Thank you for joining us today. I will now hand the call over to Steven Boland, CEO, Andrew Crowther, CFO, and Matt Caporella, COO. Please go ahead.
Thank you very much. Good morning, Steve Boland here. Welcome to another half-year presentation from Acrow, joined by Andrew Crowther, our CFO, and Matt Caporella, our COO. Once again, I'm very proud of the tremendous result for the business. It's been another great six months. We've really taken this opportunity in this period and over the course of the rest of the financial year to position the business for what we know is absolutely going to be ahead of us in the next couple of years as a minimum. Highlights of the first half revenue was up 25%, and that's a record six-monthly revenue contribution for the business, EBITDA was up 11%.
We've been enunciating for some time now the strategy about significantly growing our industrial access presence. That business has performed off the charts really in this six-month period. It's now 50% of group revenue. And this is before we see any benefits yet from the recently success we've had in winning the Perdaman contract in Karratha, Western Australia, which gives us a very strong beachhead into the Western Australian industrial market. We will generate AUD 40 million-AUD 45 million of revenue and significant profits over the next two and a half years.
We continue our strong focus on product development. In that regard, one of the—and Matt will go into more detail on this—but our most recent addition to our fleet in terms of product development is our own Uni-Ring, which is a Ringlock Scaffold that will be used on Perdaman as its first venture and in the industrial access market more broadly. Cross-selling, especially now in the commercial form of AcrowDeck, in the likes of our Jumpform and Screens.
That great big product is becoming a strong feature. We've had a great six months in terms of winning work. The pipeline continues to grow. I'll go into a bit more detail about that shortly because there are some factors that have affected the ability for contracts to be won, to be generating the revenue we would normally expect them to in this financial year, primarily in Queensland. I'm going to spend a bit of time going into the detail around that. We've chosen to have a very aggressive six months in terms of capital expenditure. I'm going to go into more detail about that as it absolutely fits in line with our strategy that I'm also going to outline shortly.
I'm pleased that we're announcing full-year guidance of 27% up in revenue, 14% EBITDA, 11% impact, and 2% EPS growth, all at the midpoint of our current guidance. The Acrow overview has changed a bit, but not much. One of the big changes here is the number of people that we employ in our full-time equivalence is up to 424. That's primarily off the growth of the industrial access business. What is not on this map and probably should be now is a nice little red dot indicating Karratha because the operation up there has now commenced. Our competitive advantage continued to be exactly what they've been for the last few years: the quality of our people, our engineering expertise, the range of products we've got, and the geographic footprint that we operate across.
Journey so far, one thing that's—I mean, added to this, and we haven't announced this, and we haven't announced it, of course, I mean, it's not actually a material announcement in terms of what its profit impact is, but it is very important to our business in terms of what it now gives us as another strength to our bow. Just this month, we purchased a business called ATEC. ATEC is a registered training organization, is a trainer of scaffolders primarily, based in southeast Queensland. So we bought that business. It has a revenue stream that goes along with it. It's an AUD 1.1 million acquisition. But more importantly, it then goes hand in hand with the development of our new training facility in our Mackay Depot, which will be up and running in the next few weeks.
Obviously, as we continue to grow our industrial footprint, it's really important that we've got access to labour. One way of doing that and shoring up your future is basically breeding your own, finding people that want to become scaffolders, putting them through training programs, becoming accredited in what they need to do to operate on big industrial plants. It is a strategic investment and a very good one, I believe. I'm going to outline now some things around our strategy. I didn't talk about this at our AGM, but I think it's worth reiterating exactly what are the main characteristics of Acrow's growth strategy.
Firstly, broadly, it is a clear strategy now that we've been adopting for at least the last couple of years as we've seen the opportunity in industrial access and as we've also grown our product development capability. It is a very clear strategy about profitable growth for the business. It is about diversification of revenue streams across the core product group and service offerings. We have done a really good job over the last seven years to become the premium formwork hirer and seller in the Australian market. We have done particularly well in the civil infrastructure space, and we continue to do so. We have seen the requirement, I guess, and also the strategic benefit of growing fresh revenue streams.
The vast majority of our capital investment at the moment is going into things that we were not doing to any great degree two or three years ago. We now place an equal importance on both formwork and industrial access businesses. We are maintaining a very disciplined approach to ROI on both CapEx and M&A. Just to give you a sore flavor of the way we approach M&A, we actually have, unfortunately, to a degree, an AUD 400,000 cost in our statutory impact for the year at the moment for an M&A exercise that we terminated.
We terminated on the basis that the business that we were looking at after some months of evaluation just was not going to fit the culture that we required within Acrow and, frankly, was not going to be the right acquisition for the business. We could have plowed ahead with that regardless and put it into our stable. To be frank, it was not going to work. I'd say, you know, we are not afraid to make those kinds of decisions. Whilst we spent AUD 400,000 in the process, sometimes this is why you do due diligence. So, you know, we are still evaluating other opportunities, but we have a very disciplined approach.
An then, developing this Acrow Way across safety, people development, engineering, product development, superior customer service outcomes, and being best in breed, we'll touch on a number of those things across the course of the presentation. Now, being more specific about formwork, the strategy in our formwork business is to focus on organic growth. The first product range is geographic reach and a specific focus on cross-selling. That is still maintaining the current position that has been so successful for us in growing the national footprint. We have a strategy to increase market share in all state markets. We are still doing that to a large degree, certainly in New South Wales.
I'll talk on New South Wales a little bit later because whilst the numbers don't show an improvement over a six-month to six-month period, there certainly has been an improvement, and it will be by year-end. Capitalize on industry-specific, market-specific tailwinds. There are going to be plenty of them. Again, I'm going to talk about Queensland in the presentation because if you follow what's going on in Queensland in terms of the construction industry to any great degree, you can't not see what's ahead of that particular industry in that state. There is a significant opportunity for Acrow to capitalize on those tailwinds.
The product development program that is headed up by Matt is definitely giving us a competitive advantage, both in quality of the gear and, just as importantly, the cost of getting new equipment into Australia versus buying it from a competitor or buying it from a European or offshore supplier. We are seeing the real benefit there in getting product into the country at a cheaper price. In industrial access, we are the market leader in formwork. We want to become the market leader in industrial access services. Clear goal of the business. We want to develop a national footprint that offers backup of M&A activity and targeting major contracts.
