Thanks, Ollie. Hi everyone, welcome to Duratec's Full Yearly Results Presentation, including the business update and outlook on all sectors and companies. Firstly, at our business history, we get a snapshot of our growth since inception. I'm very proud to report that in FY 2025, we achieved revenue of $573 million, up 3.1% compared to FY 2024. This was predominantly driven by an outstanding performance across energy and emerging sectors. Our CAGR continues at a strong level of 32.2%. In September 2024, we acquired the business of GF Engineering and consolidated all of WPF operations into the 12,000 square meter facility in Naval Base, WA. In February 2025, Duratec Limited acquired the business Asclear Pty Ltd, which provides industrial blasting and solid coatings in Moorabool, Victoria. Shortly following year-end, Duratec also acquired 100% of the shares in ZIG Australia, which I'll talk to later in the presentation.
The key business drivers remain strongly active in all key market sectors, and the group had a solid start to FY 2026. This slide shows our updated portfolio, which highlights our current footprint across Australia and the key market sectors and locations in which we operate. Importantly, the company's strong performance in FY 2025 positions us well and provides us with the confidence to continue to pursue strategically aligned expansion opportunities over the near and long term, ensuring sustainable profitability and shareholder returns. Of particular note is our ambition to expand WPF and EIG into the Eastern States using our established offices and network. Turning now to performance, as mentioned, revenue delivered in FY 2025 was $573 million, the highest revenue in the company's history. Normalized EBITDA is a record result at $53 million, and importantly, the overall EBITDA margin improved to 9.2% compared to 8.6% in FY 2024.
The EBITDA result is up 11.3% on PCP, and ultimately, we have increased NPAT to $22.8 million, which is up 6.5% from last year. Earnings per share rose to $9.1 million, up 5% on FY 2024, and the board has declared a fully franked final dividend of $0.025, bringing the total dividend for FY 2025 to $0.0425, which represents an increase of 6.25% from FY 2024, which the board believes represents a good balance for retaining funds for growth and providing returns to shareholders. Our balance sheet remains strong with a cash balance of $84 million, able to support key growth objectives. Our order book is healthy, tenders and pipeline remain very strong. I'll go into this in a bit more detail later in the presentation.
Before I hand over to Ashley Muirhead, who will speak to the full year financial result, I would like to take this opportunity to thank all of our employees from our 19 locations across Australia for all the hard work and effort that went into achieving this year's results.
Thanks, Chris. Good morning, everyone. Duratec had another strong full year result with revenue of $573 million, which not only represents a record revenue result for the group, but also underscores the effectiveness of our diversification strategy between sectors. The energy sector achieved the highest revenue to date of $82.5 million, which is an increase of 77% compared to the prior year, and was primarily due to the continued expansion of WPF through the business acquisition of GF Engineering, which increased capability through larger facilities and direct access to key energy sector clients. The emerging sector, which is also disclosed as other segment in the segment note, also achieved record revenues of $60.6 million in FY 2025, an increase of 175.5% from the prior year, and was predominantly due to infrastructure and mining projects undertaken in the year.
Defense and mining and industrial sectors both had lower levels of revenue compared to the prior year. The defense sector reported revenues of $181.4 million, which was 17.6% lower than the prior year, and was due to delays affecting the timing of awards, particularly within the Estate Works program. However, these developments position the sector well for FY 2026. Mining and industrial sector also experienced delays, with the sector achieving revenues of $136.6 million in FY 2025, which was 12.2% lower than the prior year. However, with strategic focus on master service agreements and in-unit contracts, the sector outlook in FY 2026 remains positive. Gross margins achieved for FY 2025 were strong at 18.6%, resulting in a gross profit of $106.3 million for the year.
This improved gross margin from 17.3% in FY 2024 demonstrates our ability to convert revenue into stronger bottom-line results, with the improvement due to an increase in self-performed projects and projects secured through our ECI model. Normalized EBITDA was $53 million for the year, a record result for the group, representing an 11.3% increase compared to FY 2024. This was attributable to the higher project profitability and increased contribution from the DDR Assuria Group. DDR Assuria had an outstanding result in the year, driven by the defense Phoenix portfolio and the continued success of DDR's wholly-owned subsidiary, Ashley Constructions. The contribution from DDR via share of net profit after tax and dividend amounted to $3.8 million, a 76% increase compared to the previous year.
Overhead rose in FY 2025 due to strategic investments aimed at supporting future growth, including the relocation to larger facilities by WPF operations following the acquisition of GF Engineering, business acquisition costs, and tendering expenses. Additional investment was allocated to the improvement in business systems to enhance future operational efficiency. As a result, the net profit after tax margin achieved in FY 2025 of 4% was slightly higher than the prior year. Earnings per share climbed to $0.091 from $0.0866 in the prior year, and the final dividend declared of $0.025 takes the total dividend for the year to $0.0425, and with a per ratio of 47%, it ensures the group continues to provide the balance between returns to shareholders and retaining funds for growth. FY 2025 ended with a solid cash on-hand balance of $84 million due to strong operational cash efficiency, with cash conversions of 98% being achieved during FY 2025.
