very important part of the Acrow business, has become more important since we purchased Uni-span and have the relationship now with ULMA.
It's now 18% of group revenue comes out of product sales. It's proving to be an incredibly effective tool for us in both acquisition and retentions of customers, something that really Acrow never really had a full understanding of until we made the Uni-span acquisition. That sort of segues into the next point there around our expanded operating footprint.
We have a great opportunity to organically grow our business in, I guess the previous non-Natform, Uni-span states of Victoria, South Australia, Western Australia, and Tasmania by utilizing both ULMA and Natform products in those regions. This is especially now in the case of ULMA products, where we have gear now in Tasmania, South Australia, and Western Australia that we didn't previously have.
We've just won a very large contract in Western Australia worth circumscribed AUD 600,000-AUD 700,000, utilizing ULMA equipment for the first time in that state. This opening up new channels to revenue in new markets will be a very important part of our Acrow story going forward. The industrial scaffold business, you'll see as we go through the numbers later, is a highly profitable business with great growth opportunities.
We're still focused primarily on the Queensland market, but we have won contracts now in both New South Wales and South Australia. I expect this to become a significant part of the Acrow story as well going forward. The last point here, I'm extremely pleased to be able to report that the Natform business sales revenue was up 33% on the prior corresponding period.
I will go through a bit more detail around this later. If there were any doubts about the value of the Natform acquisition in Acrow and its results, I think they are now extinguished. Turning to page seven of the presentation. We will continue to show this because it continues to be the story, and it's becoming even a larger part of the story. Where are we in this cycle?
This question gets asked quite frequently around when does the civil infrastructure boom in Australia peak? You can see by this chart, it isn't even close to peaking yet. A couple of reference points here from 2018, when Acrow became a public company, to where we are today, there's been AUD 2 billion of growth in the civil infrastructure spend in the country over that period.
Between where we are today and between the projected peak of sort of 2023, 2024, there's still another 70% of growth in major transport infrastructure projects in the country forecast. The really important thing for Acrow in this is if you look at that chart, the three biggest projects that are forecast to increase that spend over the next two to three years are all in Queensland.
The Bruce Highway, the Cross River Rail, and the Inland Rail are primarily, well, Inland Rail is primarily a Queensland project and certainly Cross River Rail and Bruce Highway are Queensland projects. We are already winning very significant packages on both the Bruce Highway and the Cross River Rail, which I'll talk about later on. I'm extremely encouraged by the continued growth in this area.
What is a significant hill that it's going to climb in the next two to three years. What's not talked about here, and this is transport infrastructure, are other civil infrastructure projects across the country that we're also getting a strong foothold on and will contribute to our revenue growth over the next period of time. In the mining sector, we're getting, at the moment, circa AUD 100,000 a month of revenue out of Adani.
We will shortly be confident of securing a significant package on the Ravenswood mine in Queensland. In utilities, the Snowy Hydro, we've mentioned in the past that we've sold the first lot of formwork equipment onto that job. It was only around about a AUD 300,000-odd sale, but over the next five years, Snowy Hydro will be a significant contributor to revenue in our business.
The Warragamba Dam upgrade in New South Wales, we've put packages in to the major tenderers for the Warragamba Dam project over the next five years. Rookwood Weir in Central Queensland, another dam project, significant dam project. Coomera, which is on the Gold Coast, water treatment plant, another significant utilities project. In the defense sector, there's an Australian-Singapore military joint venture to develop a training facility for the Singapore Army, just north of Townsville.
Again, we are already getting inquiries around that project, which is effectively building a mini city. The transport infrastructure is a great picture, but there's a significant number of other non-transport style civil infrastructure projects that we are already on our radar that will contribute to revenue to our business over the next three to five years. In terms of the state of the markets, one thing I'd say there is we go green for good, amber for stable, and red for soft.
If there was something called double green, that would now be Queensland Civil. I've never seen anything like the pipeline opportunity for Acrow in the Queensland civil infrastructure market at the moment in the eight years I've been working in Acrow. That's particularly good news for us given our market position in Queensland.
You can see across the country, pretty good news across most sectors except for New South Wales residential. Those who follow their story know that we've exited the two-story house residential market. Whilst there's been a lot of reports that that sector is now going to see some uplift due to government funding initiatives. In the part of the market where we play is, which is more to do with high-rise residential, that's still incredibly soft.