Perdaman is a classic example of that. There are some other very sizable industrial contracts that are reasonably close to being secured. We continue to look at opportunities for growth in M&A. We have nothing to announce, and we've still got a little bit of work to do. We are an acquisitive business. We were not put off by the one that did not work, which was an industrial business. We have still got others that look like they are quite promising. We have got a really unique set of experiences and talents now across the branch network, and we have got to harness that to develop the Acrow Way of operating in industrial. Perdaman, again, is an example of leveraging the operational scale we have now got to win larger contracts.
That is the second biggest contract we won in the industrial space behind the Snowy Hydro Project. In line with what I was talking about, about the ATEC acquisition, developing our best-in-class training and development program, that means we develop our own talent in this particular area. Now, the next page is about our capital spend.
Now, we have spent more money on capital in the first six months of this year than we have in any other six-month period. We did it for a reason. It was budgeted. It was targeted. It was planned. The whole opportunity here was, firstly, we renegotiated good terms, some very favorable terms with our bank. We are very pleased with the continued support we get, which gave us the ability to bring forward our capital investment program. Andrew will talk later about what headroom is now available over there at that facility. It is front-ended because we know what is in front of us.
We absolutely know what is in front of us. This is a specific front-ended six-month capital spend. We are targeting to spend AUD 34.5 million this year, of which 28 will be growth. We are expecting next year—we are actually working back to a targeted budget, targeted spend in capital next year of AUD 20 million, down from the AUD 34.5 million this year. If you look at that pie chart, AUD 26.7 million out of AUD 30.45 million are products that we are buying that are completely complementary to our strategy as previously outlined.
Only the other AUD 1.2 million and the non-growth AUD 6.7 million are not part of opening up new channels for revenue and diversification of product and profit ranges within Acrow. We have made a deliberate choice. I am going to go into some examples, especially in Jump form. We have made some deliberate choices here about growing new businesses basically from scratch. That is what the capital program is going to be all about delivering within this year. In terms of key operational highlights, the industrial business is tremendous.
Revenue up by 119%, sales contribution up 128%. More importantly, most of that growth is organic. We will talk about that a bit later. We certainly just have a pass-through of the revenues from MI and Benchmark acquisitions. More of the revenue growth is coming out of the business organically. This is before Perdaman, as I mentioned, kicks into play. Our secured hire contracts and pipeline for the six months are significantly up. I will talk about that shortly because there is a lag effect now, again, primarily because of Queensland, which I am going to go into more detail about.
J ump forms and screens are working hand in hand. We just won our biggest ever combined Jump form and screen contract just pre-Christmas, AUD 4.5 million with Meriton on the Cypress Palms development on the Gold Coast. We are going to talk about that project specifically.
That's a massive scale operation that requires very heavy engineering input and, again, goes to the capabilities we have. In the infrastructure space, there's a lot of movement now in market projects. I'll go into more detail about. Clearly, getting that renegotiated facility with our bank has given us significant uplift in headroom and allowed us to grow at the rate we wish to. In terms of safety, the numbers are still very good. Whilst we've got a TRIFR increase and a reportable injury increase, I'll say to you that that's not surprising given that we've now got so much more labor working in the industrial access space than we previously did. We don't want to injure people. We've got a very strong focus on this particular area as you have to.
Our exposure—and we've got to be on our game because our exposure to this area has increased because of the amount of work we do in industrial access. The record, I believe, is still very good. In terms of the overall business overview and metrics and guidance, a couple of things I want to call out specifically. I'm going to go straight to the impact statutory number here because you'll look at it and go, "What the hell has happened here?" We're a victim of success in this particular line. With the MI acquisition, when we made that acquisition in the opening balance sheet for that business, we had to estimate what we believed our earn-out payment would be based on the performance we expected from it. We undercooked that by AUD 2.7 million.
That business has gone at a level that we did not anticipate when we first purchased it, which actually means now we have to expense that additional AUD 2.7 million as a one-off. That is what is in the half. There is also just under AUD 1 million worth of amortization of intangibles for both MI and Benchmark. Andrew can go into more detail about that shortly. You can see EBITDA revenue up to 25, EBITDA up by only 1%. EPS down. It is a half thing, right? When you flow this through to the full year—this is why we have added this column—you can see EPS will be up by a minimum of 2% year- on- year.
That is despite us having a lot more shares actually in action at the moment than we did at the same time last year. EBITDA will be up by 11%. EBITDA will be up by 14%. On a full-year basis, all of those key metrics were in the right direction. The other thing to point out there, obviously, is the dividend. I'm pleased to announce a 2.9% fully franked dividend for the half, which is up on the last half, and clearly heads us to a direction we hope will show a full-year dividend higher than we had the same period last year. Secured hire contracts, our key forward indicator. A very good performance of 39% up year- on- year. Pipeline also just happens to be 39%.
The absolute thing I want to point out here is that we've always had this linear relationship between winning contracts in one period and then, with the following six months, seeing that translate into actual hire revenue. This year is different. There is AUD 5.2 million worth of work in Queensland that we have won on Queensland Hospitals projects where those packages will go ahead and our revenue will be generated. We expected all that revenue to be generated by now. We are not going to see any of that this financial year. If you fast-forward that through, that is a huge uplift, a AUD 5 million uplift straight into next year's numbers.
If you put that into what our full year should have been based on the previous history, we would have a—because this is all 100% profit, this hire revenue—there would have been another AUD 5 million of EBITDA being generated this year. We believe it is a one-off, and I will go into more detail about Queensland in a second. Okay. I will now hand over to Matt to give an update on engineering.
Thanks, Steve. I'll just put that engineering first and then move on to product development. They continue our engineering team development strategy. We've successfully embedded our cadets and graduate program into the business now. That's resulted in four cadets in the last 12 months graduating into full-time engineers in the business. This program now that we've got in the business for the graduates and the cadets is developing our future engineers from the start of their career. Like Steve said, it's into the Acrow Way of doing things. This is the most important and probably the successful strategy that we've done in the past with multiple cadets now holding senior roles in the business. Our focus on innovation continues as it's key to delivering the best solutions to our clients.
