Good morning and welcome to the Atturra First Half 2025 Investor Webinar. My name is Danny Younis, and I handle Investor Relations for Atturra. With me this morning, we have the Chief Executive Officer, Stephen Kow, and the Chief Financial Officer, Herb To. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the webinar over to the CEO, Mr. Stephen Kow. Please go ahead.
Thank you, everyone, for joining us today. I am Stephen Kow, the Chief Executive Officer of Atturra. Also joining me today is Herb To, the Chief Financial Officer, and you'll hear from him later. Today, I'm pleased to be able to talk you through both our business and our half-year 2025 results. It's really important you take the information in this presentation in conjunction with the accounts we released earlier today to the ASX. It's important that you review the presentation pack, understanding the disclosure on this page. Let me start with the agenda. Firstly, we're going to cover off a results summary. Then Herb will dive into the financial performance. Then I'll talk through Atturra's strengths and capabilities, our awards and acquisitions outlook, and there'll be an option for Q&A at the end.
I'm very pleased to announce a solid First Half FY 2025 Result and continued strong performance across the business while at the same time we continue to invest to add on new capabilities. Our results clearly demonstrate the inherent strength and relevance of our strategy of ensuring that we have key leadership positions in key technologies and industries. If we talk about our top-line performance, our revenue was up strongly, 27% compared to PCP, to AUD 141.3 million. Our statutory EBIT increased by 26% compared to PCP, to AUD 6.7 million. Our underlying EBITDA was up 23% compared to PCP, to AUD 13.6 million. Our earnings per share also increased 14% compared to PCP, to AUD 1.31.
These strong results and careful capital management mean we ended the year with over AUD 95 million in cash, and this combined with over AUD 39 million in underlying facilities means we are well placed for significant investments over the next 12 months. Before we jump into the details, I want to do a quick business overview and cover off our vision and strategy. I apologize to our long-term investors as this is a repeat of what you have seen in the past, as our vision and strategy has remained unchanged since before we even listed back in 2021. At a very simple level, we believe strong performance is a result of great people, a common vision, and a simple strategy. Our vision is simple. It is to be Australia's leading advisory and IT solutions provider.
We are united internally and believe there is a market gap for a strong local Australian company. We also believe there's an ongoing shift towards sovereign procurement and local capability. This shift is not only limited to government and defense. We're actually seeing it elsewhere. We actually see this shift potentially accelerating due to ongoing geopolitical instability that will drive focus towards local supply chains and investment. As a result, Atturra has a strong long-term outlook for our utilities, manufacturing, and defense businesses in particular. How do we achieve this vision? We do it through our strategy. When we talk about strategy, we break our strategy into two main areas. Firstly, our industry strategy. Atturra believes in deep industry capabilities, ensuring differentiation in our go-to-market. We continue to invest in creating industry-specific solutions and IP, and I will cover this off in a little bit more detail later.
Importantly, we've seen early demand for some of our new solutions, in particular, Scolarian, our student information system, and also our Atturra Cloud Platform. We also added natural resources as our newest industry at the end of last financial year. Albeit early days, we have seen a strong demand for our services. Atturra believes that this industry strategy contributes to our low client churn, and our industry expertise coupled with industry IP contributes to predictable long-term revenue streams. The second half of our strategy is our technology strategy. Long-term investors will also notice that this is unchanged. We will continue picking high-growth technologies where we can take a leadership position. This is to ensure Atturra can continue to achieve strong market growth. We will also continue to look for and identify niche and specialist technologies where we can take a leadership position.
A good example of a specialist technology is M3 from Infor, which we brought in as part of a recent acquisition in January this year, being ComActivity. This specialized technology strategy ensures that we both have low client churn but also a reasonable level of pricing power. Given our growth and strong client demand, Atturra will continue to look at adding additional capabilities over the next few years. As mentioned during the FY 2024 results call, Atturra is looking to expand our offering by investing in larger-scale enterprise solutions. Good examples would be technologies like ServiceNow and SAP. The strategy of adding additional enterprise solution capabilities will give us greater access to enterprise clients. As a result, we'll be able to increase our overall addressable market. I will now briefly cover our focus industries, and then I'll hand over to Herb to talk through the financials.
