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All right. So we've got the technology going. That's great. Good afternoon, everyone. My name is Jim Walker, the Chair of Austin Engineering, and it's my pleasure to welcome you to the company's 2025 annual general meeting. I'd like to introduce to you your directors. Our Chief Financial Officer, Company Secretary, Head of Sustainability, and General Counsel. First off, Sy van Dyk, who's our CEO and Managing Director. Our non-executive directors, Chris Indermaur, David Singleton, Linda O'Farrell, and Ian Stone. I'd also like to introduce our Company Secretary, Tara Wilson, who's sitting down on my left. Our Chief Financial Officer, these people are sitting in the front, David Bonomini. Head of Sustainability, Greg Rutherman, and General Counsel, Kirsten Cadle. Our Chief Operating Officer is actually overseas at the moment, but he is online.
Also sitting in the front are representatives of our company auditors, BDO, and are here and will be available to answer any questions on the financial statements and in relation to the audit. The Company Secretary has informed me that we have a quorum present. I therefore declare this annual general meeting of Austin Engineering Limited open. I'm pleased to advise that the shareholders that are not here physically are able to watch and listen to a live webcast of the meeting. This webcast will be an opportunity to view the proceedings and the presentations at the AGM and for shareholders to submit online written questions during the meeting. However, the website is provided as a convenience only and does not replace a physical AGM. Shareholders will not be able to participate in the meeting or vote via a website facility.
General logistics and the fact that people watching over the website facility are not taken to be present at the meeting, we propose to address any questions that are sent through over the webcast at the end of the meeting and once the meeting formalities are concluded. I'd like to explain the format of today's meeting. Firstly, I will give a Chair address, and then we will consider the resolutions outlined in the notice of meeting before I invite Sy van Dyk to give his Managing Director's address and open the floor for general questions and answers. Once again, good afternoon, everyone. I've already said who I am, but just for the formality, my name is Jim Walker, the Chair of Austin Engineering Limited, and it's my pleasure to welcome you to the company's 2025 annual general meeting.
I'm pleased that Austin delivered another year of financial and operational progress, and it is clear there remains significant capacity for further growth across the operations. Revenue has been strong for a number of successive years, taking us from AUD 203 million in financial year 2022 to AUD 377 million in financial year 2025. We have recorded improvements in earnings margins over the last few years as we focus more heavily on operating efficiency. We have taken our model and expanded and broken into new markets. I believe we have strong underlying business capable of further growth into the future, while delivering strong operating margins. However, we are facing significant challenges in the business as well, and that has resulted in an earnings forecast adjustment for financial year 2026. Our share price has also fallen significantly in the past six months.
This is very disappointing for us and our shareholders, many of whom have had long-term investment in the company. I have been Chair since 2016 and have been through challenging periods before with Austin. Despite this, the company has continued its growth trajectory. I see our current situation in the same light. In short, while I'm going to hand over to our CEO and Managing Director, Sy van Dyk, to step you through the issues and, importantly, the essential changes that the business is undertaking to ensure we deliver strong business into the future, I want to reiterate that we have a solid business strategy in place and a fully integrated global company with market-leading product offering. We also have a strong team in place, and I believe the right people at all levels continue to grow our business.
Xi commenced as Managing Director and CEO on the 1st of July 2025. He is deeply familiar with the business, having served on the Austin board for seven years prior. Sy has visited all of our global facilities and is already demonstrating his capabilities, including immediately addressing and overcoming the challenges in our operations. We value his experience and perspective on the business, and in my view, he is the best person to work through the current headwinds and to continue to deliver growth and shareholder returns. Our commitment to design, innovation, and sustainability continues. Our high-performance tray range reached a milestone of 500 trays operating on order. The uptake of the HPT has shown our ability to design and engineer the best-in-class products that make a significant difference to miners' productivity while meeting their requirements around limiting environmental impact.
We continue to invest in our people and offer career and training opportunities. Alongside our successful weld school in Batam, we have launched a welding school in Casper, Wyoming, with the first cohort of apprentices recently graduating. Through these schools, we are offering training and future employment opportunities while building strong foundations for Austin, navigating some competitive labor markets. In Australia, our partnership with the Kontar Foundation continues to create opportunities for young Aboriginal and Torres Strait Islander men through education and employment pathways. These initiatives, combined with our leadership programs, demonstrate our commitment to fostering strong and diverse capability workforce. On behalf of the board, I extend my thanks to our shareholders for your support and look forward to sharing our progress with you. This now brings us to the formal part of the meeting.
The items of business to be considered at this meeting have been listed in the notice of meeting. The notice of meeting has been made available to shareholders on the 7th of October 2025, and we'll take it as read. Before we consider the items of business, there are a number of procedural matters I wish to draw your attention to. In the interest of transparency and in accordance with the ASX requirements, I will call a poll on all meeting resolutions. I will discuss each of these resolutions in turn and then conduct a poll after the last resolution. Each resolution and proxy count for each resolution will be displayed on the screen when the resolution is being considered. I am holding undirected proxies in my capacity as Chair, and it is my intention to vote all such proxies in favor of all resolutions.