Our internal testing facility, ISO accreditation, the internal product development team, ensuring we're industry-leading standards, and most importantly, our systems are tailored to the Australian market as well, which is critical. We now have 57 engineers and designers. A large portion of those engineers and designers are client-facing now. We've got a nationwide focus on that. We've got guys on the ground in each of our markets available for meetings, for example. Most of our expertise now in the growth in the engineering team is in areas like the Jump forms, screens, and industrial access. Strengthening our position as leaders in engineering solutions.
We're now focusing mainly on technology as well in the engineering team. It's now becoming a key differentiator of our offering as we transition from the old 2D way of doing things to 3D Inventor. By the end of FY2025, the majority of our designs will be in 3D, enhancing our accuracy and efficiency. Our designs are now exceeding our client's expectations by providing value and opportunity for us to charge for these resources now. In this space, it's typically been treated as an engineering function as a free service to a company to hire.
Doing the 3D designs is further automating the materials list and advanced path detection. It's giving more seamless installs on-site, but it's reducing our delivery times and improving our delivery of the projects. As we move now to the product development side of the business, as I said before, there are five key strategies here in the internal product development team. Ensuring a sustainable return on investment year- on- year in our products. We want to own our intellectual property and control the supply chain. Solve industry challenges, and these are mainly local challenges. Making products that suit the Australian market, focusing on multi-use products to improve our overall utilization. Having products that can be used in different applications and enhancing our cross-selling opportunities by the Jump forms and screens, for example.
We've successfully developed and implemented solutions like the bridge brackets, modular stairs, the PowerShore 150, Acrow Deck Soldier System that we've spoken about before. These products have strengthened our position in the market by providing safer, more efficient, and scalable solutions. We're now in the—as we're now progressing to the second half of FY2025, our focus has shifted onto things like our Uni-Ring that Steve mentioned before and our loading platforms. The Uni-Ring, in particular, is a scaffold product, and it's been in our development pipeline for about four years now.
We have taken our time now to complete and basically develop a comprehensive product and meet the requirements of our tier-one clients in this space, in this industrial space. This has been a key thing for us on the Perdaman project. We have 80 containers of this material now arriving over the next couple of months, all being sold onto the Western Australia Perdaman project. As we look forward into FY25—look beyond FY25, we are actively working on new solutions like our Column Climber, which you will see at the back when we talk about the Meriton project.
We are still being day-built on that project in the Gold Coast later half of this year. We are looking at, as we have mentioned before, ground-shoring solutions for deep excavations and that is in the building and infrastructure space. Our product development pipeline is not just about introducing new products. There's an emphasis on integrated solutions of our new products, so Jump forms, screens, Acrow DEX loading platforms, all cross-selling synergies that strengthen our position as a one-stop supplier. Thanks, Steve.
Clear now. Okay. I'll now walk through the segmental breakdown of the different divisions' results for the first time. Firstly, in the overall business, as you can see, page 21 of the Crowther, AUD 126 million in revenue up from AUD 101 million. Absolute points I want to make here are around the mix and the mixture you are going to see on an ongoing basis between formwork and industrial access in the business. You can see a contribution margin of—you see the deterioration of 7.5%, but it is absolutely 100% a factor of how well we have done in the industrial to grow that business.
Just a couple of examples here. The contribution margin in formwork is 72% because the majority of that is hire with some sales. The contribution margin in industrial access is 39%, which is a combination of some hire, a lot of labor, and some sales. Obviously, as there's a shift in more revenue coming out of industrial, that number's going to change. What I would suggest to people if they want to do the exercise is to compare our 39% margin in industrial access to some other companies that play in that sort of labor provision space.
They're not necessarily direct competitors with Acrow, but that 39% is a superior number to, I think, just about anybody else I've seen who operates in the public company space in a similar style of business. We're doing incredibly well on margin generation out of our industrial access business. The other thing that I will—and that obviously then has a flow-on effect on EBITDA margin because a lot of our increasing revenue, as you can see, AUD 34 million, is coming out of industrial. The other comment that I will just make about the result at this sort of macro level is 57% pass-through of sales contribution to EBITDA is low. We would normally be wanting 60-65% as a minimum.
By the full year, we would get back to that level. Sales contribution bridge, you can see AUD 12.7 million of the growth from 64 to 71 came out of industrial access, AUD 4.9 million in hire and AUD 7.8 million in labor provision. Specifically the formwork division, so you've got a AUD 6.6 million deterioration in revenue, half on half. I'll go into that. You'll see it on the states what that's made about. The majority of this is actually partly in Queensland. I am going to go into a lot of detail about Queensland. We do sell product.
You might sell product in one half, and then you're not in the next half. For example, in New South Wales, there was an AUD 3.7 million product sale in the first half of the previous financial year that did not get replicated this year. Now, in the second half, we have an AUD 5 million product sale in New South Wales that is already locked in that will be in that half of this year. That did not happen in the last half of that year. That can swing stuff quite dramatically in this area, okay? Now, I am going to go into this detail about some states.
You look at Queensland. Queensland dropped by AUD 2 million half on half. AUD 4 million of that was in products that we bought specifically for what was going to be the Queensland Hospitals sort of surge that did not happen yet. We should have been AUD 5 million higher than that number on work that we'd secured that should have started and should have generated revenue in that half. You won't see it in this financial year now, and I'm about to give you detail of why, but that will flow through into the following years. New South Wales is only because of that one-off sale.
The actual New South Wales formwork business on a day-to-day basis now and by the end of the financial year is performing at a far better level than it was over the last couple of years and will show significant growth. South Australia, likewise, one sale of AUD 1 million. We don't get a lot of the equipment sales in SA. We had one for AUD 1 million in the half that year. Other than that, SA was flat. WA was flat. Victoria was flat. Victoria being flat was actually a very good result given that we were cycling off a couple of the larger infrastructure projects in West Gate and CYP and primarily replacing them with North East Link.
Queensland. It's our biggest market, biggest revenue base, and also we've got 65%-70% market share. There are some things going on in Queensland that if you follow the press, you would know about, but if you don't, you would be surprised by it. Firstly, you've got the Olympic review. The new state government comes in. They're reassessing all of the Olympic plans. They are announcing on the 25th of March what their plan is for Olympic infrastructure, venues, etc., venues and associated infrastructure. That's significantly delayed from what it should have been and puts the program back quite a bit.