This slide shows our focus industries, which I'll now cover. In the interest of time, I will combine defense and our federal government business. Atturra has over 300 security cleared staff servicing defense and government. Despite the ongoing tough trading conditions in Canberra, Atturra still sees very strong long-term demand. Atturra also believes our unique position of being listed, sovereign, and having the scale to provide end-to-end IT services has been a significant advantage in the medium to long term. Also, in the interest of time, unlike defense and federal government, I'll combine our utilities and financial services businesses in the interest of time. In both of these industries, we are dealing with highly regulated operating environments, meaning we see a lot of demand for compliance work coming out of our data integration business.
However, we have now successfully expanded and have utilities clients not only in data integration but also within our business application, managed services, and Microsoft offerings. Next is manufacturing. Atturra sees manufacturing as a key industry within the company's portfolio. Atturra has a great loyal client base in this industry. Although technically in the second half of FY 2025, we have added another 60-plus clients, almost doubling our manufacturing footprint through the acquisition of ComActivity in January. Although manufacturing is still a relatively small industry for Atturra, we believe that it is strategically important, and over the long term, we will continue to see stable growth as governments look to secure supply chains in an uncertain global market. Next is local government. Our local government business continues to grow.
We have now started to broaden our offerings beyond Technology One and Infor services to include our main service offerings and products, including platform as a service. Atturra's focus over the next few years is to expand our offerings into local government and become the provider of choice for all things technology. Next is education. Education continues to be a strong focus area for Atturra. We now have the capabilities to deliver the full range of technology solutions in education, from our school laptop program, where we have over 30,000 laptops under management, through to Scolarian, our student management system, which is a proprietary solution developed with Microsoft and our foundation client partner, Brisbane Grammar. I will talk more about this later. Lastly, natural resources. We launched this at the start of the financial year. It is progressing strongly. We have over 50 staff delivering services into natural resource clients.
The second half of FY 2025 and FY 2026 will see Atturra best in building out industry-specific offerings. On this slide, you'll see Atturra has continued to grow strongly. We've added more than 50 clients in the half. A small number of those clients are represented on this slide. We have also continued to change our revenue mix with our predictable revenue increasing at 66%. This reflects my comments in FY 2024 full-year results that as a business, we are focusing on getting our predictable revenue to a minimum of 66%. This is a simple reflection of Atturra's five-year growth. It reflects the strength of a consistent and focused strategy, with the revenue having a CAGR of over 35% since the first half of FY 2021, matched with an even higher EBITDA growth rate. Now, to dive into the financials, I'll hand over to Herb.
Thank you, Stephen. Hello, everyone. My name is Herb To. I'm the Chief Financial Officer for Atturra. I'll be presenting some more details around the company's financial results for the six months ended 31 December 2024. As highlighted in this first slide, we continue to achieve our goals and deliver strong revenue and underlying profit growth. Our revenue increased 27% on PCP to AUD 141.3 million, and our underlying EBITDA increased by 23% on PCP to AUD 13.6 million. Our underlying EBITA also increased by 34% to AUD 8.4 million. We also ended the half-year with more than AUD 98 million in the bank. This strong balance sheet enables Atturra to continue to invest in our strategy of bringing on additional market capabilities. The next slide here highlights the more key profit and loss results. It compares our six-month performance up to 31 December 2024 with a six-month period ending 31 December 2023.
As previously highlighted, we achieved 27% revenue growth on revenue of AUD 141.3 million. The quality of the business has remained stable with a gross margin percentage of 30%, which is in line with our previous statements of gross margin targets being between 28% and 35%. EBITA, which measures profit after the removal of the effective non-cash charges of acquired intangibles, increased by 44% from AUD 6 million- AUD 8.7 million. We've highlighted underlying EBITDA as an important measure of the company's performance. This underlying EBITDA result of the business has improved by 23% to AUD 13.6 million. To understand our underlying EBITDA, we exclude non-recurring expenses of revenue. In FY 2025, we added back share-based payments, revaluation of a continued consideration, M&A-related transaction and retention costs, capital-raising costs, and acquisition-related integration costs. The underlying EBITDA margin of 9.6% is a slight decrease from 10% year-on-year but is consistent with the company's investment philosophy.