Any proxies directed that are not voted at the meeting will automatically default to me as Chair of the meeting, and I'm required to vote these proxies as directed. Caitlin Knott from Computershare has agreed to act as returning officer. At the completion of the poll, Computershare staff will collect your voting cards and tally the votes. The persons entitled to vote on the poll are all shareholders, representatives, and attorneys of shareholders and proxy holders who hold a green admission card. On the reverse of your admission card is your voting paper and instructions. Yellow admission cards have been issued to non-voting shareholders who are entitled to speak at the meeting but are not entitled to vote on the poll. White admission cards have been issued to visitors who are not entitled to speak at the meeting or vote on the poll.
If there is any person present who believes they are entitled to vote but has not registered, please raise your hand, and a representative of Computershare will assist you. All good. I shall now proceed with the business in order, as it is listed in the notice of meeting. Questions on any item may be raised during the consideration of that item. Please state your name when asking the question. Okay. The first item of business deals with the financial statements and reports. These have been released publicly and forwarded to the shareholders who requested them and are now laid out before the meeting. These are the financial statements and reports for the financial year ended 30th of June 2025. This is not a resolution, and no vote is required on it.
On that, I now invite questions or comments from the shareholders in relation to the financial statements and reports, and more generally about the management of the company. As I have advised, representatives from the company auditors are in attendance to answer any of your questions that you may wish directed to them in relation to the conduct of the audit or in relation to the preparation of the financial statements. Are there any questions? Okay. As there are no questions, we'll move into the second item of business. The next item of business asks shareholders to adopt the company remuneration report for the year ended 30th of June 2025. Unless there is any objection, I will take the motion as being read and refer you to the screen for details of the proxies received for this resolution.
Whilst this is a non-binding advisory vote of the shareholders, the views and comments of shareholders will certainly be taken into account by directors when further considering remuneration matters. I note that a voting exclusion applies to this resolution as set out in the notice of motion. The board recommends that the shareholders vote in favor of this resolution. As I mentioned earlier, voting on this resolution will be by way of poll and conducted after the last resolution. Are there any questions on the remuneration report?
John Ferguson's my name. Good morning to everyone. Look, I bought into Austin about three months ago, so I'm a recent entry into your share industry. I did submit a question, and you probably have that already, but I'll read the question, and then I'll tell you why I asked.
Yes, please do. Yeah. Thank you for braving and writing beforehand too. Thank you for that.
My question is, why does the board consider the company's incentive optional plan superior to its performance rights plan? The reason I ask that question is that as a small retail shareholder, I think the performance rights issue is far better aligned to my interests. I think if Mr. van Dyk is to be rewarded for his performance, I prefer to see it in terms of the health of the company. In other words, he's left the company in better health than when he came into it. I think when you have things like the earnings per share growth, etc., etc., that is tapping into the health of the company. On the other hand, leaving it solely to share price appreciation really doesn't—that's a bit like a raffle, I reckon, because Mr. van Dyk's not in control of the share price.
I think he would be in control, and I hope he would be in control of the earnings per share growth in this company. On that basis, I'm very much likely to consider that at a future time, and I'd be very interested in your answer to why you think the share option plan is a better one.
Thanks, John. I'll hand over to Linda for that one.
Thank you, John. Thank you for your really considered coming through. As you've noted, in the remuneration report, we still have a performance rights plan on the front, and a number of our executives are part of that. In 2021, shareholders approved the Austin options plan. Mr. Singleton was actually appointed as CEO. The thinking at that time was that share price growth was, in fact, the most important strategic focus of business. It was approved, and since then, has been maintained also with the Chief Operating Officer, and applied again in the hiring of Mr. van Dyk into that role. The board has seen, along with shareholders, that the options plan has aligned shareholder views and objectives along with the executive objectives. I take your point that a performance rights plan obviously has some validity as well.
My question really is, why do you consider it better?
Because we see the clarity of share price and executive performance being linked as being critical.
Okay.
Yep. I'm representing Australian shareholders today, John Campbell. Our policies generally, guidelines on remuneration, suggest that options, which have to be determined, the value of the option that they grant has to be determined by some complex formula, which defies logic in terms of looking at it. It is much simpler if you use VWAP to determine the number of share rights that would equate to the bonus that you're seeking to award the executive with. I think it's much clearer and easier for shareholders to understand if you did that. The number of options that you end up granting is quite high, and I know there's an excess side price, and I realize that the burn is also quite high too, particularly in view of today's price. The other aspects, the other aspects I'd like you to consider would be that.
50% of the short-term incentive would be better off in preferred shares in our view. Coming to criteria, as John Ferguson suggested, for the LTI holdings would also be a good idea to have an absolute criteria, such as earnings per share movement or return on capital or something like that.