The end result out of all of that will be a significant uplift in work in Queensland that will be kicking in from the next financial year. The second one is a very interesting one. I will go down the politics of this. The previous state government had what they call best practice in construction. Paraphrasing best practice in construction, it meant that you could not, on any state government-funded contract, you had to use CFMEU labor rights and a range of other things. That is the long and the short of it. The new government has come in and said—that was adding probably 25% at least to the cost of projects being funded by the Queensland State Government.
The new government's come in and said, "We're not doing that anymore." Any government project that had not already been let is being retendered, and the tenderers are being advised that they don't have to use best practice in construction rates. The cost of these new projects to the state government and taxpayer of Queensland will be significantly reduced. That doesn't directly impact us except for project delays, but we're not providing labor on these projects. We're providing equipment. Our equipment hire contracts remain in place when these projects start, but with a significantly reduced labor cost for the builder and the formworkers, etc.
The third one is the capacity expansion review. The AUD 10 billion that Queensland has forecast to spend on hospitals will now need to be spent on a smaller group of hospitals. Now, that's delayed, again, in line with best practice in construction. A range of these projects is getting cranky. Now, the what-if for us is, as I've outlined there and I've mentioned earlier, there's AUD 5.2 million worth of packages there we haven't got any revenue from. That revenue will kick in, and it will kick in in the next financial year. We won't see it this year, but that's just an automatic uplift in EBITDA for us next year. The last one is around civil infrastructure. Whilst there's not as much delay in civil infrastructure, there is also a delay.
There's some projects there that, again, we wouldn't be expecting to see revenue on now that are only now starting to get met, and we'll kick it next year. The other thing that's not mentioned here is in the commercial sector. Now, the biggest commercial multi-rise project in Queensland is the Dexus Waterfront project being built by John Holland. That was supposed to start 18 months ago. Hasn't done anything yet. We are now getting phone calls from the suppliers asking us to start not just quoting them but providing equipment to them on that project into the next financial year. That could also, just on that one project, be an uplift of AUD 3 million-AUD 5 million-AUD 6 million of revenue for us next year.
Finally, that project, which is not government-funded but has been significantly delayed, is going to get cranky. Those are my three projects. The good additions there are Sydney Metro West. We've got some great packages on some of the stations being built for the Sydney Metro West program. Cross River Rail's still going. West Gate's dropping back a bit. Snowy Hydro. This is from the formwork perspective in its infancy. Coomera Connector, stage one, almost complete. Stage two, starting in a few months, near stage three. Metro Tunnel, just about complete. North East Link, only just now kicking in. The Kidston Hydro project in Queensland, only also now just kicking in.
I want to talk about our Jump form business. You can see that on the previous pages, the biggest spend in capital is in Jump forms. This is because we are a victim of what is a raging success in getting this division cranking. We have now won 23 projects since we launched. We have got AUD 8 million of committed revenue this year, but we will get that up to AUD 11.5 million by the end of the financial year. Eight of these projects include supplying screens. This month alone, we have won four new projects. We have been going for three years and won 23. In the month of February, we have won four by itself.
You can see the capital program here going from AUD 5.1 million in 2023 when we started, to AUD 15 million, to AUD 29 million by the end of this year, and then by the end of next year when we see the thing capping out at what we think the market capability is at AUD 41 million. What needs to be understood here is we have made a conscious decision to grow this business organically. We did not go and buy someone; we did not even know what someone would buy. We have made a conscious decision to make it to organically grow a whole new business unit from the ground up. That requires capital. It requires people. It requires you to convince customers to use your system.
It is now being a—I would classify it as an incredible success story. By the end of 2027, we expect to have an AUD 15 million EBITDA on the AUD 41 million investment, and then we are probably at a level where we can keep going. Great cross-selling opportunities with screens and Acrow, they are proving successful. Huge pipeline of work. Really importantly, I mean, we have attracted some of the best Jump form people in the industry into working for Acrow. Our Divisional General Manager, who is based in Perth, was the previous State Manager of the biggest Jump form supplier in Western Australia. Our East Coast, basically Construction Manager for our Jump form business, was the 2IC previously in the biggest Jump form provider on the East Coast.
Our Victorian business development and operational focus guy in Victoria, who's only just started with us recently, was the previous 2IC for one of the other major national suppliers of Jump form systems. We're getting the right talent. This has been a critical part of our strategy, and it's going incredibly well. You can see that it's capital intensive, and then it gets to a point where we stop because we've got what we believe our market share will be, and we'll be an ongoing business. Moving on to industrial access. Obviously, the success story of the business in this six months: up 109% in revenue, up 128% in contribution margin.
The key factor here is you can see there's a full year pass-through of additional revenue from MI at AUD 13.4 million and Benchmark of AUD 4 million. The majority, or just under 50% of the growth in our sales contribution margin, revenue, sorry, in revenue, has come out of organic growth. That is organic growth generated by the existing Acrow business and additional growth that we have been generating to what the MI and Benchmark businesses traditionally did. We are making massive inroads now into this particular part of the industry.
I would say, again, this is before Perth. Perth has started to kick in some revenue in the second half this year, but the vast majority will be sitting in future financial years. There are some other significant contracts pending. M&A features strongly in this business. The one we did not go ahead with was in this space. There are a couple we are evaluating at the moment. They are in this space. It is now a national business. If you go to the next page, 29. We've got four branches in Queensland. We've got a now-established branch in Karratha. We've got operations across all of the country except the Northern Territory. We've got contracts in every state, Tasmania included, in this space except the Northern Territory.
It's a blue-chip customer base. It's recurring revenue. We really like it. We seem to be getting very well regarded by the customer base here, and it's going to continue to grow. Marketing contracts in this particular area, some of the biggest industrial customers and projects in the country: Snowy Hydro, Kidston Hydro, Perdaman Urea Plant, the Ampol Refinery Upgrade in Queensland. Ongoing contracts with the Visy Tumut , New South Wales, Paper Mill, Origin Energy in Queensland, Hay Point, which is the BMA coal loader in Mackay, and Sun Metals, which is a zinc refinery south of Townsville. Some of these are top four construction-based projects.