This provides an appropriate cash balance to commence FY 2026, as it will allow funding for strategic growth investments, shareholder returns, and maintaining necessary working capital facilities. Investing activities in FY 2025 included $14 million of investment in capital expenditure and $3.4 million in business acquisitions for GF Engineering and Asclear Pty . Duratec also paid $9.4 million of dividend to shareholders during FY 2025. Duratec's balance sheet continues to strengthen with net assets increasing by 25.7% in the year to $74.3 million. true vetters continues to be low risk based on customer profiles and well managed, with a decrease compared to the prior year signaling efficient collection of receivables. Property, plant, and equipment increased due to additional equipment and vehicles to support future projects, as well as the equipment from both business acquisitions.
High-to-based assets and the related property lease liabilities increased in FY 2025 as a result of our continued expansion and growth. Borrowings also increased in FY 2025, mainly due to asset financing for plant equipment and vehicles, and a short-term cash advance facility that was used to support upfront procurement purchases. During FY 2025, Duratec had successful negotiations with the Commonwealth Bank of Australia and bond providers to increase facilities by 69% to $294 million from $174 million at the end of FY 2024. With 64.8% of available headroom at the 30th of June 2025, Duratec is well positioned for the continued growth of the company. I will now hand you back to Chris to cover the operational highlights.
Thanks, Ashley. In FY 2025, our total headcount grew to 1,265 employees across Australia. To further support the Eastern States teams and strengthen onsite engagement across the region, we established a local people and culture presence in our Sydney CBD office. We also conducted a company-wide employee survey, the findings from which are guiding our initiatives into FY 2026 to further enhance our employees' workplace experience. Safety culture remains our highest priority and is key to creating an environment where we can deliver successful projects. Our PLA indicators in FY 2025 increased, and in response, targeted programs, including leadership training and scaffold awareness, were implemented to reinforce the safety culture and support our commitment to a safer, healthier workplace for all. We also prioritize musculoskeletal risk awareness and have partnered with SOTA Analytics to leverage AI to build a database of at-risk activities and role-specific physical demands.
Duratec remains focused on a sustainable future and will continue to identify opportunities and innovations that enable us to act sustainably while supporting the needs of our employees and clients. On to our defense performance and outlook. The defense sector delivered revenue of $181.4 million and a gross margin of 13%, up 2% on last year, reflecting discipline, cost management, and operational efficiency. The sector's ability to sustain profitability amid a shifting project landscape underscores its strategic focus and operational adaptability. During the year, we successfully completed the majority of the five-stage Coot Warra redevelopment project, with the remaining works to be completed by the end of Q2 FY 2026. The Duratec ERTEC joint venture was awarded two early contractor involvement (ECI) head contracts for the planning phases in Q2 FY 2025 for critical infrastructure projects at HMAS Stirling. These two ECI contracts remain on track for construction award in Q2 FY 2026.
As previously announced, the works involved the planning for the provision of the fit-for-purpose nuclear compliant facilities to support the expansion and enhancement requirements of defense's infrastructure upgrades at HMAS Stirling to support the U.S. and U.K. rotational force being based out of HMAS Stirling, which is scheduled to commence at the end of calendar 2027. Other long-term opportunities remain a key focus, particularly in fuel and marine infrastructure. These potential projects value at more than $15 billion program for delivery between 2028 and 2032. These works align with Duratec's demonstrated strategic growth, which is underpinned by its national resourcing model, financial strength, and a proven ability to deliver large-scale defense infrastructure programs. Other opportunities with defense also remain very strong around Australia. On to mining and industrial where you can see we achieved revenue of $136.6 million and a gross profit of $27.8 million.
The successful completion of the BIRTH C&D project earlier in the year, together with delays in the timing of awards on a number of high-probability projects, impacted sector performance. Highlights through the year include the award of the $44 million structural integrity project for Rio Tinto and the award of two major three-year term contracts with Newmont Bonnet and Gold. Also of note is multiple contract awards with Border Stew whilst we work towards a fixed plant master services agreement. M&I also expanded its footprint with Roy Hill in the Pilbara East, where current site activity is valued at $3 million annually. Plans are underway to scale this into a port MSA covering both port and inland operations. Opportunities across South Australia, Queensland, New South Wales, and Northern Territory significantly enhance the company's presence with the sector and will continue to drive growth into the future.
Through our strategic focus on master services agreement and annuity-style contracts for key clients such as Rio Tinto, BHP, Newmont, and FMD, and leveraging off our in-house experience and client relationships, the sector outlook into FY 2026 remains positive. Moving to building and facades where we achieved revenue of $111 million and a gross profit of $20.6 million, the financial performance reflects our strategic focus on broadening our service offering and leveraging our expertise in both remediation and new construction projects. We continue to strengthen our market position through the use of in-house digital engineering capabilities. The B&F team focused on early contract involvement and designing principle approaches, which enabled more efficient planning, fabrication, and installation across key projects.
Leveraging building information modeling (BIM) to support early design development and offsite fabrication in a Perth workshop, our Darling team streamlined its delivery on the NT Art Gallery project, reducing onsite risks and improving project program certainty. We also delivered two high-profile heritage facade rectifications in South Australia and ACT, namely the Adelaide Town Hall and the National Carillon in Canberra, both of which were award-winning projects. B&F enters FY 2026 with strong momentum and a healthy pipeline. Continued strategic focus on ECI is providing a growing number of live opportunities, including two major facade rectifications projects in Perth and Adelaide. Our national footprint, our integrated delivery model, and our in-house technical expertise continue to resonate with our clients managing multi-region portfolios, enabling us to offer consistent, high-quality outcomes across both remediation and construction. The demand for our strengths positions us extremely well into the future.