I'll talk about that a little bit later on too. In a lot of cases, the residential story for Acrow has become basically a non-event. It's now such a small part of our revenue and our earnings now, our potential, that it's almost not now worth talking about. Equipment hire wins and pipeline. We had a very good six months compared to prior corresponding period, up 31%.
We had a very good six months compared to the last half of last year. As I said, we've had a very good start to the year, two months in, and we still haven't finished February yet. Obviously, we've still got four days to go of February, and we're up sort of 25% compared to where we were for January, February of prior corresponding period.
The month of February at the moment is the third best month in the history of the business in terms of new contracts won, sitting at about AUD 3.6 million. That number could well get to AUD 4 million, AUD 4.5 million by the end of the month.
In terms of the pipeline, the one thing I will point out is that if you're looking at the June 2020 number to the December 2020 number, the June 2020 number included AUD 15 million on one package on the Cross River Rail in which we were not successful. If I take that out, and that was always going to be very difficult for us because it would have quite an enormous amount of capital investment, and we're up against a couple of European companies that had proprietary equipment already that they'd been doing similar work on the Sydney Metro Rail project.
That one excluded, we're still up significantly in the rest of the business on pipeline value half to half, and certainly compared to the last December 2019 to December 2020 period.
We are getting real value out of cross-selling. We're getting, as I said earlier, real value now out of opening up new channels of revenue by utilization of Uni-span, ULMA Natform equipment across all of the geographies in which we operate. Page 10 just proves again the strategic pivot and how now irrelevant residential is to Acrow. 80% of our earnings now come out of formwork and industrial scaffold, up from 43% in 2017.
Every six months you look at our business, you'll see a lower number again in residential out of what will be a growing total revenue pool. You'll see residential continue to reduce in that story. You can see that we've got very good growth in that industrial scaffold from full year 2020 into half year 2021. That will continue to be a more important part of our business.
The pivot that we undertook three years ago is continuing. It's not complete. As I said, I'm sure when we do a full year 2021 presentation, residential will be less than 20% of the total value of revenue in Acrow. A bit of color around these marquee projects. We've really developed, and off the back of the brilliant work of our engineering team and the innovation that our engineering team brings to civil infrastructure projects.
We've developed a real sweet spot in the rail projects, which is really important, clearly, given the predominance of rail projects across the Eastern Seaboard in the next three to five years. On Sydney Metro Rail, we last year undertook work in both hire and sales on Barangaroo, Marrickville and Chatswood stations. In the last four months, we've won AUD 4.5 million worth of work on Waterloo and now Crows Nest.
Particularly pleased with the Crows Nest contracts that we've only won in the last few weeks. We've won AUD 800,000 worth of hire contracts on Crows Nest that will go for a six-month period between March and September. The fundamental difference for Acrow on those projects was the innovation that our engineering team have brought to the requirements that the customers had for those jobs.
On Melbourne Metro Rail, the absolute flagship project for Acrow over these last six months has been the Arden Street station, where we've generated circa AUD 1.5 million - AUD 2 million in hire. That now will continue, maybe not exactly at those same levels, but we will win packages on CBD North, CBD South, and there's more work to be done at Arden Street.
The Western Distributor, which is actually interesting because I'm sure two years ago, we expected to be getting more revenue from the Western Distributor than we have out of Metro Rail. Doesn't mean the Western Distributor is not a great contributor, it just goes to show, though, that Metro Rail is sort of dwarfing it now in size of opportunity.
Western Distributor, it's been quite well publicized that it's slower than it was anticipated due to some government issues with the contractors around getting rid of contaminated soil, et cetera. They're still generating good revenue for us now. We're only now getting into the High Street Bridge part of the project in which we'll probably see the greatest amount of revenue for Acrow over that project's life.
Now we're turning our attention to the Brisbane Cross-River Rail, where we've got our first package of approximately AUD 600,000 of revenue for The Gabba station. We've won about AUD 400,000 worth of sales revenue for some of the tunneling work, and we're now turning our attention to Boggo Road station and some of the other stations there.
We've now come up with almost a unique Acrow proprietary system for the station boxes. This is really important because if you look at the growth of the rail projects in New South Wales and certainly the Cross-River Rail and how that's still going to transform, there's something like 40 more stations to be built on the Eastern Seaboard over the next three to five years.