The bottom four are all ongoing industrial maintenance plants. Following just on this point, commercial scaffold, there is a reduction that was always going to be. It is now only 7% of our overall revenue. I do not fret about this thing. One year it will do AUD 11 million of sales contribution. One year it will do 16 or 17. It is going to shift around with what the activity is like. Those are people and culture. Matt spoke about cadetships and grad programs. Vital part of what we do these days. Those are learning and development. It is more broad than just cadetship. Basically, every senior manager in Acrow is getting some external assistance in terms of developing their own capabilities as a senior manager.
have now got a very strong sales training module in-house that all of our sales guys, whether they be new, recent, auditioned, or long-standing, are getting upgrades in their training through the sales development program. The third one is about the training facility. I have mentioned the acquisition of ATEC. We have now got that business. It is currently based in Southeast Queensland. However, we will have a Mackay part of that business end of March, early April.
It is absolutely significant to us in being able to make sure that we can breed our own guys and girls in the scaffolding space that get trained the way we want them trained, get accredited the way we want them accredited because it is such a large part of what we do, and our customers insist on absolute quality in this area. Okay. Over to you, Andrew, on financials.
Great. Thanks, Steve. Steve's already gone through the EBITDA, up to 11% from 35- 39. Now, below that, depreciation increased 17%, up by AUD 1.7 million. Now, that was brought about by the last year's CapEx annualized and also the elevated CapEx in these six months, plus, of course, the acquisition of MI Benchmark that fought their own year. Now, below that, you'll see that in this period, we had quite a bit of FX loss. So AUD 646,000 of FX loss, which was about a AUD 1 million swing from last year. As you can imagine, that was a 10% swing in. We buy most of our overseas gear in US dollars. That was a 10% swing for us.
That, funnily enough, will swing around in the next six months, as already happened. Below that, tax, as we've discussed before, we're now on a 30% tax payable entity. The days of tax loss benefit in the profit are gone. That gets us down to—oh, sorry. Interest increased by 53%. Now, interest—we'll get onto the debt in a second. Our debt increased from AUD 52.6 million. Our average debt, AUD 52.6 million to AUD 80.5 million. So about 50%. Also, our rate went up approximately by 0.53% as well. That's the increase in interest. We get to our NPAT underlying, which was relatively—or up by 1%, relatively flat.
From that NPAT underlying, we get EPS, which was a reduction of 8% from 5.87 to 5.38. That reduction is all because of the annualized shares on issue that were really based from the share issues from last year. That was a 10% increase in shares on issue. That's the reason for that reduction in EPS. Steve's already talked about how we're pretty confident that that's going to increase in the second half. Now, below our NPAT underlying, we've got significant items. AUD 2 million in significant items, down from last year. AUD 400,000 of that was because of the acquisition we decided not to go ahead with. We've got some depot moves in that. We've bought MI and Benchmark systems over to our systems, which we had to do.
We're also starting an ERP discovery or a new system discovery that's—we're going through that process now. We'll talk more about that in the year end. Below that, amortization of intangibles. When we acquired MI and Benchmark, one of the things you have to do is try to identify intangible assets, not goodwill. We identified customer contracts and, in the case of MI, brand. I s about AUD 17 million or AUD 18 million of that, and we will be amortizing that over a period of 10 years. Annualized, that is about AUD 1.7 million per year that will be ongoing. Contingent considerations, Steve has already talked about this.
When we first acquired MI, we accrued about AUD 2.1 million that we expected to be paid in the first earnout. They have actually achieved full earnout, which is a great outcome of AUD 4.95 million. We had to expense the difference, which is the AUD 2.7 million. Economically, we are exactly where we would have been, but this, unfortunately, has to go through expenses. Then we had share-based payments. The other NPAT reported reduced from AUD 12 million down to AUD 9.3 million. Obviously, without that contingent consideration and without the amortization, that would have been a slight increase on last year. As Steve said, we have announced 2.9% year-to-year. Balance sheet and cash flow, next page.
Net debt, up by AUD 23 million to AUD 92 million. Steve's already mentioned we chose in the six months. We had very heavy investment in the six months. That was both from a CapEx point of view and a working capital point of view. Our CapEx has been brought forward a lot. In fact, we'll get on that in a moment. Working capital, when it came down to sales that we've made in the first half that had extended terms, and in particular, industrial service expansion that actually comes with a lot of working capital in cost. Net debt up by AUD 23.3 million. Our net debt to EBITDA is at still very comfortable levels. 1.1 at June last year, 1.3 now.
Ongoing, our forecast is that gets down to 1.2 or less. We're pretty comfortable where we are with debt levels. Cash flow from operations, AUD 23.5 million. So that's a 70% conversion rate, which is down from just over 80% in June for last year. Now, that was impacted greatly by, as I said before, negotiated sales. So our extended sales, that means that we've sold gear and we're not going to get the cash for six months. But with a lot of this, because we've had to replace a lot of this gear, that's had a bit of an impost on us.
As I said, industrial access. We have to pay our labor weekly, but we get this on average back about in six weeks. Because of the expense of industrial labor, that is quite hard. If we go down to the cash flow bridge down at the bottom, this explains how we got from AUD 68.3 million net debt in June up to AUD 91.9 million in December. If you move along, obviously, one of the big differences to the first half last year is we're now paying full cash tax. So AUD 6.6 million versus AUD 2.3 million last year. We've had a big working capital hit this year of just over AUD 8 million.
In particular, the growth CapEx, the growth and acquisition CapEx of about just over AUD 19 million, plus the MI actual cash payment for the earnout about AUD 4 million. Call it AUD 24 million of that. The earnout for MI will not be occurring again in the next six months. It will next year, but not in the next six months. Our CapEx for the following six months is around AUD 11 million. There automatically, we go from AUD 24 million down to AUD 11 million of growth in the second half. Moving over to the capital expenditure.
In the first half, as Steve said, we brought forward most of the CapEx and planned this. This was a planned thing of AUD 23.5 million, not including ex-hire. Most of that was growth of AUD 9.3 million with stay in business of AUD 4.2 million. Now, the vast majority of that growth is in areas where we're trying to grow the business, new revenue sources, jump form, plus screens, and any particular industrial access equipment. Total budget, importantly, you'll see in the graph we've got there, the total budget of the spend we're forecasting for four years is AUD 34.5 million. That's another AUD 11 million for six months versus AUD 23.5 million for the first six. We have an investment hurdle of 40%. We've had that for years.
