Thank you for standing by, and welcome to the DGL 1H FY 2022 results presentation. Throughout the presentation, you can submit your questions. They will be answered at the conclusion of the presentation. I would like to now hand over to Simon Henry, Founder and CEO. Thanks, Simon.
Thank you very much. Good morning, everyone. I'm Simon Henry. I'm the CEO, I'm the Founder, and the largest shareholder of DGL. On this call with me this morning is Ben Halsey, our CFO. Let's turn to page three. DGL is a sizable company now operating throughout New Zealand and Australia and trading around the world. We are a vertically integrated chemical management company. DGL is divided up into three main segments: chemical formulation and chemical manufacturing, chemical storage and distribution, and environmental treatment services. Let's have a look at some of the numbers that show the scale. We have nearly 500 staff. There's assets of AUD 416 million. We operate from 54 sites stretching from Darwin to Christchurch. We have an annual throughput now in excess of 1.5 million tons.
We have 140,000 tons of chemical storage capacity. Let's turn to page four. There's a snapshot of our financial results. Revenue now, sorry, one moment. Our employees, you'll see there, have risen from 290 to 486. Active customers have risen from 1,300 to nearly, to over 3,000 . Trucks now 56 to 176. Properties that we own or lease and operate from 30 to 54. The group is growing strongly and will continue to grow strongly. The last six months we've acquired seven businesses. Those businesses have been successfully integrated into the group and are all performing well. Let's turn to page five. Some high-level financial numbers. Revenue up 55% to AUD 143 million.
EBITDA up 59% to AUD 20.6. Normalized EBITDA is AUD 22.9, up 77%. Net profit after tax is up 70%. Operating cash flow is down 8%, mainly as a result of carrying additional stock and increased receivables. Total assets now are AUD 416 million, up 50%. Let's turn to Ben. Our CFO will take it from here.
Thanks, Simon, and hi, everyone. As Simon highlighted earlier, we have noted a strong first half result where, despite difficult trading conditions, DGL has been able to prosper and successfully integrate our two recent acquisitions. First, however, I would like to take the time here to recognize the tremendous effort of all of the employees across the group. Their passion and commitment has allowed DGL to achieve these results that we have the pleasure of releasing here today. Turning back to the presentation, pages seven to 10 outline the financial detail of the results. I will talk through each page, starting with group performance. Turning to page seven. The group has reported full first half revenue of AUD 143 million, 182% up on statutory prior comparable period. Following on, EBITDA is also significantly up.
The group has achieved first half EBITDA of AUD 23 million before the deduction of any acquisition costs. This is 141% up on the statutory prior comparable period. Over the last six months, there's been strong revenue and EBITDA growth across all three operating segments with both organic and acquired business contributions. A portion of this increase in statutory revenue and profit is also due to the contribution of the Chem Pack acquisition made on 1 January 2021. Unlike the pro forma results presented on the next page, the statutory results do not include any contribution from Chem Pack or any other acquisitions. Touching on some drivers behind this growth, we are continuing to see strong demand for our chemical manufacturing products and services.
Part of this in response to the global supply chain issues and onshoring, but we've also seen growth due to climate conditions. We're having the distribution assets continue to be well-utilized. Environmental, despite the challenges of this past, the segment recorded strong converting of building scrips to sales. In summary, and so far, we've largely been able to navigate the supply chain issues. We have been able to successfully procure, manufacture, and supply our customers with the products or services they need. On the cost across the group, as we've increased in scale, our workforce at sites and administration requirements have also grown, increasing the related costs.
As well as the increase in the scale of the group and similar to most other businesses in Australia and New Zealand at the moment, we've also seen cost increases due to COVID, workforce pressures, and price rises over the past six months, offsetting some of the gains made elsewhere. I bring your attention to depreciation and amortization. Of the AUD 7 million, AUD 3.9 million relates to the depreciation of property, plant, and equipment. The AUD 3.1 million balance being the AASB 16 depreciation of operating leases. Overall, we are pleased to have achieved first half net profit after tax to the group of AUD 8.5 million. That is 185% up on the prior comparable period. Turning to projects.
Here we summarize the first half results and compare these to the consolidated performance of both DGL and Chem Pack over the past three years. These performance summaries have previously been provided in both the DGL IPO prospectus and previous DGL results announcements. The graph outlining sales revenue at the top left shows the organic revenue growth of 29% over the first half to achieve sales revenue of AUD 120 million. First half acquisitions contributed a further AUD 23 million of sales revenue in the first half. We expect an increased contribution from the acquisitions in the second half following a full six months of trading. The group's EBITDA has grown to AUD 23 million, a significant increase on the consolidated DGL and Chem Pack AUD 13 million achieved in the first half of 2021.