What we've come up with as a way of dealing with the station boxes, I think, will give us a great opportunity certainly to roll out that sort of work over this next period of time. On page 12 of the presentation, in terms of our segment breakdowns, total revenue, you can see half to half up 32%, still up from the second half of 2020 to the first half of 2021.
That's despite the biggest hire contract that we've ever done in Acrow, Sun Metals, generating something like AUD 2 million in formwork hire in second half 2020 and not being replicated in first half 2021. That contract finished. We've still managed to keep the revenue for the business at that same level, despite that AUD 2 million of revenue dropping off from Sun Metals. Similarly, on the sales of formwork, AUD 19 million and AUD 19 million.
We had a one-off sale to BKH for Barangaroo Station that generated AUD 2.8 million of revenue in second half 2020. Despite that not being replicated directly in first half 2021, the revenue's still been able to be maintained at that level. Strong revenue, strong sales contribution, strong underlying EBITDA of from AUD 7.8 million - AUD 11 million. The AUD 11.6 million down to AUD 11 million is just representative really of the Sun Metals' high margin revenue dropping off.
Still, that's a result that we're incredibly pleased with and it's above our budget and was above our expectations as we entered that half. In the formwork division, total contribution is up despite, again, Sun Metals and that sale to BKH. The standout figure is Melbourne, 120% up. Extraordinary result, really, over that six months, first half 2020 to first half 2021. I will point to key project wins here. I mentioned Gabba station.
Cooroy to Curra highway upgrade, which is the Bruce Highway in Queensland. That is work that we have won but has not commenced yet. Waterloo Station in Sydney. It's work that is just in its infancy. Will go from sort of January through to June, July. Arden Street is pretty much now complete, most of the revenue in the first stage of that.
The Shenton Quarter Urban Village in WA, which is the first formwork contract in WA, has not commenced yet. We're kicking in at about March, April, and it's worth about AUD 600,000 over about a seven-month period. Now, what is not mentioned there is I can point to the Crows Nest Station that we have won AUD 800,000 worth of hire revenue in New South Wales that will go from March to September. New South Wales is obviously very important for us now.
I've got more confidence now than I've ever had that we've now got the right team, and I'll point to a part of that shortly. Natform, biggest ever screens contract in the Natform business, the AUD 1.1 million contract at 180 George Street, Parramatta, is going along at the moment. All good news in our formwork division.
A couple of specifics. Here's a story around Melbourne. We talked about 120% increase year-on-year. The marquee projects at the Western Distributor and Metro Rail. Record secured contracts of AUD 1.6 for the period, up AUD 4.5. You can see in the chart below the way the quarterly revenue has gone for Melbourne formwork over the last six quarters.
Bob Caporella, who has been the standout formwork guy in Acrow now for certainly the whole eight years that I've been here, moved from Queensland to Melbourne just over two years ago, has done a remarkable job with the team down there in getting us to where we are now in the Melbourne formwork market. Bob is now moving to New South Wales. He will be starting as the New South Wales GM in the next week.
We've appointed a new Victorian formwork GM, or sorry, Victorian state manager, sorry, in Brad Craven, who comes from the construction industry after a search. Very confident that Brad will continue the great work that Bob has established there with the team. If you look at the history of Queensland, Bob set that business up with a great team there, moved to Victoria. The momentum in Queensland has continued.
Exactly the same thing I believe will happen in Melbourne, and now we'll get the benefit of Bob's expertise in the New South Wales market with some really good guys that we've now got on our formwork sales and engineering team in New South Wales. Good days ahead, I think there. In terms of Natform, again, I think probably the achievement that I'm most proud of in Acrow over the last 12 months, you can see the chart in the bottom there, how the Natform revenue has gone quarter to quarter over a six-month period.
We had a slowish start to this acquisition, but now it's exceeding the expectations of the business that the business had when we first bought Natform. Fantastic pipeline of opportunities, incredibly talented and entrepreneurial management team. There's some really great young people in that business who really understand how to make a dollar.
Current forecasts show that Q4 2021 will be the best quarter of revenue in the Natform business. Not just in New South Wales, we've got some really good signs now of growth in Queensland. Already the numbers in Queensland are excellent, and in the next six months, we believe they'll get even better. In terms of the industrial scaffold division, again, you can see the returns.