Because we're starting to move into the jump form and the Ring lock area, we've had to take a bit of a haircut on this. Now, it's important with Ring lock, when we do these investment hurdles, we're only looking at hire. We're not looking at any other ancillary revenue or profit items. With Ring lock in industrial access, we don't take into account all the profit we're making from hire here. It's just a little bit.
All the profit on labor.
Sorry, on labor. Sorry. On the profit on labor. So we're about 42% at the moment for the first six months. It is higher than that when you bring in labor without a doubt. Moving over to funding and liquidity. As we saw before, we're currently at drawn-down debt, AUD 95.1 million. We have headroom of AUD 54.1 million at the end of December, including an AUD 31 million acquisition facility. Now, we've got this specifically. If it was appropriate, we would fund any acquisitions we did through debt rather than raising equity.
Our banking partner, Westpac, has been a very, very close partner with us, and we appreciate that. That will continue on. From a funding and liquidity point of view, we're very well within banking governance, and we're very comfortable from a debt point of view.
Thanks, Andrew. Just wrapping up on the debt also. Firstly, we've got the structured activity forecast page. It shows still that every state is expecting to have an uplift in activity. It's showing that most sectors are having an uplift. The one thing that we've seen some numbers recently, we've tried to verify them, but they came out of a Queensland industry group, and it sounds about right from what we understand. The total value of commencements in the total construction industry in Queensland in the last quarter, or say quarter two this financial year, was AUD 5 billion.
The current forecast for construction commencements in the total industry in Queensland for quarter one next financial year is AUD 25 billion, a five-time uplift. Now, obviously, that's got a lot of Olympic game work in it, I would assume, to get to that number. It just gives you a flavor. This is ahead. This is absolutely going to be ahead of everybody who's operating in the Queensland construction industry, and we are a major player, certainly the biggest player in the formwork area of Queensland in this space.
It's going to happen. We can't not. We've got Olympic Games we're building. We've got programs around hospitals that have sort of been half let. We know what's ahead of us in this particular space in the next couple of years. In terms of major projects that are kicking in, there's a range there. I won't go through them in detail. North East Link is already proving to be very successful for us and will continue to be. Torrens to Darlington is a close watch for us. It hasn't commenced yet. Obviously, the Brisbane-based projects. I want to give a couple of examples of things that we've done recently that are going to add significant profit to the business in the next period of time.
This Meriton Gold Coast Towers project on page 42, it's a very unique jumpf orm project in that we're jumping the size of the building, not just the core of the building. It's four towers, two projects that mirror the building there. We've got screens on all four of them, and now we've got the jumps on tower two of Cypress. In general, the overall revenue for us over these four towers that mirror the building is sort of AUD 8 million-AUD 9 million, plus other—and that's just in jump forms and screens—plus other things that we know that we're going to be able to do as the projects get kicking in.
This is a really critical strategic thing for us to get the Meriton business and their former subcontractors using our screens and jump forms, which they really haven't done to a large degree before, especially not in the jump form space. It's strategically really important. The second one is Perdaman. I spoke a lot about this. This is what it's actually all about. The thing's moving. We've now got—I think we've got 10 guys on site at the moment. That number will go to 40 or 50 and maybe double that depending on who you talk to. It is the second largest industrial access contract we've won, and that gives you some flavor around this.
Vitally important to get us into Western Australia and establishing a branch. This gives us an opportunity to grow other industrial contracts off the back of winning the Perdaman contract. That alludes us to our guidance. The medium-term outlook is ridiculously strong, really, both in terms of contracts won and the pipeline. Industrial is going to keep growing. We will see the commencement of Perdaman. We are going to see very, very strong growth in the second half in jump forms. We will take it then into the new financial year. New channels for revenue are being opened up in AcrowDeck and screens and other.
AcrowDeck is an example. At sort of Christmas time, our total utilization of our AcrowDeck fleet was like 20%. Within the next, by the end of April, that is going to be 100%. That is a significant uplift. In terms of the guidance, revenue and EBITDA guidance remain consistent with what we stated at our AGM, 27% uplift in revenue, 40% in EBITDA. We've now added NPAT and EPS guidance to show that we'll be upping both those categories again across the course of this financial year. That's it for me for the moment. I'll hand back to the moderator, and then we'll take any questions that the attendees have.
Thank you. If you wish to ask a question, please press star, then one on your telephone, and wait for your name to be announced. To cancel your request, please press star, then two. If you're on a speakerphone, please pick up the handset to ask a question. The first question comes from John Stanford Hynd with Petra. Please go ahead.
Good morning, Steve, Andrew, and Matt. Can you hear me?
Yep, John, how are you, mate?
Yep. Hey, great. I'm well, thanks. Congratulations on the result. Obviously, a volatile period. I just wanted to get a little bit more color on just the guidance firstly. There's obviously delays to formwork, which were out of your hand during the period. Will there be any catch-up? Can you clarify, is there any catch-up in the second half of this period, or does it all roll through into FY 2026? I guess what I'm asking is, in that guidance you've given us, does that exclude any of those delays that happened in this half?
Yeah, it does. That's what, over AUD 5 million worth of profit, John, that should have been generated this financial year, and probably most of it in the first half. That we're not going to see that AUD 5 million—we're not going to see that AUD 5 million this financial year of contracts that we already have won. We have already factored that in, and we're not factoring any of that AUD 5 million coming forward. That will be an FY2026 uplift for us.
Right. I guess, moving that discussion forward one half, was there anything that was baked into your guidance in second half 2025 that's been delayed and is pushing out as well?
What's happened effectively is we expected to get a lot of that. When we did our guidance, we probably thought we'd get some of that revenue. Subsequent to that, we won Perdaman, and we're guessing at the moment of what we think the Perdaman profit contribution will be for this year. We won a very large jump form contract where some of that revenue you'll see only a proportion of it. Those two things enabled us to keep our guidance at the same level despite the further delays in Queensland of things that we will see next year.
Yeah, got it. That's very helpful. You touched on industrial services with the Perdaman project. It's good to see that contribution rolling through, and we're sort of getting an understanding of the shape and size it will look like. In terms of contracts moving forward, it sounds like you are close to some others. Can you give some color on perhaps are we going to be seeing more AUD 40 million projects? Is that the typical size you guys are now going for, or is it like an AUD 5 million-AUD 40 million range?