As well as the increase to the absolute number, our EBITDA margin has also increased to 16% during the first half. The pie chart in the top right shows a reduction in concentration of our largest customer to approximately 10%, down from 19% at the time of the IPO prospectus. The second pie chart also highlights the increasing diversification of DGL's revenue. On to page nine. There has been considerable growth in the group's balance sheet over the past six months. Total assets have grown from AUD 278 million at June to AUD 417 million as at the end of December. We're seeing material increases to receivables and inventories. As we've brought in the working capital requirements of the acquisitions, but also due to an expected seasonal build in the general trading environment.
A strong last quarter has also contributed to the increase in receivables. There has been a corresponding growth in trade payables, which has partially funded some of this increase to receivables and inventories. There's been an AUD 45 million increase to property, plant and equipment. Much of this increase relates to acquisitions and property purchases. Of the balance, AUD 2 million relates to growth CapEx and AUD 3 million relates to maintenance CapEx. With respect to the seven business acquisitions, there has been an AUD 58 million increase to intangibles. The increase in working capital, property, plant and equipment and intangibles have been funded through the premiums and IPO cash raised and scrip issue. We closed the first half with net assets of AUD 259 million. Finally, cash flows on page 10.
We delivered operating cash flows of AUD 15 million in the first half, up from AUD 8.5 million on the statutory prior comparable period. However, as Simon noted earlier, as a result of the increased working capital requirements, the conversion ratio is slightly down on the prior comparable period. I expect this ratio to return in the second half. There's been AUD 41 million of cash outflows related to acquisitions and AUD 21 million of outflows related to property purchases or developments. We drew AUD 30 million from our term facilities during the past six months. These facilities have an effective interest rate of 2%. After the AUD 12.5 million of trade finance used at the end of 2021. Overall, across the group, the group cash outflow was AUD 28 million and a closing cash balance of AUD 15 million.
In summary, we've achieved strong financial results in the first half and are well- positioned heading into the second. As previously announced, we've upgraded our estimated revenue and earnings guidance to forecast full year revenue of approximately AUD 343 million and forecast full year EBITDA before acquisition costs of AUD 54 million. Back to you, Simon.
Thank you very much, Ben. Now turning to page 12. DGL is very much on a growth path. We work in fragmented industries and in a fragmented marketplace, and it is our intention to acquire more companies to become Australia and New Zealand's largest vertically integrated full-service chemical management company. We are seeing the benefits of this commercial structure in our impressive numbers. We have a strong balance sheet and we have a number of acquisitions in our sights that I hope to be able to announce to the market in the coming months. We are extracting significant additional value out of our or return out of our existing asset base.
We're able to cross-sell between the various segments of the business and service our broad existing customer base with more services and over a wider geographical area. Let's turn to page 13. Property and projects. We have a strong focus on organic growth as well as acquiring new companies. We have a number of property and plant projects currently under development across New Zealand and Australia. We have a number that are in the planning stages and still to be signed off by the board, but will support strong organic growth in the months and years to come.
We are developing our facility in Townsville and Hawke's Bay in New Zealand and in Christchurch, and are significantly adding to our capacity and services that we can offer our broad customer base. Some of these projects have been held up with some COVID delays, but all in all, we're very happy with the progress. Let's turn to page 14. Health and safety and environmental. DGL is a chemical management company. We deal with chemicals. So obviously being a safe and well-managed company, ensuring the safety and welfare of our good staff is very important.
We've appointed a health and safety director and have started to roll out a well-developed e-learning platform that I think will go a long way to giving us the best possible platform to ensure safety across all our operations. I can report that there have been no significant events, health and safety or environmental, in the last six months. Let's go to page 15. This is further to Ben's summaries and details on our financial position. You'll see here our prospective forecast revenue of AUD 210 million now upgraded to AUD 343 million. Our prospectus 2022 EBITDA of AUD 29 million now upgraded to AUD 54 million. DGL is continuing to perform very well and growing strongly.
I would like to take this opportunity to thank all the good people that work for DGL. It's been a tough six months. We've had COVID, we've had supply problems. It's been brutal, but they've all stood up to the challenge and the company has prospered, and I bow before them and appreciate their hard work. Thank you. Let's have some questions.
Are you there, Ben?
I'm here, Simon. The first question we've received has asked what organic revenue growth rate is assumed in the second half revenue forecast.
Ben, do you have that breakdown?
We've assumed a similar rate to the first half as well as contributions from our acquisitions, having a full weight in the second half. We expect relatively good trading competition to continue on the back of good climatic conditions. We expect our warehouse and distribution assets to remain well-utilized. To that extent, we expect that growth to continue at the rate that it's been on. Do you have anything you want to add on that organic revenue growth, Simon?
No, I look to the history of DGL and our analysis shows that 45% of our growth has come from organic and the balance from acquisitions. I don't see any reason for that balance to change in years to come.
The next question we've received is, when do we expect working capital to normalize back to historic levels by June? I'll probably take that one, Simon.