Now looking at our energy sector, which delivered revenue of $82.5 million, an impressive 77% increase on last year's performance, with a gross profit of $23.9 million, 56.2% up on FY 2024. We successfully continue to target and deliver energy sector projects nationwide, including onsite works at Inpex facility in Darwin, critical project work for Santos, which I will mention under the WPF update, and the delivery of critical fuel infrastructure projects with the award of the Western Sydney Airport Cargo Fuel Line. During the year, we also saw the award of Duratec's first direct contract with Woodside Energy Ltd, the $21.8 million King Bay supplier-based wharf refurbishment project located at the port of Dampier WA, demonstrated a significant step towards building a solid relationship with Woodside.
Further momentum came from Duratec's inclusion in APA Group's four-year national fabrication services panel, including a one-year extension option, expanding the company's footprint in Darwin and reinforcing its fabrication capabilities. The acquisition of Asclear, completed on the 24th of February 2025, adds industrial blasting, specialized coatings, and hazardous materials remediation capabilities to Duratec's portfolio in Victoria and aligns with the company's broader strategy to expand its footprint and support energy sectors projects in the Basque Strait. With a focus on geographical expansion, Duratec will continue to leverage cross-subsidiary synergies with its combined energy client base. We anticipate this sector will continue to grow strongly in FY 2025 and will maintain our selective approach to acquisitions. Now moving to the emerging sectors to close out our sector-based performance and outlook.
Our emerging sectors, which include marine, transport, and water infrastructure, delivered revenue of $60.6 million, up 175% on FY 2024, and a gross profit of $10.5 million, up 288% on last year, with a gross margin of 17.3%, which was also up. The significant uplift in financial performance was underpinned by strong revenue growth in the marine and water infrastructure, particularly on the East Coast. Our strategic decision to leverage Western Australian marine capabilities nationally through a unified sector structure enabled us to respond effectively to the rising demand. The 2032 Brisbane Olympics, together with our achieving B2 road certification in Tasmania and Victoria, enables us to pursue bridge remediation and integrity programs, while further investment related to the Brisbane Olympics will drive demand for asset rejuvenation and remediation in the Olympic corridor.
With a strong pipeline, proven capabilities, and a strategic national structure, Duratec is well positioned to deliver sustained value in FY 2026 and beyond. During the year, MEND relocated to a new office and purpose-built laboratory facility in East Perth, increasing its capability to deliver for existing and new clients. MEND's strong digital capabilities continue to drive growth in new and existing markets and cement Duratec's reputation as an industry leader in early contractor involvement. In FY 2025, MEND commenced a 3D reality modeling campaign for Flindersport. This involved the capture and delivery of multi-format three-dimensional digital representations of assets to allow for future analysis and maintenance planning. MEND also won its first project in the Bass Strait, Victoria, conducting testing on a concrete gravity-based offshore oil and gas platform, which underscores our expertise and the way that MEND provides early contractor involvement opportunities for the group.
MEND continued to excel in the mining sector with the delivery of structural integrity inspections across the Pilbara in Western Australia. Moving into FY 2026, we will continue our investment in digital capabilities and innovation and expanding partnerships to take advantage of new opportunities across all sectors, with a clear focus on delivering practical value and maintaining high standards of service. We are confident of MEND's ability to support clients' evolving needs and deliver excellent opportunities for Duratec across all sectors. On to WPF, as you can see, an excellent financial performance delivering close to $59 million of revenue and $17 million in gross profit, which is up 77% on last year. The entire WPF Perth operations relocated to a 12,000 square meter facility at Naval Base following the acquisition of the business assets of GF Engineering.
The acquisition formed part of WPF's strategic growth trajectory within the energy sector and included the novation of a fabrication services contract with Chevron. We had two significant project wins with Santos, including the offshore Harriet Alpha decommissioning project, where we leveraged our end-to-end self-perform capabilities, and we also delivered critical infrastructure for Santos' Darwin LNG pipeline duplication project, fabricating and installing the key landside components connecting the Barossa gas export pipeline to the DLNG facility. Looking forward, we will continue to actively explore expansion opportunities within this sector by strategically aligning with the key energy sector clients such as Chevron, Woodside, Inpex, and APA Group. We are positioned to leverage our capabilities and partnership to extend our footprint and reach new markets, mirroring the success we have seen in the Northern Territory. With a focus on decommissioning, we anticipate this sector to grow strongly.
Before I move on to DDR, I'll quickly touch on our recent acquisition of EIG Australia. Based in Canningvale, WA, EIG Australia is an Australian electrical infrastructure provider specializing in fuels and fluid transfer services, including in-house consultancy and design capabilities. This acquisition supports our strategic growth by expanding our end-to-end self-perform capabilities, enhancing our service offering nationally, and provides an opportunity to scale specialist expertise. This will enable us to deliver outcomes across defense, energy, and mining and industrial sectors. The move aligns with our broader strategy to enter critical national infrastructure markets, diversify revenue streams, and strengthen our position in high-barrier, high-value sectors. We're really excited about the capability that EIG brings to our group. We're extremely proud of Duratec's performance in FY 2025, achieving $113.9 million in revenue, up 68.5% on FY 2024, and delivering $22.2 million in gross profit.