Thank you for that. We hear what you say, and we'll take that on board as we go forward. Thank you. Any more questions? Okay. No more questions. I'll move to Resolution 2. The next item of business is the election of Ian Stone. Ian was appointed as Non-Executive Director on the 1st of July 2025. Details of Ian's qualifications and experience are set out in the notice of motion and the company's 2025 annual report. Unless there is an objection, I'll take the motion as being read and refer you to the screen for the details of the proxies for this resolution. The board, with Mr. Stone abstaining, recommends that the shareholders vote in favor of this resolution. Voting on this resolution will be by way of a poll and conducted after the last resolution. Are there any questions in relation to this resolution?
As there are no questions, I'll now move to Resolution 3. As this next resolution concerns me, I'll pass the chair over to Chris Indermaur.
We just wait there, mate. That's going to get you a mic. We do have people online. Thanks, Sarah.
Thank you, Jim. The next item of business is the re-election of Jim Walker. Details of Jim's qualifications and experience are set out in the notice of meeting and the company's 2025 annual report. Jim has been a non-executive director of the company since July 2016. Unless there is an objection, I'll take the motion as being read and refer you to the screen for details of the proxies received for this resolution. The board, Mr. Walker abstaining, recommends that shareholders vote in favor of the resolution. Voting on this resolution will be by way of poll and conducted after the last resolution. Are there any questions in relation to this resolution? Yes.
Right. Thank you, John Ferguson again. As with most people in the room, yesterday we were surprised by the announcement from the ASX to be up for the downgrade for next year. I guess as a small retail investor, I was a bit shocked by that because it says something about the execution of the business, and it says something about the oversight of the board, not to somehow understand what was happening until the day before the AGM. I am thinking to myself, as a small retail investor, I really, really value an independent board. I do not mean independent in just word, but in spirit. The independent board, as far as I am concerned, is a clear division between management and the board of the company.
The board is a tough-mindedness question, prepared to put the fleet of the management to the fire to sort of really get performance. I do not see anything happening, actually. I am raising it now because it is Mr. Walker, you are up for election here. I am wondering whether it is about time that the board would consider to have an external review of how this board operates. Because as a small retail investor, what I saw yesterday was pretty unpleasant, actually. Thank you.
Thanks, John. We hear what you say and understand. In other areas where I work, we do have those external reviews. It is something we'll take on board and have a look at as well. I can assure you, if you want to talk to our past CEO and our existing CEO, they do get looked at very carefully, and we do have a fair bit of debate. The members on the board, our diversity as far as backgrounds is also a good part of that in regards to the way we ask questions. We're not all from the same background. We have a diversity of backgrounds, and that's part of the diversity of the board selection as we go through. Thank you for bringing that up.
Can I just make a comment?
Yep.
Can I just answer one of the—sorry. Can I just answer one of the points that you raised there, which is the timing of the release? You'll see that if you look at ASX companies, it's very normal for them to release on the AGM date updates to performance. Sometimes good, sometimes bad, sometimes flat. It's usually seen as a point in time where you've got enough knowledge of the year going forward. You've seen enough evidence of what's happening for you to be able to give a prediction about whether things are slightly up, slightly down, or flat. I wouldn't get too kind of dismayed about that. That information could have been released yesterday or the day before. It could have been released today, as would often be the case.
I think the decision was made that when that knowledge had been synthesized and pulled together and properly analyzed, that that was the time to release, not wait for another two or three or four days until the AGM occurred. As I say, I think you'll see a lot of companies do a trading update at the AGM. That's essentially what you've seen.
That, John, that just reinforces our governance too from a point of view. We do have an obligation of disclosure, and that's why we did it on that day as well too. Yep. I'm not sharing this part, so you've got to go back to Chris if you don't mind.
Yes, sir.
Because you're voting on me, so I can't talk.
Jeff. Time in retail long enough, both companies for quite a while now. I’d like to comment on your comments. I found that the information flowing from the company has been very opaque. It’s been very intermittent, and it comes such as the update that we received yesterday was a failing, I believe, on the part of the board to release in a more timely manner the information that was released yesterday. I know this is a matter of opinion, but I’d appreciate your comment on this, as I’m sure a lot of other people feel the same way I do.
I think it's fair comment. If you can imagine, we take numbers from Chile. We take numbers from North America. We take numbers from Asia, and it gets all put together in a matrix. It's not a simple exercise. This is from the costing side, from the revenue side, from the sales side, what they see coming. As soon as that's synthesized and we know what the answer is, we have a legal and ethical requirement to put it out straight away. We don't have a timing option here. There is a legal requirement, and we follow it.
Sure. With regard to the operations in Chile, are we saying that we did not know until a few days ago how the Chile operation was running? Would that not have been known over a number of months, or is that a lack of communication between the board and the CEO and the operations in Chile? I find it is amazing that it was not known for months.