It's a very profitable business, 48% contribution margins, revenue growing from AUD 6.6 second half - AUD 8.2 first half, which is a real like for like six-month comparison. We are opening up new markets in New South Wales and South Australia. We've won our first contract in South Australia, Olympic Dam. We've won a significant contract at Bayswater Power Station in New South Wales, and we're in the throes of hopefully securing a second contract in the same area.
We renewed the Origin Energy contract, Surat Basin, which is the core underlying, generates almost 25% of the total revenue industrial scaffold. This will be a growing story. We'll be investing in this business over the next 12 - 18 months to expand this business, both from a geography perspective, but also in the style of work that we can carry out within industrial scaffold. It's a watch this space area for Acrow.
Commercial scaffold, look, it continues to be, as I said, less relevant. I'll give you a story around what's happening in this market. One of our largest competitors in Australia in this business, whose whole business is commercial scaffold, is trying to flog it. I got a phone call six weeks ago. They're trying to sell the business for asset value only, and they're not getting any takers.
This is a business that turns over AUD 120 odd million. They just want to get out of it. They can't sell it. We would not be interested in buying that business. Certainly in the New South Wales market, anything that's got CFMEU type involvement on a project, it's almost not worth even tendering for it. The prices are ridiculous. We'll continue to watch and brief.
We've got better things to do with our time and energy than knock our head against a brick wall in a market that's in decline. It's not particularly a smart market to operate in. Certainly in other parts of the country, like in Tasmania, for example, most of our revenue in Tasmania comes out of residential scaffold. We make good money in Tasmania. Because we make good money in South Australia out of residential commercial scaffold.
We've developed quite a nice model now in Queensland and Victoria where it's dry hire and medium density. We don't even go anywhere near a job that's got CFMEU involvement. We'll be doing the same thing in New South Wales, and this will stabilize this business. As I said, I expect the revenue out of this part of the business to stay fairly constant, but it will become a lower number as the revenue grows in formwork and industrial scaffold.
Big contract wins. I've alluded to a number of these already, I'll quickly run through them. I mentioned the Surat Basin for their industrial scaffold. I've mentioned Waterloo. I've mentioned the Bruce Highway, Cooroy to Curra. It says AUD 1.4 here. That's already now more like AUD 2 million worth of revenue. George Street for screens for Meriton, for the screens business. The Shenton Quarter is a CC4 job.
Another screens contract at Christie Street, St Leonards. A couple of our significant wins in industrial scaffold, the UGL Tarong, North Stanwell, and Bayswater Power Stations, the Downer EDI, Millmerran, Wivenhoe , and power stations. A few contracts that certainly the Natura Apartments we mentioned because it uses a number of different Acrow systems on the one job.
It's scaffolding, it's labor, it's screens, it's a full package. Our first Cross River Rail contract. There's a couple of others getting very close to fruition there as well. Just as an indication further of what Natform does, Natform also wins the screens work in Canberra. A AUD 350,000 screens contract for the Nightfall job in Canberra. I think we've got about five live projects at the moment for screens in the Canberra market.
All in all, a very good six months for the business. We're looking forward to a better again next six months. I'll hand over Andrew now to run through the financials, and then I'll wrap up with more about the forecast in the coming periods.
Great. Thanks, Steven. I'll push everyone over to slide 21, which is the profit and loss. I think you can see from the outcomes of this that the strategic pivot towards the civil infrastructure and formwork industry has been quite successful. I'll just start off from below EBITDA. Steven, I think has covered the 41% increase to AUD 11.1 million enough.
Below that, we've depreciation and interest, both increased in line with the four months of Uni-span, plus the renegotiation of a number of leases we had in the year, as reflected in those increases. Tax expense, you'll see we've got a AUD 532,000 tax expense for the year. This is probably something that's going to be on an ongoing basis, relatively what the base is going to be. This tax expense is based on the two taxpaying businesses being Uni-span and Natform.
The approximate effective tax rate will probably hover around the 12%. That gets us to an NPAT underlying, an increase of 72% from AUD 2.1 million up to AUD 3.7 million, which then leads us to an EPS underlying increase from AUD 1.19 - AUD 1.68 or 42% increase. Steven already mentioned the AUD 0.0075 fully franked dividend that has been announced yesterday as well. Moving on to the next page, the balance sheet.