During the year, Duratec Group achieved a significant operational milestone, securing its largest contract to date through the award in the first half of FY 2025 of the $54.7 million department of defence contract, which forms part of the Project Phoenix portfolio work in the Northern Territory. RC Construction, which Duratec acquired in January 2024, is now fully embedded into Duratec's offering and contributed to the group's impressive FY 2025 financial performance. Duratec has successfully capitalized on its national presence to expand its operations into the Northern Territory and continues to pursue its goal of increasing Aboriginal engagement through employment and supply chain opportunities for other Aboriginal businesses. Duratec has the strongest work on-hand position at the beginning of the financial year in the history of the company, and this sets Duratec up for an exciting year.
As you can see, master services agreement and annuity-style contracts made up $176.7 million of revenue for FY 2025, higher than PCP at 31% of this year's revenue. This is a large increase in the percentage of revenue generated under MSA annuity-style contracts. We will continue to focus and grow our MSA work with existing clients through diversification of services, as well as adding new clients, particularly in the energy sector. This revenue sits outside of our order book. Now, turning to our pipeline and outlook for the remainder of the year, Duratec's order book remains healthy with $319 million of work on hand and a very sizable pipeline of opportunities ahead. The conversion of these opportunities we see in the very near term, and this will position us for significant growth.
What's not in the order book is the MSA work on the previous slide, along with other variations that we often encounter in our industry when working on remediation projects. We currently are working on eight sizable ECI projects, where should they convert into projects, it would add another $500 million of work on hand. We are confident of converting these opportunities, as well as a number of other tenders we are working on, many of which we are shortlisted for the tender opportunities. Our outlook in all sectors is still extremely bright. In the short term, our healthy order book demonstrates our ability to win many of the small to medium-sized projects.
Our MSA work continues to grow year on year, and we see many more MSA annuity-style contracts populating our revenue as we extend our offering into each sector, particularly the energy and mining space through Duratec and also our subsidiary companies, including WPF, GF Engineering, and now EIG Australia. Works on larger projects include Kunawarra, Woodside, Tom Price, and WSA, all continued through the first half of FY 2026. Our subsidiary company, WPF, and DDR have strong work on hand with a number of good opportunities that lie ahead. We anticipate converting the number of defense and building and facades ECI contracts into actual project works in the first half of FY 2026, with the onsite project works commencing immediately due to the thorough scheduling and planning that is completed throughout the ECI period. The medium to long term is very strong, with ECI contract modeling dominating our future opportunities.
The conversion of ECI planning phase projects into delivery phase at HMAS Stirling will be a key focus, and we will look to place ourselves in a good position to win further work at Stirling and also Henderson, where there are large marine infrastructure upgrades planned. We still have strong tailwinds in the mining, energy, and building and facade sectors, and expect to win further work in these sectors and bolster our order book. Despite any commodity price fluctuation, the maintenance still occurs on all aging infrastructure. We keep abreast of opportunities outside of Australia where our existing clients operate, including Santos, Newmont, Australian Defence, and the Department of Foreign Affairs. We have a demonstrated history of strong organic growth, and we see that continuing well into the future. We are very well funded for future growth.
We continually look for potential strategic acquisitions and have an exceptional team within the company helping us deliver on this strategy. With the above outlooks, good work on hand, a growing MSA base of work, and our subsidiary companies performing well, we have never been so well placed to grow sustainably into the future. That concludes our presentation today. I'll now hand over to Ollie to moderate our Q&A session. Before I do, I just want to thank everyone for their attendance today. Awesome.
Thanks, Chris. Just a reminder to everyone before we get into the Q&A session, if you want to ask a question via the webcast, please click on the blue hand displayed in the top right-hand corner of your screen. Type your question into the dialogue box that appears and then click submit, and we'll endeavor to get through all of the questions.
We've got a couple lined up already. Probably Chris, starting with yourself from a question from Sam Pittman and Taylor Collison. Could you talk through the drivers of growth in the energy tenders?
Yeah. No worries. Thanks for that. Thanks, Sam. Thanks, Ollie, for the question. The energy drivers here are super strong. There's a couple of parts to energy to remember. We've got our WPF and then we've got just the energy market itself. The TAM inside there, just from the maintenance perspective, is about $5 billion. This creates heaps of opportunities. We're a very small part of that, obviously. We think there's a lot to grow in that space. We've got fairly unique capabilities at WPF and GF Engineering combined together with the number of weld procedures we have.
We've seen evidence of that with the work we've done at Santos up in DLNG supporting those sort of skills that we do have, and we think we can grow that. On the WPF side, again, we've got this large workshop area or facility, 12,000 square meters in Perth, and we've also got a large workshop up in Darwin. That allows us to do, you know, it's quite unique to have those capabilities there and then to support the onsite delivery as well of whatever we're building out of those workshops. We've done that. Now we've got all this excess capacity. We're looking forward to growing into that. The key clients there, if we just break it into key clients of some of the drivers, Santos, the work we're doing with them is amazing. They support us very strongly. We support them.
The work that we're generating there, we still see a lot of growth there. We've got our existing customers in the Vermilion space. We've got Inpex that we're growing with as well up in Darwin. They've viewed our workshop facilities and supporting us being a local provider. We also get for our workshop down in Perth, there's a lot of clients coming through there, understanding what capabilities we do have. In the new space, we've got Woodside, Chevron, and APA. They're all relatively new to us. We've got lots of growth drivers there as well to support us. Jumping outside of the WPF offering, energy itself with the fuel transformation programs around the country are quite strong. We'll go into that probably in a touch. I think there's a question coming up about that as well.