Earnings per share also increased by 14% to AUD 0.0131. The next slide details EBITDA or EBITA, or adjusted EBIT, which adds back client relationship intangible amortization and acquired software amortization. Underlying EBITA also adds back specific non-recurring items. This metric provides the underlying profitability of the group, excluding the amortization impact of non-cash charges of acquired intangibles and specific non-recurring items. The underlying EBITA of the business of AUD 8.4 million has increased 34% on PCP. The next slide is a summary balance sheet. It compares balances at the end of the current six months with the balances at 30 June 2024, the end of FY 2024. As Stephen mentioned, the company has a very strong balance sheet position. Our cash balance is AUD 98.4 million, an increase of 62%, and AUD 37.8 million from six months ago. We have net tangible assets of AUD 63.7 million, an increase of AUD 42.2 million.
We have working capital of AUD 74.2 million, an increase of AUD 43.9 million from six months ago. Obviously, a major driver of this increase was the capital raising completed in January, where we raised AUD 71.4 million with net funds received after costs being AUD 69.8 million. The 30 June 2024 tax liability of AUD 1.7 million was paid in the first half of FY 2025. This is reflected in the company's operating cash flow, which I will talk to you shortly in the next slide. This cash flow slide is a summary of the sources and applications of funds. That is the cash flow of the business. It compares cash flow from the current period to the six months ended 31 December 2023. Our cash position has improved by AUD 49.9 million from AUD 48.5 million- AUD 98.4 million.
Overall inflows and outflows from the period include operational cash flow of AUD 2.4 million and improvement of AUD 2.3 million to PCP. Seasonality and timing factors affect operational cash flow and tend to be slightly volatile and may show large movements from period to period. Cash outflows include AUD 35.5 million in investments in subsidiaries. This is compared to subsidiaries acquired in FY 2025 of AUD 28.9 million, plus earn-out payments made to previously acquired subsidiaries of AUD 6.5 million. This compares with the investment in subsidiaries made in FY 2024 of AUD 39.1 million and earn-out payments of AUD 4.3 million. In the current period, cash inflows include AUD 74.3 million, which is a combination of the capital raise and the net drawdown of our loan facility to fund our acquisition activities in the period. The net cash from the capital raising was AUD 69.8 million. As mentioned before, this excludes the fees paid of AUD 1.6 million.
There's a net increase in cash outflows regarding our lease payments, primarily due to the increase in office capacity associated with the Exent, Chrome Consulting, and Plan B acquisitions that did not exist for the same period in FY 2024. Now I'll hand back to Stephen, and we'll be pleased to answer any questions in the Q&A later in this session. Thank you.
Thanks, Herb. In August 2024, Atturra disclosed some of its new proprietary offerings that was launched in the market. I want to provide a brief update on each of these. Firstly, Scolarian. Scolarian is a cutting-edge student information management system built in-house on Microsoft D365. Scolarian in total will be 12 modules, which can be used as an entire integrated system or just selected modules as required. When I last updated the market, we had one module available, and now we have four modules available out of the 12. We have one school, Brisbane Grammar, using the platform, one school which this month signed a letter of intent to implement, and a pipeline of over 50 prospects.
Atturra anticipates adding one to two schools over the next 12 months and then expects to see an acceleration in sales when all 12 modules are available, noting that the sales cycle for a full student information system is six-12 months. I'm also proud to announce that this month we launched Scolarian on Microsoft AppSource, which marks a significant milestone expanding its accessibility and credibility through the Microsoft ecosystem. As a trusted marketplace for business applications, Microsoft AppSource provides a platform for schools and businesses to discover, try, and deploy solutions that integrate seamlessly with a large set of Microsoft products, including Azure and Dynamics 365. Scolarian's presence on AppSource validates its reliability and security, making it easier for schools to adopt the platform with confidence.