As you can imagine, there's people from the executive talking to Chile every day and looking at operations and different parts of the operations and also sales. You have to look forward to what sales are coming, what you think is going to come, what you know is going to come, what's the probability. It's not just one number which leads you to the results. The whole thing has got to be put together and seriously considered before it gets published. This is no light thing.
Thank you. Can I make a comment on that as well? Because I think it's a great question that you ask, and I don't want to prolong this too long, but I've often had this discussion with shareholders myself in the past, right, about when something's happened and shareholders say, "Why didn't you tell us about this before?" The answer I've generally given is that sometimes things happen on a moment, and the bit before is different. What's happening before is different to what happens afterwards. A mine wall collapses, a tailing dam leaks, a company goes on strike, something changing legislation, right? There's a line in the sand and there's a moment, and you can be very clear about the need to announce. What happens in a business is there's ebbing and flowing. You win an order, you lose an order.
Things go well one month. They don't go quite so well the next month. You're starting to see a deterioration in performance, but the management is saying, "Don't worry. We think that's going to come back." You're seeing this, as Chris says, in multiple locations across the organization. There comes a point when you say, "Okay, we've synthesized this. We've looked at this for long enough. We now think that it's time to make a statement." As Jim has said very clearly, we're under an obligation to announce as soon as we get to that point. There's not a line in the sand. There isn't an event that occurs that suddenly changes your outlook. If it was a major contract that you'd lost, you'd say, "We lost that contract. Tomorrow is different to yesterday," right? That's not what's happened here.
It's ebbing and flowing, and eventually, you get to a point where, well, on the balance of probability, this now looks like the outcome. Even now, you're predicting forward. We're predicting forward nine months. There are other ebbs and flows that are going to occur, some of which are good, some of which are bad, some of which are in different locations, all of which will come together to create a result at the end of that period. That's why I say to you that, yeah, I get your point. It's clear, but it's not as if we haven't talked about Chile, for example, several times in the past. There have been announcements, public announcements. We talked about it at the AGM last year, in fact, about problems, and we've seen that in public announcements before. It's not as if it's kind of completely unknown. All right?
Thanks, David. I hope that calms the feelings to some degree, although we hear what you say. Are there any other questions? If there are no more questions, I'll now move on to Resolution 4. We'll pass the chair back to Jim.
Okay. Thanks, Chris. The next item of business is the re-election of David Singleton. Details of David's qualifications, experience are set out in the notice of meeting and the company's 2025 annual report. David has been a director of the company since April 2019, initially in the role of a non-executive director before being appointed the interim Chief Executive Officer in June 2021, and then Managing Director and Chief Executive Officer in July 2021, before transitioning back to a non-executive director in July 2025. Unless there is an objection, I will take the motion as being read and refer you to the screen for the details and proxies received for this resolution. The board, Mr. Singleton abstaining, recommends that the shareholders vote in favor of this resolution. Voting on this resolution will be by way of poll and conducted after the last resolution.
Are there any questions in relation to this resolution?
Chairman, the succession of the transition of an executive to a non-executive leaves the position of the new incoming Managing Director, Chief Executive, somewhat uncomfortable in my sort of humble opinion. Can you explain why it's a good idea, given that the incoming CEO has to make a whole lot of decisions and review what's happened in the past and to have that task with the oversight of the previous CEO makes somewhat awkward, I thought.
Happy you asked the question. I've got a little smile on my face because I can assure you this was debated very, very rigidly and at depth, all right? We understand your position on it and also understand AICD's position on it as well too. We thought in this case, and also with a fair bit of discussion with both David and Sai in regards to the understanding of how this was to progress, having David on the board to work with Sai in the handover and get the continuity far outweighed the other sides that you've spoken about before. David and I did speak quite openly. There's going to be some periods in our board meetings where he may feel uncomfortable, all right? Because that's nature of business.
David's been mad enough to say, "I can handle that." Sai, having worked with Sai for a number of years, I can assure you he won't go wandering with Sai. He won't hold back if he has to say things. That is a relation of also the way the board operates. We're happy to be quite open about these things and have those discussions and be mature about it. Okay. If there are no more questions, I'll now move to resolution number five. The next item of business is the re-election of Linda O'Farrell. Details of Linda's qualifications and experience are set out in the notice of meeting and the company's 2025 annual report. Linda has been a director of the company since 2022.
Unless there is an objection, I'll take this motion as being read and refer you to the screen for the details of the proxies received for this resolution. The board, Linda O'Farrell abstaining, recommends that the shareholders vote in favor of this resolution. Voting on this resolution will be by way of poll and conducted after the last resolution. Are there any questions in relation to this resolution? I nearly thought there was someone down the back there for a minute. It's okay. Okay. If there are no more questions, I'll now move to resolution number six. This item of business seeks approval to issue up to 3,673,581 unlisted options to Mr. van Dyk or his nominee under the company's option plan. The board, Mr. van Dyk abstaining, recommends that the shareholders vote in favor of this resolution.
Voting on this resolution will be by way of poll and conducted after the last resolution. Are there any questions in relation to this resolution? Yeah, John.