We have work at the Sydney Airport, at Perth Airport even, there's a bit of fuel work coming up. DCOM on top of that. The whole decommissioning space in the energy is huge as well. We're tapping away at a lot of spots there. It is quite an interesting and phenomenal space to be in there. We've all done very well and we think we can continue to grow strongly in this space.
Just to stay on energy, Chris, and just to focus on that sector, a question has come in from Marcus Barron from Bell Trotter. Just regarding this energy sector, can you split the $82 million and 77% growth between organic and acquired? As he's interested in the underlying growth, what do you feel underlying growth is? High teens? Or higher? Also regarding margins at 29% at an ongoing level looking forwards. Same question for the emerging sector. I'm just going to stick on the energy. We break that up a little bit. Do you have a split on the $82 million and that 77% growth, whether that's organic or acquired?
Yeah, I think there's a couple of ways to slice that question there in the sense that you go, what we bought was $20 million worth of revenue and obviously with that good margin. We've really pushed that organically. From $20 million up to $80 million, could you say that's organic? WPF's done and we see the numbers there, $58 million, I think, of memory there. In that sense, we've pushed that organically. The rest of that outside of that's delivered through other programs of work that are absolutely organic. If you look at it, it's fairly strong organic. We haven't really added much into it. It's too new. It's not in there in any sense yet.
All of that to me, other than the original purchase of WPF, is an organic push and we get behind it. We've grown it and it's going really well. We still see strong growth ahead. I think the margin space, we've probably answered this once before. We did have 32% margin the period before. It's at about 28%. This is gross margin-wise. We still see that being the number that it should be in 27%, 28%, around that zone for this type of work.
Just to round out that as well, for people who are new to the story, you've got GF Engineering and ANB Welding as acquisitions. They're more of a geographical and strategic move rather than a major revenue move.
They're asset type purchases as well. Being, I think, 1.5% for ANB Welding, 2.2% for GF Engineering, buying the assets of.
In that sense, they're assets we're probably going to buy anyway. It's still a strong organic push story, not that we're taking on any goodwill or customer relationships really at that stage.
Very good. The same question for emerging sector, presume more diverse. That's again for Marcus, just to finish out his last question. The growth, I suppose, has the growth in the emerging sector been organic?
Yes. Yeah, that is correct. They're the things we've always done, right? We're talking about marine infrastructure outside of defense, obviously there, water, wastewater. That sector itself is probably one of the biggest or the biggest sector that there actually is. We've got all the skills to do it. It's maintenance, remediation, it's all the things that we do.
For us to concentrate and grow that, we can grow that quite well because our growth is probably more East Coast orientated in the sense that 80% of the population live there with all of those things that need maintenance and remediation. Yes, it's organic. It will continue to be organic. EIG Australia and other sort of purchases are probably sitting more in the energy space or defense space rather than the emerging sector at this stage.
Good. Very good. Thanks for that, Chris. Shifting towards the MSA styles, we've got a question here from Abraham from Shaun Partners. Looking to find out, can we annualize the second half 2025 MSA revenue of approximately $100 million for FY 2026 expectations? That would leave you with $200 million approximately for the year FY 2026. You've got a number of questions. I'll probably just go through them one by one.
No worries. With the MSA, it is very, I probably won't say the numbers, but we are definitely growing it in the sense we're on, you know, with all of those clients, we say Newmont, the Rios, BHPs, Santos, etc. It is growing and it forms, and what percentage it's going to be of our revenue probably depends on how much of the lump sum or the ECI type projects we're picking up with B&F and defence will probably vary a bit, but we do believe it's a growing volume number. Annualizing, that's probably up to other people to do. It's probably not a bad way to go considering there's a fairly strong pattern behind us of what we've achieved and done. We're targeting hard that area too, right? In the sense of mining, obviously that's come off a little bit, but the energy space is growing a lot.
The math's probably there to do those types of things, but we are concentrating on it.
Okay, very good. Moving on from MSA into defence, another of Eb's questions is, any new color around the two ECI head contracts at HMAS Stirling in the West and WA? Is there a risk of delays into the second half of 2026? He's also got a question related to that with regards to, does the $500 million of ECIs you're working on include the Garden Island project? Maybe we'll focus on the two ECIs first and then we can get to the two head ECI contracts at HMAS Stirling.
In general, the ECI works, that's basically split up between building and facades. We're working on a number of them. There's probably five odd ones there. They're quite significant, totaling up to $200 million.
They're in various parts, like some of them we think are going to be adopted pretty soon or converted soonish. The others probably take a little bit of time to roll out. They're generally a six to nine-month investigation or ECI period. Over to defence, yes, those numbers are in there. That is looking at that where 90%, the 90% design's come, that's been priced. It's due for construction award second quarter of FY2026. Do we see slippage? We don't. People are telling us it's not going to be slippage. It's quite a strong timeline to achieve. This is based around, for those, or the background of it is it's about the rotational force coming to Perth housed in HMAS Stirling. The commitment's fully there. It's happening. Everything's due to kick off at the end of calendar 2027.
This work that we're circling is all to do with supporting that infrastructure, building the infrastructure around supporting that rotational force. Living in Perth, you see this, it's on the news every night about just all the apprenticeships that are going out there. We've tailed into the $20 billion spend at Henderson too, which is just across the road from HMAS Stirling. There's a lot of action going on around there. It has to happen. It will happen. It's just the timing of it. We don't dictate the timing, obviously, but there's pretty strong demands to get this going.