Look, 40 is unusual. It's not unprecedented. Snowy was the first one that was over that level. We've got some other opportunities that are not quite at that level, but they're more than five, right? We've got a couple that are pushing towards success that would be, if we get there, they'd be very important for further growth. Some of the things we're also working on, which is almost just as important, is getting long-term security over some of the very good contracts we've already got, right? I mean, in this space, that's just important, right, to get existing contracts to be renewed. We've got a few opportunities in new contracts with Crown and also in successfully renegotiating existing contracts that give us more long-term security again.
Got it. With those contracts that you're looking at and you're looking at preserving, how does the pull-through rate for hire work with those labor contracts? Is it going to be a greater percentage pull-through or a lesser percentage pull-through?
They are all different. Some contracts are very equipment-heavy, and some are very small amounts of equipment with lots of labor.
Got it. Okay.
Yeah, you can't really apply a rule to that, mate, and say, "Okay, Acrow just won a AUD 20 million contract, and it's going to have X % of hire, X % of labor." Snowy is an example. There's almost no hire at Snowy, right? Snowy is all labor and then some equipment sales. No hire.
Got it. Probably just use the % that we've got now.
Yeah, mate. I mean, Perdaman, for example, at the moment, Perdaman will eventually have some hire, but Perdaman in its first period is going to be basically all labor and sales.
Yeah. Got it. It's sort of taking that shape a little bit now. You can see, I think Andrew's sort of alluding to that behind you. That's sort of what it's looking like. One last one from me. Overhead, you did really well there in terms of the yard expenses, etc. I'm just trying to understand. You did take on a lot of labor this period with your acquisitions. That increase in labor, which was the only line that increased, just to give you a good picture of how your cost control went, the underlying labor, so backing out what was added during the half, what did that increase on a year-on-year basis do?
I don't have that number really available, but clearly those two acquisitions, full year pull-through, had an impact. You've got branch managers, and you've got administration managers, and you've got staffing requirements. I mean, there are some additional roles the business has added as it's grown, especially in the industrial space. Because that's a big—if you think you're doubling the business, and it's not just the existing branch structures that both MI and Benchmark had, it's supporting a far bigger business now with organic growth from it. We have had to add safety resources, a couple of engineering resources. I mean, there's things now—that's now an AUD 130 million-AUD 150 million business. We have had to gear up from a staffing perspective in that space. That's the main area, mate.
Yeah. Got it. Okay. Thanks, guys. Let someone else have a go and jump back in the queue.
The next question comes from Philip Pepe with Shaw & Partners. Please go ahead.
Thanks for taking the question, John. That was 105% of my question, so I'll scramble for another one. Look, good result. I thought that guidance in line, so well done. Just elaborating on—this is slide 36, just clarifying the working capital position or the working capital grade. I think you called out AUD 8 million. Are these ratios a new norm because of the acquisitions, or is it a bit higher because of the delayed revenue and future growth, or do we just assume?
You're talking about working capital or cash flow from revenue?
No, working capital. Working capital overall is okay, but one thing's for sure, our receivables were elevated from the previous period because of some negotiated sales with you or extended sales with you, plus also the expansion of industrial access. I wouldn't call it a new norm, but one thing we won't be having is a big impost in the next six months of working capital like we did this six months. It may retain around that, but we expect of those negotiated sales and other things that have come through, we expect probably about AUD 10 million of that will come in.
We probably should describe that, Andrew, because I don't think people would understand that. In some cases, when we're selling product, we need to give extended terms to sell, like maybe six to 12 month terms to pay the sale off.
That is in some cases because our European competitors do exactly that. If we do not do that, then we do not get the opportunity to get people to use our systems. In this particular half, there are a couple of quite large sales that we have just given a specific, "You can take four months to pay that deal kind of deal," right? That number was, I think, around AUD 13 million at the half. We are probably down to like five or six by the full year, Andrew.
Yeah, that is right. Yeah, correct. That percentage of working capital sales, we are probably relatively comfortable with that.
Yeah, got it. Appreciate the color. Thank you.
The next question comes from Alex Lu with Morgans Financial. Please go ahead.
Good morning, guys.
Good morning.
How are you?
Hope you guys are well. Tell us about bad debt, please. It looks like you did not have to expense any bad debt during the period, and obviously, it was a bit of an issue last year. Can you just talk about, I guess, your confidence in the systems and processes that you have in place now and your ability to, I guess, not have any more bad debt going forward?
Oh, I cannot give you any idea. You are never going to have no bad debt.
Alex, I am a finance guy. I cannot give you that. Look, it is managed well. The debt has not deteriorated whatsoever. When we put it through the model, I mean, part of this is always luck that we could have a big customer that goes. That is why we say we cannot say that.
However, we are forecasting bad debts in the second six months. We were just lucky and it was good management as well that we did not have any in this period. We do have a forecast, and it will not be.
It is in the guidance, mate. It is in the bad debt number in the guidance. The one thing I think I will add, Andrew, too, is that the nature of the book has changed quite dramatically with the industrial stuff now, such a prevalent part of it, right?
Yeah, that is right. Yeah, we will not have a bad one. It would be very bad for the country if we had an industrial access bad debt.
Okay. Going forward, I think it was, if I'm remembering, it might have been about 1% of
Yeah
revenue last year. I guess going forward, with the growth in the industrial access business, it should be less than 1%.
Yeah. Look, I don't—it'd be a bit disappointing if we had 1% of the 12-month revenue in the bad debt in the second six months. Yeah.
Okay. Fair enough. That makes sense. Just one second, one on the pipeline, please. Up 39% versus last year. Yeah, where are you currently seeing the opportunities at the moment?
It's in formwork, mate. The formwork pipeline is up 31% of that. 31% by itself. Certainly, as we grow our industrial access business, there's a bigger pipeline there. If you look at that, we're not going to lose our focus on our meat and potatoes business, which is formwork. That's what Acrow and we've got to do today. We've got as much focus on that as we've always had, and we've got a pipeline that's 30% bigger than it was in the same period last year.
A lot of that is jump form, and a lot of that is actually yet to go into the—so, for example, all the Queensland Olympic stuff and a lot of the hospital stuff is not in our pipeline numbers because the tenders haven't been let. I expect to see a, like, mate, you'd think a very big increase once we actually know what the projects are in terms of Olympics and a lot of the hospital stuff that we haven't already done.