Our net debt percentage has moved from 20% at June up to 23.8%. This has been a function, both of a decrease in cash from AUD 7.2 million down to AUD 2.2 million and a decrease in the loans and borrowings by AUD 1 million. The cash has decreased essentially from a deferred payment of AUD 3.5 million approximately for the last Natform deferred payment, plus the first Uni-span deferred payment.
That essentially, that AUD 3.5 million is essentially a reduction in a debt item. We've also obviously had the final dividend from the last financial year, plus as we'll get into a moment, relatively elevated CapEx for the first six months. That was basically the reduction in cash that we're seeing here. It's also worth mentioning on the balance sheet, you'll see that inventory has increased by about AUD 2.4 million from AUD 5.6 million-AUD 7.8 million.
This is really in line with the increase in sales this six months. The inventory levels we have will probably hover around this amount going forward. Obviously, this does have a drag on working capital. The other point worth pointing out on the balance sheet itself is the other payables amount down just above total liabilities. That's decreased by AUD 7.2 million-AUD 3.4 million.
As I said, we paid AUD 3.5 million in the first six months relating to deferred payments. We now have only one deferred payment left being for the Uni-span acquisition of AUD 3.5 million. After that's it for deferred payments. It's also worth pointing out from a receivables point of view, our debtors days, even with what's been going on with the world and with the economy, our debtors days actually improved by three days from the prior corresponding period from 58 days down to 55 days for the outcome.
Moving on to the next page of cash flow. As you know, the way we look at dividends and what our sort of cash profit is, we look at our underlying EBITDA and then take off our maintenance CapEx and also any tax paid.
What you can see on the top left table, we've got AUD 11.1 million EBITDA. We take off actual cash leases of AUD 2.5 million because they used to be included in our underlying EBITDA and is a cash item. We've got maintenance CapEx spend of AUD 1.6 million, but we've also included another line called IT spend. The reason we've included this spend as a take off is we've had elevated an IT refresh during the period of just over AUD 700,000 plus a normal amount of office maintenance, office infrastructure spend.
The over AUD 700,000 of IT was an unavoidable refresh of all our IT hardware and some of our software. This is essentially a one-off. Obviously, in a number of years, something like this will be required again, but not in the foreseeable future. That was elevated.
We also had the cash tax, as I mentioned, of AUD 0.6 million. That gets us to a cash operating profit of AUD 5.5 million. 26% increase from the previous year. If we'd taken out the elevated IT spend, we would've had a cash operating profit of AUD 6.3 million. Just below that, we have the net debt bridge, which shows basically where we got from the AUD 14.6 million net debt at June 2020 to the AUD 18.7 million in December 2020.
As you move to the right, you can see we had cash flow from operations of AUD 11.7 million. The majority of that, when you look at where the uses of that cash has been, we had CapEx of over AUD 6 million, which we'll get into in a moment, and deferred consideration, which we've already mentioned, of AUD 3.5 million.
The majority of the cash flow from operations in reality has been used from steel investment spend. Moving over to the capital expenditure page on 24. This is our standard page on describing CapEx. During the half year, we had AUD 6 million of total CapEx, AUD 3.5 million of growth, AUD 930,000 on office and IT maintenance, and AUD 1.6 million in maintenance CapEx.
I can confirm that that AUD 3.5 million is elevated for the first six months, but we will get the benefit of that ongoing, in particular in the next six months. We've done a review of our growth CapEx, and I know in the past we've talked about it needing to achieve a 40% IRR, but what we're looking at now is more a 50% IRR on growth CapEx. We've done a review of our previous projects, and we are achieving these levels.
One of the examples we can use, and it's a great example of the way that we look at CapEx, is we had the Sun Metals job that Steven was talking about before, where we spent around AUD 3 million on gear. Essentially, we got that return back in the first job. That gear is now being redeployed to other states and being deployed to other jobs. We've basically got it back on the first job.
The other thing that we have a look at with growth CapEx is we do not buy speculative gear. We'll only buy gear that achieves these IRR target, or that we model up that are going to achieve the IRR targets. We're still building a formwork business. You've seen the position on where civil infrastructure is going, not just with transport, but with, as Steve said, defense and other areas.
The reality is there's still going to be an impost on capital ongoing. There are significant opportunities still coming up for the business. With that, I'll hand over to Steve.