Very good. Kind of sticking with that with regards to the timing of that award. I think previously we spoke about consensus. There was a consensus out there and a consensus of $60 million EBITDA for FY 2026. Eb's question is, can you provide comments around FY 2026 EBITDA versus earlier consensus?
He used the word guidance, but I'd call it consensus because we haven't given guidance of $60 million FY 2026 EBITDA at the FY 2025 guidance update. Just a question around that. Is there any allocation to the two HMAS Stirling ECI contracts in the EBITDA bridge from FY 2025 to FY 2026? A long-winded question, but we're talking about probably the consensus that's out there, Chris, and then the ability to, the comfort with that and what HMAS Stirling ECI contracts, how they impact that.
Yes. I think in short, yes, we have a bit of that into the $60 million, to agree with consensus at $60 million. Not all of it is sitting there as that. We're trying to bridge, I guess, and try to get to the crux of the question, I think, which is to go, how do you get from $53 million to $60 million?
There are a few pathways to do it, right? The ECI can get you there, converting the ECI into a project for those two projects we're talking about. That's probably the easiest way to do it. We've also got other bigger programs of work sitting around in the energy space, in the building and facade space, etc. There are a couple of pathways to do it. People are probably analyzing the order book, the MSAs, etc. If you probably dissect it a bit, there's a bit that we need to win. We've got a lot of, I say, irons in the fire, and they're all probably there as we've described. We can see ourselves getting to there via winning some of those jobs. There's a bit of them in there to get to the $60 million. I think that has answered it. If not, please ask again.
Yeah, I feel like that's covered off to this comfort with that 60 and a few ways to get there. I think that that probably covers off EBITDA's performance and the questions based on operations. Ashley, probably one for yourself here. He's noted employee expense, other category was up roughly $9 million year on year in FY 2025. Could you provide some color to that?
Yeah, sure, no problem. Overall, employee benefit expenses went up $9 million for a variety of reasons. One of the main ones would be tendering expenses. Obviously, a lot of investment going into future growth, business acquisition costs. A lot of our employees dealt with the business acquisitions and the due diligence. Business system improvements is also handled in-house internally. We're also positioning for growth going forward. Hopefully that gives, you know, some clarity over the increase in employee expenses.
Very good. Thanks for that, Ashley. Chris, back to defence. I might maybe take this question and you can add on to it, but Eric Rhodes from Morris is at, or mentioned that we've highlighted the opportunities in the defence fuel transformation project. Can you discuss the scope and status of that work? I suppose for anyone listening, Australia as a country, we have limited fuel reserves. This is what the lever and the driver in this space is that defence are obviously part of. If we got cut off from the world, we'd have 33 days of diesel or jet fuel kerosene within our country. When you look at that from a defence perspective, they want to protect everything that they have with regards to fuel capability. What does that mean for us? It means infrastructure upgrades. It's where we work. It's what we do.
We've obviously delivered Tyndall, the fuel storage tanks at Katherine up in the Northern Territory. One project that we have spoken about is the Learmonth tanks, which is pretty much a carbon copy of Tyndall, but done in Learmonth in Western Australia near Exmouth. That's a tender where the documents have just come out. We're looking at those documents and we will tender. Obviously, we've been in a very strong position. We'll be tendering in a strong position because of our capability of what we've delivered, our in-house experience, but also the fact that we've acquired a business like EIG Australia who specialize in fuel and liquid transfers. Having them as part of our team internally is a really strong positive piece for us.
Not just Learmonth, right across the country, there's going to be many opportunities where you'll have probably those small to medium fuel upgrades and fuel refurbishments for anything from fuel storage tanks to handling systems and pipelines. It's probably a really good space for us, Chris.
Yeah, I think that's covered it off well from my perspective as well.
Very good. Just on probably on EIG Australia, I think we've had a question here from Michael Mennell. When acquiring companies, what ratios metrics are you willing to pay? An example, PE ratio or EBITDA ratio? That's probably a good segue from EIG Australia. Chris, just any comments?
Yeah, we do. Like that can, because there's a multiple pathway to earn out this, it can be anywhere from high twos to low threes. That's probably where we sit on a lot of these acquisitions or like to sit.
That's probably pretty buying at a pretty good rate. We've had a history there of buying things like GF Engineering and Asclear as, you know, close to bargain purchases where the assets are worth what we're paying. They don't come around that often. I think the threes to fours are good numbers to be at, but it's probably more so around what it can do to us into the future. When we look at that, what EIG can do in the fuel space and electrical space is push us into places we haven't been. We do know EIG well because they've been in our supply chain for some time, delivering work at Oxley. We did a fair bit of work with them there and other defense projects as well as mining too. They do a bit of work at Rio. We love what they do.
We think with our balance sheet and our footprint, we can grow it very strongly organically from here with not that much investment either, by the way, because it's generally around people, systems, procedures, etc. They can leverage off our footprint and our skills. That's probably more about what we're trying to do with our acquisitions going forward. Metrics are always there, but we think, you know, one of our other ones, we want to pay things off in two to three years. Depending on how quickly we can grow it, and we've got a proven track record of that as well. That's how we view it. We might step out and pay a little bit more for something if it really makes strategic sense. At this stage, we haven't had to do that because we still are a very strong organically growing and pushing business.
You can see that by our tender section being at $1.65 billion. Obviously, when we convert what we want to convert out of that, we've got to make sure we've got our eyes on that as well.