This move enhances Scolarian's visibility, connects it with a broader audience, and streamlines deployment for Microsoft users, ultimately reinforcing its position as a leading educational technology solution. Next is the Atturra Cloud Platform. I'm very excited about the possibilities of our Atturra Cloud Platform. This is not another private cloud, but the overarching branding of a set of hosted solutions. I will highlight some of the specific solutions which have expanded since I last presented in August. We have now launched ACP Nuix Neo Managed Service. Atturra worked with Nuix, NVIDIA, and HPE to develop the solution, and we can now offer this world-class analytics and investigations platform capability in multiple countries. In the near future, you'll see several press releases around our ACP platform as our solutions are released into production, with a focused sales campaign planned in the middle of 2025.
Although a new product, we have used and run trials with clients on our new platform, proving its enhanced processing capabilities. In addition, our DA Online has been rolled into this offering as part of our technical consolidation. Finally, and technically a subset of the Atturra Cloud Platform offering, is ACP for Boomi. You'll recall in August 2024, when providing the FY 2024 results, I announced ACP for Boomi, which is a fully managed and monitored Boomi solution. We launched this solution to the market formally in September 2024, with two early adopters as clients. I'm very excited about this long-term prospect, and we already have 11 clients signed up and over 25 prospects in the pipeline. This is particularly pleasing, given we forecast the sales cycle to be up to six months. As mentioned, we go to market via industries, but we also engage clients through our capability offerings.
We have several core capabilities that are highlighted on this slide, ranging from advisory and consulting services all the way to managed services, which gives us that combined end-to-end offering for clients. We have a slide for each capability, and I'll give you a brief overview of each. I do not plan to go through this slide or the next five in detail. These are provided to our investors to provide you further insight in your own time. Firstly, advisory and consulting. We have a specialist advisory business that is traditionally focused primarily on federal government and defense. With the acquisition of ExCENT in August, we've extended our IT consulting capabilities in the commercial sectors, including aged care and natural resources. Post the acquisition of ExCENT, Atturra has invested extra capability into the consulting team with a focus on using ExCENT to grow other parts of our business.
Although still early stages, we've seen some early success in advisory being a key business generation engine for the rest of Atturra. Next is business applications. Our business continues to perform strongly with continued expansion in local government education, with some transformational work completed at two of Australia's major universities. We have maintained our leadership position in key technologies we work in, in particular QAD, where during the half, we won our largest ever QAD upgrade deal. Next is our cloud business solutions. Our Microsoft business unit continues to perform strongly. In the last half, we became one of the first Microsoft partners to deploy Contact Center as a Service, which is transformed by Copilot. We continued our strong investment in building the modules of Scolarian that I mentioned earlier, using the Microsoft Dynamics 365 technology. Next is our data and integration business.
We have continued our market-leading position and continue to win key technology partner awards, winning several with both Smartsheet and Boomi. There is significant potential in D&I due to the massive demand around data projects, but also because of our investment in the ACP Boomi platform, which I talked about earlier. Last, and definitely not least, is our managed services business. I'm really excited about the opportunities managed services brings, especially with our expansion into New Zealand with Plan B giving us another 50 technology engineers and five data centers. We are pushing hard to expand this offering across our existing client base in key industries like local government and K-12 education. We picked up many awards in this area, and I'll have a separate slide on that later. It's now time for me to celebrate our wins.
I'll provide an update of some of the key awards we have won in the last half, along with how we are tracking and integrating our acquisitions. As you can see from this slide, we have won many awards, and I'll call out just a few. One, Scolarian's been recognized in the market by the ARN Digital Transformation Award. We've continued our winning position with Boomi and Smartsheet awards. In addition, you'll see that we won the NUX Neo Champion Award, reflecting the work we've done with ACP in managed service around NUX. Also, we've continued to hold our leadership position as the HPE Education Partner of the Year, as well as recognition for our consulting and advisory business.
In the first half of FY 2025, we have completed three acquisitions: ExCENT, as I discussed earlier, to expand our consulting capabilities out of Canberra, Chrome, an award-winning SAP OpenText partner, and a natural extension to our existing OpenText business, and Plan B to strengthen our managed services business and provide a strategic launching pad for New Zealand. Although technically second half of FY 2025, we have also completed the acquisition of ComActivity in January, adding an additional ERP stack to our offerings, as well as bringing more scale to our manufacturing business. It is worth highlighting the four acquisitions integrating the four different areas of the Atturra business, allowing for parallel integration to be conducted. It is important to cover our integration, as Atturra does believe in fully integrating all acquisitions.