This is a question I submitted.
Yeah, that's fine.
I'll just read the question first, and I'll give you the question. Why did the board not use the ubiquitous market value approach in computing the number of incentive options awarded to Mr. van Dyk? That's the question. My thinking about it is that there seem to be two broad ways of determining the number of options that are awarded when you've got a dollar sum there. One is the market value approach. Clean, honest, and it's often used by the user of the VWAP. Probably quite an average price. I did the calculation in five minutes to see what the VWAP was on the day of the preceding days when the letter was written. And lo and behold, it comes out at AUD 0.30. And I divide that AUD 0.30 into AUD 300,000, and I come up with 1 million options. Now, that's a lot different from the 3,673,581 options.
That were arrived at by the independent third party contracted by the board. At some cost, I imagine. The third party has placed an exercise price of AUD 0.0817 per option on those there. So I'll put it to you. Once again, why? Why are you not using the market value approach as opposed to one of these so-called fair value instruments?
Linda, thank you.
Thank you. Thank you, John. The options have been valued at fair value, which is linked to accounting standards. The same independent party that valued the options for Mr. Singleton was used again in the valuing of the options for Mr. van Dyk. Fair value, you refer there to AUD 0.08. The exercise price for Mr. van Dyk's options is actually, not AUD 0.08 . Fair value, as you referred to earlier, is a much more complex way of valuing options, but it builds in the underlying risk over the whole performance period. That is a necessary thing in terms of actually understanding what the value of those options will be. The fair value was valued at AUD 0.08 . The exercise price is actually AUD 0.32 .
Yeah. Okay. There's a difference. So you do agree with me. It's AUD 0.08 .
The fair value.
The fair value.
Fair value.
That was what was divided into 300,000?
Yes.
Yeah. So that's my question. I haven't heard of accounting standards. I've heard that there's an application of a Monte Carlo method or the Black-Scholes. For retail investors, that's just.
It is complicated, John.
Oh, that's complicated. Yeah. It is not very good because you can see here it's getting quite different outcomes by a value decision that someone's made along the way. I just like it registered that the market value percent in the way if you're using this formula that it should be 1 million options, not 3.6 million.
I'll take that on board. It's a different way of registering it.
Sorry, John. I don't want to keep speaking at this meeting. I shouldn't really, but are you aware that Sy essentially bought those options?
I'm not aware of that. I didn't see anything in there.
Sibrand gave up income, salary, in order to buy an option in the company going forward. It's a completely different structure or system to the performance rights plan where rights are gifted. That's quite different. It probably isn't appropriate for us to go through all the detail here, but I just want you to understand that it's a fundamentally different system. If performance is poor in the performance rights plan, there's no downside for the individual. In this plan, if the performance is poor, Sibrand will be giving up part of his normal remuneration as a result of that. It's very different. So there's downside risk there. Maybe that's quite complex, and I agree. It doesn't come out quite as easy. Maybe it's not quite so obvious, but it is a fundamentally different system.
Thank you for that. I didn't realize that. Like you said, you illustrate one of the things I've got here about remuneration plans. They are very difficult for the average person to look at. This is why I take a bit of an objection that you've got two things running. You've got a performance rights thing running as well as an option plan running. If you want to confuse a small retail investor, do what you're doing.
We hear what you say. Because we have to work through it as well, too. Okay. This resolution is the last item on the agenda. So there are no more questions. We will now conduct a poll for resolutions one to six. You're going to do the talking? You want me to do the talking? Okay. I'll do the talking, all right? Never too sure. Please now complete your voting cards and ensure you print your name and sign where indicated. When you have finished, please lodge it in the ballot box being circulated by Computershare. Please let the returning officer or any other Computershare representatives present know if anyone has any queries or requires any assistance with the voting cards. Okay. It appears the voting process has been completed.
If there's any individual present who has not yet had their completed voting card collected from them, pardon me, by the Computershare staff, would you please raise your hand? No, we're all good. I now declare the poll closed. As mentioned earlier, the results of the poll will be announced to the ASX on the company's website later today. A recording of the webcast will also be available on Austin's website following the AGM. Ladies and gentlemen, this concludes the formal part of the business of the meeting, and I declare this meeting closed. As mentioned, I will now hand over to our CEO and Managing Director, Sy van Dyk, to provide an update on the activities and performance of the company in 2025 and our plans going forward. We will then open the floor to questions, after which please join us in a cup of tea or coffee.
Thank you, Jim. Welcome to our shareholders, board members, employees, and advisors here today. Today, I will provide a recap of financial year 2025, but I also want to discuss the outlook of the company and our strategy going forward. This is in light of the announcement we issued yesterday regarding the revision of our FY 2025-FY 2026 guidance. I want to assure shareholders we have conducted a full business review and taken immediate and firm action to get through this challenging period and strengthen our performance. I will address this today with you. Whilst we are facing some challenges, in my view, Austin remains fundamentally a solid business with an attractive value proposition. We are making progress in a lot of areas, and I do want to reiterate this today. We are a 50+ year-old business.