Okay. Just going through strategy outlook and priorities. Page 26, it's the same as it's been for a while, which to me is a good thing because this is a consistent strategy. This is what the business is about. This is what we're doing. We have become the leading engineered formwork, sales, and hire equipment provider in Australia. We've done that.
We aspire to become the leading engineered scaffold solutions provider. I continue to be thrilled with the quality of the people that are working in this business, both those that are coming into the business new and those that are developing their careers within Acrow. We have some incredibly talented people in the business now.
It's almost unidentifiable from what we had eight years ago, seven years ago, when I first came into Acrow. We've refreshed the team almost, I'd say 75%. I think we've got some great people in the business. The organic growth will continue to be now, I think, a more important part of our story going forward, probably more important at the moment than acquisitions.
There's not today one specific acquisition that's on our radar. We're always open. Sorry, there is one that we would look at. We've had some discussions. It's probably a few years off, to be honest. Organic growth through geographical opportunities opening up for a range of products and for product development. I should say here on this point, our research and development going on through our engineering team now is absolutely phenomenal.
Something, again, that wasn't happening in Acrow for a long period of time. We've got new products now coming into our range that will go straight out on jobs off the back of the work being done by our engineering team in research and development. That last point around acquisitions, yes, we are an acquisitive business. Right at the moment, there's nothing that I can put my hat on that I think will come off in the next period of time.
I just want to make the point here that if you look at what this business has delivered in the last three years, we've delivered on two now very successful acquisitions that have helped us transform this business dramatically. We've delivered on a growth story in Melbourne formwork. We said we were going to penetrate that market, and we have.
In my view, we've really only got one more thing to do, and that's New South Wales. We need to get the New South Wales model the same as Queensland and Victoria, the early signs are we've got some very good opportunities in that area. Then again, it's about rolling out the new products across the country, and that will be the Acrow story. Page 27, just again, this is who we are.
We're a unique business now. We've got geographical spread across the country. We've got a fleet of equipment that no one can replicate. It's a great position to be in. In terms of our outlook, we go into these next six months and we're nearly three months through now with a strong tailwind off the back of the new hire contract secured in the first half.
I mentioned earlier that January and February, we're already up to the circa 20%-25% again in new contracts secured compared to the prior corresponding period. February looks like being our second-best month probably ever in new contracts secured. Very strong product sales opportunities exist in the business at the moment. I mentioned Queensland before. There's absolute uplift in activity in Queensland.
Almost every day there is something new significant coming up that would add to us. As I said, the position in Queensland in terms of market opportunity is better than I've seen in the eight years I've been with Acrow. Natform's 2021 earnings second half will be in line with the first half, however, definitely the fourth quarter. Fourth quarter 2021 will be the best quarter in the history of the Natform business within Acrow.
It's a great sign of getting, again, a tailwind going into the following financial year. Mentioned New South Wales. I expect to see significantly improved results. Sydney Metro rail projects, both Crows Nest and Waterloo secured. Further growth in industrial scaffold. I still think that there's a bit of a two-speed construction sector going on. It's probably not as pronounced as it was.
A little bit more confidence obviously coming with, hopefully, the results of COVID in the country and vaccines and things like that might do, and borders reopening, and all of those things will give a bit more confidence in general. In terms of our forecast, we say we remain comfortable with consensus broker forecasts. We're not a company that wants to go out there with bold statements about where we think we're going to go. We like to be conservative.
We like to do better than expectations. At the moment, we're going to continue to say we're comfortable with consensus forecasts. Finally, the wheel of priorities. This is all the same story: new markets, new clients, promoting formwork capabilities across the markets, grow industrial scaffold, further focus on sales and product sales and what they can bring to the business.
Our absolute key competitive advantage being our engineering expertise and developing that across the whole of the country and growing that across the, we've got 30-odd engineers. We are continually bringing in high caliber professionals. Just in the last six months, we've brought in a very experienced formwork guy who's worked across the country into our New South Wales business to add some depth there.
We've just hired a new Victorian state general manager who comes from the construction industry with a great track record in hire in the construction industry. That commercial scaffold, look, it's probably becoming less important in terms of looking for opportunities there. There's lots of opportunities to make acquisitions in this space, and it's just not part of what Acrow is about these days.