Just staying with acquisitions, Stephen Mav from Comas Investments has asked a good question. Given the acquisitions that have been made over the past few years, are you happy with the level of top line growth for the total group and the lack of growth in the order book in the past year? Could we be focusing on bedding in the newly acquired companies and making sure these are adding value before we consider any further acquisitions? It's a two-part question. Happy with the acquisitions and the growth that added and, you know, focusing on bedding them into the business as well.
A couple of things there. Are we happy with the growth?
No. Like for me, that just hasn't happened through timing. No fault of really anyone, but we do perceive that. You can see we probably haven't converted everything we want, but the ones ahead of us are super important and very good because a lot of them are ECIs. We think we can embed the growth and it spots out pretty straightforward. I think in the numbers, in the sense you go, defense and mining have come off a bit, but, you know, strangely enough to me, they're still two of our best sectors, particularly defense with everything I've spoken about. We are happy with the acquisitions and they do.
We can give them, like if we invest in the people that have come with that acquisition and that's very important to us from a culture perspective and add a bit of support from our side, from the Duratec side, they have grown really well. We are happy with their growth rates. If you look at WPF taking it from circa 20 to circa 60 in a couple of years, that's great. We can, and we still think we've got a fair bit ahead. EIG, we think, you know, we've got the right group of people that are inside that business. We think that can do that. The GF Engineering, Asclear ones are a bit on the smaller end and embed into some of those existing companies as well. From the acquisition space, we're actually very good at that.
Where we want to get back to, and it's not back to because we've always concentrated on it, is winning, converting some of those tenders to our existing sectors of defense and mining particularly. Just to touch on B&F, like we have invested and spent a bit of money in a lot of ECIs and we're in those ECIs now. We're seeing that being supported. We can see where those sectors are going well as well as the acquisitions. That's probably when we're, as a company, in the good space. The return to that will be some pretty strong growth numbers. That's what we're targeting. That's what we're trying to do.
Very good. Thanks, Chris. I've got a question, a couple of questions actually from Anthony Shields. First question being, Duratec used to report on percentage of workforce that is Indigenous. I can't seem to see that reported this year.
I can probably take that one, Anthony. That's actually, it's on page 36 of the annual report in a call out. Our percentage of Aboriginal and Torres Strait Islander people within the business is 3.16% for Duratec. It's an area that's very important to us. We obviously own 49% of DDR as well. We do a lot of work in working with our Indigenous Aboriginal and Torres Strait Islander with Hutchinson and Co. Within Duratec as well, we have our own reconciliation action plan, which we are focusing on delivering year on year and improving that engagement and making sure we have engagement at community level as well as pathways for Indigenous people. It's a very important piece for us, but it is there in the annual report on page 36 in a call out. Anthony's second question, Chris.
TRIFR, which is the Total Recordable Injury Frequency Rate, is 5.8 this year per million hours and was 2.7 last year. Can you please explain the jump?
That hasn't been a highlight for us, obviously, at 5.8. We have concentrated programs out there working on that. Encompassing into that is our whole subcontractor network as well. As we take on projects and we use a subcontractor network, those figures come to us and present different types of challenges versus your own workforce itself that are directly employed. We are not happy with that. We think we can drive that down. We've called out a few programs of work that we're working on. The LTI rate is effectively one, by the way, that gets us to number 0.3. If you're from those that understand that, it's how that works, but it's a one incident that's occurred.
Within there, we've got to still categorize and things that sit outside there, the near misses that probably don't report up into those stats, they're ones we're working hard on as well. We do have some pretty strong targeted campaigns on that. Of recent, because that's a rolling number, we've had a couple of better results coming through. We think we're already having a bit of an impact or an effect on that.
Very good. Thanks, Chris. I've got five more questions. I'm conscious of the time. We're trying to get through them as quick as we can. Question for you, probably Ashley, from Justin Vermeersch. Hope I got that pronunciation right, Justin. Significant cash balance building on the balance sheet. Do you see opportunities to repay short-term borrowings, share repurchases, increased payouts, or acquisitions? How would you rank the attractiveness of these options?
Thanks, Ollie. Yes, I can confirm since the 30th of June, we've actually paid $10 million of the cash advance. That's been repaid. We've obviously purchased EIG Australia as well. That's two of the items mentioned. I guess the final dividend is obviously another cash outflow that we'll have along with working capital commitments.
Very good. Thank you for that, Ashley. Just quickly moving on to another question from Eb from Shaun. What % of the order book do you expect to convert to revenue in FY 2026,
Chris? It'd be 95% or so. There's not, if we, you can treat that by exception as well and look at the larger projects that go into 2027, then it's probably Tom Price. There's only a small amount going through there. We'd say 95% of that will convert in 2027.
Very good. Okay, cool. Rachel Rush from Glenmore Asset Management. Rush has a question regarding the two major defense ECIs. You previously mentioned that you may be able to begin early procurement prior to the project award. Has this begun? It's question number one. You've got a second question, but I'll let you answer that first, Chris. The defense ECI is early procurement.
We are embedded in that project very deeply. We've got a lot of people employed where, and as the ECI, like we're actually probably investing, if you could say, people, time, money into that beyond the ECI in the sense that if you do a little bit more now, it obviously pays dividends for the project itself when it goes into construction mode. We are heavily involved with all aspects of that, and it's quite a complex job due to, you could imagine, all the regulations and everything around housing, nuclear-powered subs up on the wharf itself. Without answering it, we are heavily involved with it. We see that as an investment ready for the return of when the project actually goes ahead.