We have more than 1,600 employees across four major operating centers, plus partner companies to enable us to even further reach across the globe. We design and manufacture customized equipment for an industry that is performing strongly globally. We have a good reputation for our design and manufacturing, and we are located in four key mining jurisdictions across the world. Recurring orders from our customers is. Truck bodies currently account for about 70% of our group revenue. We have six truck bodies in our range, and we can service clients in any miner's jurisdiction to suit any commodity or specific mine condition. Our trays are designed and engineered for efficiency gains through increased payloads and reduced wear and cycle times. This leads to improved cost of ownership to our customers.
Austin is an industry leader in the design and manufacture of mining buckets to suit all OEM excavators, shovels, and loaders. Our custom design range is suitable for all mining applications, from high-production, lightweight mining buckets to any heavy-duty armored mining bucket. Each mining bucket is custom-engineered to suit specific applications. We parts-match buckets with existing site equipment, ensuring we get faster cycle times and maximize machine efficiency. We have a broad international reach through our manufacturing facilities and partnership centers, and we can export product to customers anywhere. We have invested in our customer service and after-sale support in the last few years, and this is coupled with an extensive global partner network that helps us deliver excellent customer service. Some of the value add for our customers is through our investment in new technology and equipment to enhance our offering.
One of these products is austIQ, which we launched in financial year 2025. austIQ is a new digital platform providing smarter, data-driven maintenance and performance monitoring. We are providing it as a complementary service to our customers on truck bodies and buckets, and it's going to provide significant benefits to our customers. austIQ delivers real-time insights on equipment health across entire fleets. It also provides precision over replacement programs. Interest has been strong, and we expect austIQ to become a key driver of growth and customer engagement to complement our product sales. One of the other safety initiatives and innovations is the iTrip door latching and control system for dipper buckets. iTrip has proven over several years of testing to reduce maintenance intervals and increase the mean time between maintenance and overall, consequently increasing throughput and reducing maintenance costs.
It further significantly reduces exposure of people to high-risk tasks due to a 72% reduction in maintenance hours, making our product safer for our clients. Our large Armadillo bucket is fitted with the iTrip latch, including the one we exported to the U.S. It's compatible with all dippers and is designed, as I said, to reduce maintenance hours and make our product safer. We recently announced a partnership with US-based Bierwith Forge to be a distributor of Bierwith Forge's ground engaging tools, or GET, as it's referred to generally. We are able now to offer GET technology to customers in Australia. Our Mantec team fitted and delivered the first dipper bucket with a GET system in September to a domestic customer, and I'm pleased to report we have now received a further order for a similar dipper with the Bierwith Forge GET system attached to it.
We're making great inroads in this space. Turning now to the financials in financial year 2025. It was marked by progress and consolidation of the Austin business. It also presented some challenges, especially in our South American business, which is part of the reason for our adjusted guidance. I will address our rectification shortly. We were pleased to report a 22% growth in revenue to AUD 377 million. This growth was achieved as we concentrated on building sales and manufacturing opportunities across each of our business units. Statutory EBITDA was down on the previous year, and we need to focus now on margin improvement and profitability growth. Whilst return on equity was slightly down on financial year 2024, we delivered a 19.7% return on equity in 2025. I again understand we need to improve our business health.
I will step through the range of measures shortly that we've made following a review of the business. Whilst we want to do better, I want to point out that the return on equity is significant and highlights the outstanding return of the business against a low capital base and requirements. We are not capital-intensive as a business. Financial year 2025 revenue was supported by another strong year in our North American business unit, which generated 39% of the group's total revenue for the financial year and recorded a 54% increase in revenue to AUD 147 million. Our additional lease facility located close to our main facility in Casper is now fully operational, and we have made investments in our main facility as well, actually significant investments in that facility.
We have had to cope with a ramp-up of activity in North America, and with the additional capacity now in operation, our focus will be on improving plant efficiencies. Just to focus on EBITDA a little more closely. The APAC region made a solid contribution to profit and margin. The APAC region delivered revenue of AUD 174 million, representing 46% of group revenue. Improved efficiencies were evident in an improvement in margin from 11% - 19%, which is a testament to the APAC team driving strategies and improving profitability. Whilst our South American business unit recorded revenue growth, our margins there were significantly impacted by capacity constraints and operational inefficiencies related to the rapid ramp-up required to deliver on a large OEM contract.
We also identified and corrected accounting errors in our financial year 2024 financial statements relating to the Chile business, which involved incorrect revenue recognition for certain product transactions relating to one specific client. Before addressing these challenges and outlook, I do want to say that I believe in and am committed to continuing our strategic focus, which is to build on three operational pillars: product leadership, customer focus, and manufacturing excellence. Under product leadership, we continue to design and engineer products that meet the changing need of our customers for productivity, efficiency, and sustainability gains. Under customer focus, we continue to build our sales and marketing programs and ensure we are constantly improving our services to our customers throughout the life of the products. In manufacturing excellence, we are focusing on ensuring centralized operational systems are in place across the company.