Correct. Correct.
Yeah.
Okay. You're pretty confident that that should continue to grow going into FY 2026?
Yeah. As soon as that Olympics game stuff gets released, and then they look at it and get some water, and they're starting to go out with tenders, that's going to see a very, very large increase in the pipeline.
Okay. Good to hear. Yeah, that's all from me. Thank you.
The next question comes from Rupesh Kurai, private investor. Please go ahead. The next question comes from Rupesh Kurai, private investor. Please go ahead. Mr. Kurai, your line is open.
If Mr. Kurai's not there a second, should we move on? Yeah. Hello? Can you hear us?
Hello. Lost the connection.
No, I'm still on.
Mr. Helem, can you hear us?
Yep.
You can go ahead.
Hi, Steve. Could you please provide more details about the ATEC acquisition, including the total cost valuation and the revenue and net profit it is currently generating? Thank you.
Yeah. We paid AUD 1.1 million. I think about 350 of that is deferred, Andrew, so 800, I think, up down, roughly the numbers. Look, it needs to be understood that this is not a business that we—this is not a business that we bought to make a big return on investment on. It has good revenue. It is probably going to generate AUD 300,000-AUD 400,000 of revenue at a minimum. We bought it because they have the government accreditation as a registered training organization. That would have been quite difficult. Typical would have been a long process for us to get that accreditation. Of course, the guy that owns that business is a very, very, very good trainer of scaffolders.
Between what he's already got in Southeast Queensland and then what we have already committed to building in Mackay and are very close to, it almost needs to be treated to some degree as there will be a portion of operating costs. It will generate a relatively smallish profit, but it gives us the opportunity to get absolutely cranking with something that you have to think about more in terms of our ability to get more staff in the scaffolding space as we continue to grow that industrial area. We are going to need—we need more and more people all the time. Perdaman is an example.
We started that from scratch, and we are going to need between 50 and 100 people on a Perdaman project over a 12-month period. It is not really—we have not done it on the terms of, "It is going to make $500,000 profit." We have done it on the basis that it gets us into this training space, which is effectively a cost of running that industrial business to a large degree. It does have revenue that they have already got in-house, which is a nice plus for us.
Right. Okay. Cool. That's very helpful. Thanks, Steve.
The next question comes from Rupesh Kurai, private investor. Please go ahead.
Please. Five seconds. Two seconds and one second.
Mr. Kurai, we can hear you. Mr. Kurai, can you hear us? The next question comes from Rachel Paiva at Ord Minnett. Please go ahead.
Morning, Steve and Andrew. Thanks for taking my questions. Just a couple from me. Just regarding revenue growth in FY 2026, I know you've talked about it. Maybe if we start with formwork, you've talked about the AUD 5 million additional revenue you're expecting to occur at the start of FY 2026. Just wondering if you can give us an idea in terms of the first half 2025, and are there any large contracts rolling off? When we look into FY 2026, should we use the current base of formwork, the revenue being around about that AUD 55 million revenue, simply look to add on AUD 5 million or so? How should that revenue step up in the FY 2026 year?
Haven't done our budget yet, Rachel, but I can tell you that in terms of what's going on in the industry, you've got—that's just AUD 5 million on contracts we've already won in Queensland. That's just added on to what we've already got today. We should have been seeing that this year. You have all the other uplifts that are anticipated happening in Queensland over the course of the next 12 to 18 months. Our jump form business, which is in the formwork area, is going to grow its revenue base.
With the contracts that we've won as they roll through, it will be growing next year. Our screens business is winning work now that will be generating revenue towards the end of this year and next year. That will be growing. Right? I can't give you a number of what I think the formwork revenue number is going to be next year. It's going to be up.
Yep. Perfect. Thank you for that. A similar line of questioning just on the industrial access division. As you noted, the organic growth is particularly strong. I can see in the presentation you have outlined 58% organic top-line growth for the division. Can you just talk to us about the organic growth prospects into FY 2026? Obviously, we gained a lot of momentum in that division. How should we be looking at that into FY 2026?
You have got Perdaman for starters, Rachel. There is going to be some revenue for Perdaman this half, but there will be significantly more revenue for Perdaman into the next year. I would think an absentee of AUD 6 million to 7 million to 8 million more revenue coming from Perdaman next year than this year. We have got one other large contract that we are hoping to win, which we are very confident we are winning, that will generate revenue growth next year. That is in the sort of AUD 25 million over a couple of years.
There are other just opportunities. Snowy is still nowhere near its peak, but anyone who is following the Snowy story will see delay after delay. Now there was some other issue with TBM stuff overnight. We have nowhere near the amount of labor on Snowy at the moment that we will finish up with. Yeah, I mean, we're heading towards this financial year in our industrial business, sort of a circle of AUD 130 million of revenue. We've got to be heading towards AUD 150 million plus in the following year.
Perfect. Thank you. Just one last question just regarding guidance. If I use your half-year results and then the midpoint of the full-year guidance, it implies at the EBITDA level a slight bit of margin accretion. Just wanted to ask you on that basis how you're looking at the split of revenue and profits. Should we expect a similar mix relative to the first half and the second half, or any comments regarding mixing to the second half?
No, I think a bigger contribution from formwork, but a lot of it will be in sales. The sales generate 25%-30% margins rather than higher. No, I think it's quite consistent, mate. I think jump form is going to be significantly up in the second half compared to the first half. That could be good from a margin perspective. Yeah, I mean, I honestly haven't done the maths to see what that means in terms of, I just know that we've done a very detailed forecast now by branch of what we expect our branch results to be between now and the end of June. That's what pumps out the revenue and the EBITDA number. I haven't actually gone into the detail of what percentage that means across different divisions.
No problem at all. Thank you. That's it for me.
There are no further questions at this time. I'll now hand it back to Mr. Boland for closing remarks. Please go ahead.
Thank you. And thanks, everybody, for taking the time to hear our results today. Again, very pleased with how the business is going. We know what's ahead of us. I think we've got some really good things going on in terms of M&A opportunities as well as new contract opportunities. I expect the next six months we'll see very good improvements both in EBITDA and then in our cash conversion position over the course of this financial year. In the next year, very confident in the way we're positioning ourselves for that future growth that we know is ahead of us. Thanks for your time today, and look forward to talking to you all again in August. Thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.