As I've mentioned a few times now, I think we'll hold that in terms of what the total revenue for that business will be. It'll hold, but in a growing business, 20% will become 18%, will become 15%, will become 10% of our total revenue stream over the coming time. That's it from us. Thank you. Now we'll open up to any questions any of the participants have got. Thank you.
Thank you very much, sir. Your first question is from the line of Alex Lu from Morgans. Please go ahead. Thank you.
Hi, Steve. Hi, Andrew. How are you guys going?
Good, mate. You?
Yeah, that's good. I've just got a few questions. I might just start off with product sales, please. Obviously revenue for product sales was up very strongly, so that was almost 200% there. Wanted to maybe dig into some of the details behind the reasons behind that strength. You say you're focusing more on it, but are you marketing it more? Also, is it mostly in a few states, or are you seeing that product sales strength across all states?
Look, I think firstly, Alex, it came out of the acquisition of Uni-span, really, in terms of the stimulus. It's always been something that we thought. We've sold ply and timber, and we still sell ply and timber, and there's a very good opportunity for us there now to grow our margins in that area. We've sold hardware consumables to formworkers. We've sold a bit of new equipment.
We really didn't have a proprietary sort of system as we do now with ULMA gear, where we can sell systems into formworkers and then get the benefits of repeat sales and cross-hire opportunities as they seek to grow more volume of work. They need more gear to complement what they've already got from us. It's very strong in Queensland. It's very strong now in Victoria. It could be stronger in New South Wales. It will be.
Actually, in the last three to four months, it's become a really strong part of the Western Australian formwork business. We only do formwork in Western Australia. We don't do any commercial residential scaffold there. Sale of product has become a significant generator of profit in that WA business since probably about November and shows great signs to improve. Look, there are right now, as I sit here, I know of at least three very big opportunities for sales of product and with real profits attached to them that may or may not come off.
They're big swing factors in our numbers, and we're not factoring any of those things at the moment into our forecasts, but they can add considerable benefit to you if they come off. I've said this, I think, for the last maybe 12 months, sale of products now has almost become as important to us as generating hire revenue. We run a pipeline of product sales now that we monitor on an ongoing basis, the same as we do with hire revenue.
Yep. Do all your customers know that you do hire and also product sales now as well? Is that clear across your current customers and also your potential customers?
Informally, yes. I'd say that's well-known now informally. You can always be doing better, I think in the New South Wales market, again, I'll say that's going to be a growing understanding of our capabilities in that area. We also generate sales. We sell scaffold in the Queensland market at reasonable levels, both in industrial and in commercial, but mostly industrial.
I think we definitely can grow that market in New South Wales, Victoria, and the rest of the country. The Queensland scaffold business generates an average of around AUD 300,000 - AUD 400,000 a month in new sales. We do probably AUD 50,000 in New South Wales and Victoria. That certainly is an area that we can further grow.
Okay. Maybe moving on to industrial scaffolds. They had a strong result as well. Obviously, the plan is to expand that business both geographically and I was interested in the part when you said into new industries. Maybe just talk about the types of industries that you're currently in and then the ones that are potential opportunities in the future, please.
Yeah. It's not just maybe in new industries, but it's in new products that we bring to some of the existing customers, and customers that we're targeting, where previously we would have just basically given them the access scaffolding system for their shutdown. I'll give you an example right now. Bayswater Power Station in New South Wales, we've invested circa sort of AUD 100,000 on what's called a furnace kit, which is a scaffold that sits inside the furnace when they're doing the shutdown. Now, we never had that equipment before in Uni-span. We've invested in it.
We've won a contract worth sort of three times that amount of money now for Bayswater Power Station for the scaffolding that sits inside their furnaces as well as the perimeter scaffolding required for the workers to have safe access while they're doing the shutdown. We've also got a small investment in something called rope access, which is effectively where the workers are on a rope and a harness hanging off the side of tanks, et cetera, while they're doing painting and maintenance work.
There's other types of systems that go hand-in-hand with just providing the perimeter scaffolding access when shutdowns are happening. That's the sort of stuff. Look, this is mining, power stations, gas and oil fields, utilities, sort of hydro power in Queensland.
We at the moment would have still, call it 90% of our revenue, of that AUD 8.2 million, 90% of it's coming out of Queensland. A bit starting to come out of New South Wales, a little bit starting to come out of South Australia. There's nothing yet in Victoria. There's nothing yet in Western Australia.