Now on to outlook, and we are faced with some challenges in the business. We will overcome them, and we are moving quickly to address them. However, I would like to stress that even with these challenges, we have a solid business and a base to work from. Yesterday, we announced to the market a downward revision on our FY 2026 guidance. We now see revenue in the range of AUD 370 million-AUD 380 million and underlying EBIT guidance from continuing operation in the range of AUD 30 million-AUD 34 million. As I said, we have undertaken a full review of our current issues, and I will discuss these measures that are in place immediately. Commercial viability of an OEM contract into 2024 continues to prove challenging. After constraining capacity in Chile, production was moved to Austin, Indonesia, operation to fulfill the order.
The contract has negatively pressured the profitability now of both businesses. As a result, we will suspend the acceptance of any further new customer orders under this contract until commercial terms and returns are improved. No contract penalty will apply. All current, but not yet billed orders will be manufactured in Chile at a rate of five trays per month until March 2026. A further impact to revenue and cost has arisen at Austin, Indonesia, following a major local customer's requirement to defer work into the second half of 2026 due to significant operational disruption at its mine site. This has resulted in an under-recovery of the company's fixed cost base. The Indonesian business is also being impacted by a reduction in Australian coal sector orders. Austin has now reduced its Indonesian workforce to better align to the current demand levels.
Austin, Chile is also being impacted by excess fuel wastage on product completed between July and September. This was work in progress manufacturing that was underway prior to an overhaul of the Chile work processes. As previously communicated, Austin has implemented a series of actions in Chile to improve the business unit's performance. These include we've appointed a new Vice President of America to oversee both North and South American operations. We're upskilling the local management team across numerous functions, including the appointment of a new General Manager. We're utilizing the high-performing North American team and very experienced team for that matter to assist local management to implement North American manufacturing systems and processes. In addition to the above, Austin has addressed excess steel consumption by improving Chile's nesting processes and strengthening steel management controls.
The nesting processes are now overseen from North America, and all new steel processed from August 2025 has been within acceptable waste levels. We've adjusted shift rosters to improve controls, efficiency, and oversight of the workforce. This will lead to a significant reduction in staff costs and improved efficiencies. We've implemented significant cost control measures and improved cost governance over expenses. We've commenced fixing the shop floor layout and flow of product through the plant, which will also improve efficiencies. The North American business unit has seen significant revenue growth over the last few years. As we said in FY 2025, the revenue grew 54%. The business has further expanded to meet demand, which with the lease facility and upgrades to the main facility in Casper. However, profitability in this year is expected to be impacted by labor inefficiencies and outsourcing due to the rapid growth of the business.
The business has to use contract labor, which can be transient and not as efficient as long-term employees that are familiar with Austin systems and processes. Austin had also had to temporarily outsource some of its manufacturing to meet customer demand, which negatively impacted margins. As a result, Austin has implemented again some measures with immediate effect. We're continuing to generate employee pipelines and skill development through our weld school, where we take on trainees and also train unskilled staff to become welders. We're developing teams with the right mix of skills and experience and undertaking staff mentoring to develop less experienced staff, which will positively impact efficiencies going forward. We're continuing to roll out lean manufacturing principles with a particular focus on production flow to ensure we reduce the idle time waiting on parts.
With the upgrades to the new facility and occupation of additional lease facility, outsourcing has been severely reduced. The last of the main outsourcing of product flowed through July and August of this year. Across the business, Austin has implemented new reporting and oversight protocols with a focus on productivity and cost drivers. Including staff productivity measures, steel wastage, and consumable usage. These will be monitored on a weekly basis going forward. While I think our overall business strategy, based on the pillars mentioned, will set us up for growth, my immediate priorities are to work through these measures and to be disciplined in doing so. As CEO, together with the executive team, this action will be our relentless focus for the upcoming months. Before I finish, I'd like to express my sincere thanks to our management teams across the world. Our employees across the world.
I actually really thank them for all their commitment and hard work. It's not always easy out there. I also like to thank our customers and partners for their ongoing trust and collaboration, as well as the board for their guidance, and especially our shareholders for their continued support. Thank you. I'll now hand back to Jim and take on any questions that you might have.
Okay. We'll now open to the floor for questions. If you'd like to ask a question, please raise your hand. Once you have a microphone, please state your name first and go from there. We also will be taking, at the end, questions from the people who are online as well. Questions on the floor.
Could you just tell us what your forecasts are on dividends? Will we be paying one?
Okay.
Like every year, we will evaluate our position on cash flow and make our decision at that point in time. There are a few people on the board who like dividends too, so do not feel too bad. Okay. Okay. Let's take some questions from the website, webcast.
Just got a couple here. One from Tim Bishinder and one from Adrian Westwood, and just pertaining to the share buyback. And it is basically considering the operational issues of the company. On what basis was the share buyback announced? It will continue.