In that time investing in it, has it grown? Was the question?
Yeah, the scope and complexity has, and that's just going to be part of working on something that hasn't been sort of done in Australia. You've got all the designers working away, so things change. We have worked on this project when it was a 30% design, 50% changed quite a fair bit between that, and then 50 to 90 did. The 90 to 100, it's not anticipated to change too much. It has definitely lifted in all of that complexity. It's a pretty, it's an unbelievably exciting opportunity for everyone involved. We've stayed on top of that through the whole way. It's a great project.
Very good. Just on to Rush's second question, during the June 2025 update, you mentioned delays in the award of projects in both defense and mining and industrial. Have these delays persisted?
No, not, so defense not really, because we've spoken about probably the conversion of the ECIs. There are some really hard dates out there that must be met in order to get to have the facilities ready by the end of 2027 when the rotational force are committed to be here. No, we're not seeing anything change since then. There are other programs of work. We probably talk about that one a bit when considering there is that much other defense work. They all go through their processes, tender docs coming out, all of that. We're not getting too caught up in any delays there really. Mining, yeah, there's a couple of things coming up. We're working on every, on all these mine sites all over doing shutdown work or the MSA work all the time. It's just really, we've got our Tom Price going forward.
There's a couple of other larger MSA ones that we want to win. Has it delayed? Not so much, but all mining work will shift to the right a little bit. Having said all that, if that permanently is going on, then you're just dealing with that in itself. We're pretty comfortable with where mining sits, and we've called out a bit of a rebound, and we think that'll occur.
Very good. You're probably going to answer the question I just want to touch on it. Eric Rawlins from Morris, another question. Can you discuss the progress of MSAs in the mining division? Does the lumping of work into larger orders impact the cadence at which these agreements are awarded? Has this led to delays in the MSA being awarded? I feel like you've answered that question by probably that little trend of lumping work together.
That's probably played out a bit, and that's why there's not as much delay. They're lumping it together. If we run back to a macro theme of mining, everything that has been built over the last 15 years tripled the output of all of these miners from the 1970s. We are dealing with asset-rich areas sitting on the water, as in all the wharfs. Then you've got the trains and mines themselves. The mines, by the way, are bouncing around a little bit because of the depth of mine. This is a public probably knowledge thing. They're moving the actual mine around a bit, which has a bit of infrastructure with it. When we see that, they're trying to get, I guess, value for money out of all the maintenance because the maintenance will grow. They collated all together, and then that's what we're trying to get our hands on.
One of the big MSAs, as well as do all the things we've always done, which is all the shutdown works. This work has to happen. It's not something you can delay forever because the infrastructure is extremely important.
Very good. Two last questions. One from Ian Brooks from Cool Tracks. Any plans to expand overseas, especially in the energy sector? Example, of Woodside.
Overseas, yeah, again, we've probably called that out or spoken about that. We would want to follow our clients overseas. We have, you know, I think you can see we've created a P&G entity there. We think between there's some gold miners there, there's Santos, obviously, Australian government. We think that's the best way to grow. There's a couple of other opportunities that present, but it's not a key focus unless a client or customer wants us over there, generally around a specific scope as well.
We're not sort of going there and looking for jobs. We're going there to do a job. That's the way we view it.
Very good. Last question from Marcus Barnard. You've kind of touched on it, but I just think to expand there. EIG, have you worked with them before, which we have, you said that. How closely does their business overlap with our existing? I think we've got a little graphic in the annual report and the presentation that suggests we have some overlap, but they bring us into new areas. The last question, trying to understand the opportunity for Duratec to gain clients' contracts and vice versa. Just a last comment on EIG and maybe you can wrap it up then, Chris.
Yeah, we work with them, yeah, for a long time. A lot of their, they sometimes have the same customer base, but they do different things.
It helps us expand, say, to Rio Tinto in a different area for Rio Tinto, and together we can work strongly to get more things. There is a bit of an overlap, and yeah, I think that chart, as you called out, will clear that up a fair bit. They are working on marine assets, doing fuel, electrical upgrades on some marine assets, West Coast, that we are not on and never would be on. That's all brand new customer, brand new work for us that we think we can still add some value there and grow quite reasonably well.
Very good. Any kind of final words, Chris?
Yeah, just wanted to thank firstly our employees with all the hard work that's gone into the year, subcontractors, our supply chain as well. Thank the shareholders. When I look at around the business, look, we've got a good order book.
We think that'll grow. MSA work's growing. Our win rates are still good in our small to mediums. We can see these large projects that are sitting there that we will convert, and that'll get the order book back to levels we probably haven't seen before, which is good. The ECI projects flow through. The sectors are all going really well. The mining, we've probably spoken strongly about that growing asset base. The energy sector's looking extremely good for us, including the decommissioning space. Defence, with our $8 billion Garden Island spend, Henderson coming quite shortly behind that, we believe, and building and facades as a sector too with all the ECI work. Really, when we look at all this, it's just a super exciting time to be, you know, working at Duratec and the vision that we have ahead. I think we're on the edge of something pretty significant.
Yeah, just appreciate, again, all employees joining us on this journey and all the hard work they've done. And you to the shareholders that thank you very much for joining us on the call.
Thanks, Chris. Thanks, Ashley. That concludes the call. Thanks, everyone. Cheers. Thank you.