I think I said similar things to this six months ago, but it's a real story of growth. We're also looking to invest in a different style of scaffolding system that just works in industrial scaffold for us that will open up a whole range of further opportunities with customers that want to use that style of scaffold.
I'm not going to sort of speculate as to what this number could be in terms of total revenue over the next 12 - 24 months, but certainly, it's got considerable growth opportunity in it.
Okay. Thanks, Steve. That's all from me.
Thanks, Alex.
Thank you very much. Your next question is from the line, I believe from Tina Wilson from EME Capital. Please go ahead. Thank you.
Thanks, Steve. It's Tina from EME Capital. I just had a few questions on the pipeline. Hoping you could just help us understand what's sort of your forward visibility on the pipeline? That's the first question. Secondly, once you've identified something in the pipeline, what's sort of the rough sort of average time from the project being in the pipeline to you actually winning it? That'd be really helpful. Thanks.
Okay. Thank you for that question. Firstly, I want to, I guess clarify what goes into our pipeline are actually jobs that we have put a quote or tender in for. You won't see in our pipeline, for example, Snowy 2.0, which is going to be a big opportunity for us in the next five years. There's no specific package on that job at the moment that we've quoted on that's in our pipeline.
Okay.
You won't see, "Oh, we think there's AUD 10 million worth of work on Snowy Hydro in the next five years." You won't see that in a number. You only see absolutely jobs where there's a package identified, and we've either quoted or are about to put a quote and tender in.
Right.
It differs between the different types of sectors. On civil infrastructure, for example, you'll have a job that might be sort of six to 12 months away. When you get the project awarded, you've got to mobilize in the space of maybe a week or two weeks. Chatswood Station is a prime example of that. We won the Chatswood Station second stage. We've won two parts of that.
One was worth AUD 500,000, one was worth AUD 300,000. The AUD 300,000 part of that contract that's going to go for six months, we won that on Friday. We've got to have gear on site for that job in two weeks. It's a lot to do in two weeks to mobilize that equipment. That's how quick that stuff happens. On general scaffolding, and certainly on the industrial scaffolding work, you get a lot longer lead time to build up.
You might get two months of lead time from time of winning the contract to mobilizing the contract. It can be quite different. Sorry, and screens the same. Screens is actually quite a large number in that pipeline. I think it's circa AUD 30 million of the AUD 70 million in our pipeline at the moment are actually Natform screen-type jobs. Some of those jobs are probably 12 months away. It's very different across the sectors.
Okay, thank you. If I could just ask, now you've completed the Natform and Uni-span acquisition, have you found, in terms of your competitors in the tender, has that changed in your experience?
No, definitely. We're now able to quote certainly, we weren't in the screens business before we bought Natform, but we are getting fantastic cross-selling opportunities off the back of the Natform business. Actually, in the last six months, especially in Queensland, we're doing some great package deals now of where we provide the screens, we provide perimeter scaffolding, we provide the propping scaffold required that's sitting under the laying of concrete, whole packages.
In the formwork area, we've got a level of equipment available to us now that the old Acrow didn't have. Certainly, some of the old Acrow meat and potatoes gear is still out there, and certainly in Melbourne. A large percentage of the work that we've won in Melbourne has actually not been off the back of ULMA or Uni-span gear.
It's just been really strong utilization and strong engineering capability of, again, what I'd call existing meat and potatoes Acrow gear. Across our fleet and across the country now, I'm not making a bold statement that I can't back up if I had to, but I can back it up. We've got a fleet of equipment across the whole of the country that's probably second to none now of any of our competitors.
Okay, great. That's all from me. Thank you very much.
Thank you.
There are no further questions at this point, gentlemen. Please continue. Thank you.
Okay. On the basis that there are no further questions, I'd just like to thank everybody for coming on board this morning. I know it's a very busy time. I know there's a number of companies in the like industry to us who are doing their results presentation at exactly the same time as we are today.
It's an incredibly busy period. I thank those of you who have come on board and taken the time to listen to our story, and we hope you continue to support our business. Look forward to chatting again in six months' time with our full year presentation. Thanks again for your time and questions today.
Thank you very much, sir. Ladies and gentlemen, that does conclude our teleconference for today. Thank you for participating. You may all disconnect. Thank you.