Certainly.
We are heading into a peak production with a big part of our business and as that we are growing our inventory quantities ahead of that sales period. Some of the inventory values have also grown on the back of increases to the raw material pricing. We do expect to unwind some of that inventory on the way back through to June. We do expect our receivables to fall back down to June. I guess with respect to normal, we've grown in size and scale, so we probably look at inventory days and dealer days now as opposed to an absolute number, and we do expect those to come back down as we head back towards June.
Ben, if I could add to that the COVID crisis and the escalation in the cost of commodities and raw materials is causing major headaches for a number of our competitors. This in fact plays into our hands because we have a strong balance sheet, and we're able to buy commodity to supply our customers and formulate where our, some of our competitors can't. Although that is tough going, we are prospering in this environment because of the way the business is structured.
Next question. We've had the question, what impact, if any, has the stronger lead price had on the EBITDA results?
Well, it's been positive, if you can find a ship. Therein lies the problem. Trying to export containers anywhere in the world now is hard work. Getting pallets and empty containers and getting ships that can transport lead to our various customers abroad is a real challenge. Yes, the lead price is good and has helped us, but you need to set that up against the struggles of shipping.
Yeah. I'd just like to add to that as well. We've also commissioned a smelter in June. That smelter allows us to convert some of the goods into higher end high value products, which we've been able to ship through this period as well, which has also contributed to our positive result in environmental.
Let me add to that, Ben, that the whole philosophy behind DGL is to stay agile and nimble and to respond quickly to any market challenges that might come about, from time to time. This kind of philosophy is putting us in a very good position through these challenging times.
Just on the note of, challenges and raw materials, we've also had a question through, can you talk through the impacts of the AdBlue supply issues and what impact it has on the company?
Well, I had one speech planned yesterday, then I watched the news when I got home, and I watched the urea price skyrocket through the night as the result of Russia's invasion of Ukraine. I would expect that you will see continuing turmoil and urea and all sorts of commodities. Frankly, it's too hard to predict where they'll go. Gut feeling, it's not gonna go down anytime soon. We've got significant stocks. We've probably got the largest stock of technical-grade urea in Australia, and we've got strong forward orders. I think DGL is in a very good position to supply the Australian and the New Zealand market with formulated AdBlue for months to come.
Thanks, Simon. We had some questions that are of a balance sheet nature. The first one is how much headroom do you have on the borrowing facility? I can probably take that one. As at December, we had used approximately 75% of our current facility. We have a good working relationship with our bank, and we'll continue to work with them to extend our facilities as we require additional debt funding.
Ben, could I ask you to explain the ratio of our current debt to our publicly stated idea that we would be comfortable to see debt to go to 3x EBITDA and no higher?
Yeah. I guess to that extent, we do have a covenant with our bank, and we do have an approach that we're comfortable to go to 3x EBITDA. Our ratio over the trailing 12 months is approximately, as at the end of December is approximately 2 . We do have plenty of headroom left in that covenant and that, we do have plenty of capacity there should we require it. The next question. Oh, sorry.
Sorry. For the sake of the listeners, I think our current debt is approximately 1x EBITDA at this time. Is that correct?
No, it's 2, Simon, 2.
2x at this time.
Yeah.
Thank you.
Two follow-up questions to long-term strategies, Simon. In the long-term strategy, when will DGL be considering paying dividends of any size?
On record, and I believe that for the time being we will continue to invest our earnings where we can see good growth opportunities and acquisitions. Should it ever come to pass that we run out of these targets or projects, then we will start paying dividends then. We can talk quite bluntly about this, there is considerable opportunity out there for us for years to come to grow strongly. That's where the earnings will be invested at this time.
A question of a similar note: Will DGL be issuing more scrip for future acquisitions?
Yes. We've been successful with the strategy of using earnings, some debt and some scrip for acquisitions, and I expect that template and approach will be used in future acquisitions.
Finally, the question: What is the outlook for capital expenditure in the second half of FY 2022? Any reason that wouldn't be similar to the first half?
Ben, do you have the numbers there?
At a high level, we expect a slight increase in capital expenditure in the second half. We have some capital projects that we expect to dig into in the second half, for want of a better term. We do face some delays from time to time, though, with respect to supply chain and getting the material or the plants and equipment that we require for those projects. We are continuing to evaluate as we go, and we remain pragmatic with respect to some of those projects.
There is a question here from Bell Potter.
Yes. What is our M&A timeline, or pipeline look like in the next six months?
I'm going to simply say highly active.
Okay.
There's plenty of opportunities out there for us.
Okay. At this stage, that concludes the questions that we received.
Any further questions?
None further at this stage.
Thank you very much for your time and thanks for dialing in.
Thank you, Simon and Ben. That concludes today's call. Thank you everyone. You now may disconnect.