The following acquisition of the business, Atturra's focus on keeping the people and specializations in place while progressively bringing in Atturra's culture and operating processes. It is actually one of the key reasons our acquisition process involves a close review of an acquired company's culture prior to acquisition. It also ensures that we do not lose the secret sauce that made the acquired target successful. Despite this, Atturra does believe in full systems integration. This is important to drive long-term synergies. This is done to ensure we have consistent systems and processes that are scalable over time. This slide shows the progress we are making with all recent acquisitions, with ExCENT close to being fully integrated. As you can see, the most recent three acquisitions are already well underway. Let's go to Outlook. Atturra is very bullish on our long-term outlook.
As mentioned during our recent trading update, we have three strategic pursuits that are currently underway, all which will deliver significant benefits, most likely in late FY 2026 or FY 2027, if successful. In terms of focus, firstly, we will continue to invest in our managed services business. As I called out in FY 2024, the key focus is to target transformational larger deals for FY 2026 and 2027, as we now have the genuine scale to compete in these larger transactions. Secondly, we'll continue to invest and develop our solutions and IP. Strategically, we want to have a piece of our IP in all of our long-term recurring revenue clients. We see the opportunity to continue to expand Scolarian offerings, as well as continue to expand our Atturra Cloud Platform offerings. Finally, we'll continue to slowly expand offshore, where we have a market-leading capability and solution.
A really good example of this is the Boomi Atturra Cloud Platform, or ACP for Boomi, which will be sold globally. Where does this lead us? Atturra's forecasting revenue for FY 2025 to be in the range of AUD 305 million-AUD 320 million, and underlying EBITDA to be in the range of AUD 31 million-AUD 34 million. I'm now happy to move to Q&A.
Thank you, Stephen and Herb. If you wish to ask a question, please press one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Nick Harris from Morgans. Please go ahead.
Good morning. Thank you for taking my call. I've got three questions I just want to understand. The first one was just the trading update a couple of weeks ago. If I kind of put that in the context of your full-year guidance, and if I'm interpreting correctly, you kind of expect to be able to offset those challenges in the second half because you haven't moved your guidance for the full year. I just want to maybe understand or make sure I've understood that correctly. Do you want me to shoot off the other two or one at a time?
Actually, I'm happy to do all three, and then I'll answer all three.
Cool. Thank you. The second question was just around Microsoft rebates and incentives. They made some really big changes last year, and I was just curious, does that have any particular impact on Atturra, or is it not applicable? My third question was just on the Canberra federal government side of things. What are you seeing at the start of this calendar year? Is it tracking roughly the same, or are things starting to look a little bit more improved? Thank you.
Not a problem. Yeah, your comments on the guidance are correct. The only thing we did kind of highlight in that guidance is that there are some risks in there. We're taking that into account into the guidance. Those risks will in part link to your third question. Canberra's still the same, or maybe slightly worse, or very, very similar to what it was before. We're not really seeing a turnaround. Looking at the forward budget statements, we do notice that in the next few years, there is definitely more spending in particular places like defense. I expect Canberra to be pretty lackluster all this year and maybe even beginning of next year, depending on when the election's called and if there's any delays around that. Then a reversion to normal where we expect that to pick up.
Obviously, we're well placed for that and eagerly awaiting like many others are. The Microsoft rebate, yeah, look, the license component of rebate is such a small part of our business. It has no noticeable impact on us, so it's not really applicable.
Thanks very much.
The other thing I'll call out is that a slight error. When I spoke earlier, I said our earnings per share was AUD 1.31. I kind of wish. That's AUD 0.0131, obviously. I should throw that correction out.
Oh, yeah. Option A sounds better, but thank you for clarifying.
Yeah, I was just a few years ahead.
Thanks.
Okay. There are no further questions in the queue, and that concludes the Q&A session. I will now hand back to Stephen for any closing remarks.
No, thank you. Everyone who could today, yeah, always feel free to reach out and ask questions if there's anything else. Thank you very much. We'll see you at full years.