I will let you handle that one.
I will probably address the first question or the last question. Why do we undertake a share buyback? When we engage with all the investors, that question came up and that advice came up quite considerably to us. Based on our valuation in the market. We are a cheap stock.
I hope you all agree with that. It is actually quite a good way to return cash and actually add value to the business to buy your own stock, especially based on a low valuation. That is the reason why, the logic why we actually undertook a buyback. Effectively, you remove stock from the market, we buy, and then we actually obviously go ahead and actually cancel that stock. By default, mathematically, that should increase our stock price. There is all intent to continue with the buyback, and we will do so with discipline, considering our cash position at any given point in time. At this point in time, there is no—while we are continuing with the share buyback.
Okay. Just one more from Tim Bishinder, and it is about Indonesia.
Why does Indonesia have underutilization, and has it not been supporting Chile with building product?
The short answer is it has. The product that Indonesia manufactured for Chile is 15 bodies. It is not large; it is 15 bodies that we actually helped to meet the contract requirement in Chile for the OEM contract. Indonesia is set up to do around 27-30 bodies a month, and the demand on Indonesia is lower. It also does a lot of work for domestic providers, especially in the underground space—chutes and spill masters. Unfortunately, due to an event at one of our main sites, at the client site, they paused all manufacturing of the underground chutes and spill masters, and that was pushed out to the second half of the year.
We have a workforce set up to do 27 to 30 buckets of three trays, plus all the other work. That resulted in us basically having too much staff for the workflow that came through as a consequence of that delay. That is the reason why we have to right-size the business for the demand right now. In the first half, Indonesia will be slower than what we would like it to be, and the second half is going to be strong again. Right now, we are just right-sizing the business for what we are seeing today.
I have one more on the webcast from Chin Yor Chan. Why has the OEM contract affected profitability of the town as well? Why did we not foresee this when moving production over there from Chile?
It is a fair criticism, and we will accept that.
I can go into a lot of detail here as to trying to blame the OEM, but at the end of the day, we need to put our hand up and say we didn't do a good enough job. Yeah, I think we just underestimated the effort and the complication it would take to manufacture these bodies in Batam. We're not 100% to blame, but I guess at the end of the day, we are the management and should have done a better job.
There's two coming through, so one more, Chris. Writing back. Do you anticipate future competition from robotic technologies to manufacture products more profitably?
No. I mean, I think there is competition all around the world for the products we deliver. We are also embracing robotics and technology. We actually do have a few cobots around the traps and robots.
It's not as if we aren't actually exploring that space and actually seeing how we can actually improve our own efficiencies by adopting technology.
I suppose just to add to that, that's an area that's changing fairly quickly. Before, it was very, very large robots, nearly getting smaller and smaller. We are spending a fair bit of time on that as we go through and trying to keep up with it. It is a changing world very quickly. I've got a grandson who's finished his last day at doing his year 12, and he's going into that area at Curtin University. It is a pretty attractive area as well.
No further questions on the webcast.
Okay. Thanks, Jane. Any more questions from the floor? John?
The last one.
I thought you had a couple there, actually. No, no. We know who you are, John Ferguson.
Just a short one.
What vulnerabilities does the company have to the effects of climate change?
Sorry. Let me try and answer that. It probably depends on which perspective you're looking at climate change. I'll start off by saying, obviously, climate change is a concern for everyone, I should say, and obviously should be. If you look at our facilities itself on fixed assets, then there is very low level of concern because they're all quite highly based, and they're not at low levels as such. From a facility perspective, there's really no concern. From an employee perspective, probably the only real area where we're concerned will have concern is maybe in Indonesia, where a lot of our employees are probably domiciled in low-lying areas. Yeah, that is a concern for us, but not a direct concern. As to from a client perspective, I think.
Climate change is actually a positive on our business model because we manufacture lightweight bodies and buckets. What we can offer clients is for, say, energy consumption to actually move more or dirt, rather than still cutting that up and down a wall road to a crusher. For us, it's actually a marginal gain for our clients to actually go to a more lightweight design. All up, from a business perspective, it's probably a positive as we educate more and more clients to go more to lightweight design products, which is where our expertise is.
Okay. Thank you.
Just one last one. I'm a resident shareholder. I'm just interested in which senior management actually have a KPI that is attached to the share price.
I do. Options. To say the option to most of them because all our senior management, whether they have p erformance rights or an options system in place, so everybody is very connected to the share price performance.
Okay. All right. With that, thank you very much, everyone. I look forward to catching up again. Once again, thank you for your support. No doubt quite a few will want to stay around and have some informal chats. Please do. There is also coffee outside. I just want to say thank you to Jane and her group. Also to Sarah, who is behind the scenes as Company Secretary. Worked pretty hard to put this all together. Computershare, who have also been heavily involved before we got here today, thank you for the work that you have done. Thank you very much, everyone.