Good morning, everyone. Thank you for standing by and welcome to today's webcast for Duratec Limited's full-year results presentation for FY 2026. My name is Adrienne Porter, Duratec's Corporate Planning and Investor Relations Manager. I would like to begin today by acknowledging the Noongar people, the traditional custodians of the land on which we gather, and pay our respects to their elders, past, present, and emerging. Joining me today are Chris Oates, our Managing Director, and Ashley Muirhead, our CFO. Please note that all participants are currently in a listen-only mode. This morning, there will be a presentation followed by a Q&A session. If you wish to ask a question via the webcast, please click on the blue hand displayed in the top right-hand corner of your screen, then type your question into the dialog box that appears and click submit.
I would now like to hand over the webcast to Chris, who will talk through Duratec's FY 2026 highlights.
Thanks, Adrienne. Hi, everyone. Welcome to Duratec's full-year results presentation, including a business update and outlook on all sectors and companies. We will start with a quick recap of our business history. Here we get a snapshot of Duratec's growth since inception. Whilst our long-term CAGR still remains strong, our FY 2026 revenue result was lower than anticipated due to the timing of some of the larger projects, which have now landed, but well later into the financial year than originally anticipated. The overall result was still positive as our EBITDA, NPAT, and EPS are all improved from the prior year, despite the anticipated revenue being slightly down. With our order book at new record highs and subsidiary companies performing well, we expect to return to strong growth levels.
The key business drivers remain strongly active in all key market sectors, and our diversified operating model continues to be a strength, with revenue generated across multiple sectors, geographies, project sizes, and reoccurring maintenance streams. This balance helps reduce exposure to any single market cycle while supporting more consistent earnings. Looking now at our portfolio, FY 2026 saw the group's continued expansion through a combination of organic growth initiatives and strategic acquisitions that broadened our capability, strengthened our East Coast presence, and enhanced our service offering across asset life cycles. The award of a AUD 45 million contract with Lihir Gold in Papua New Guinea marked an important milestone in Duratec's expansion into international energy and resources markets, demonstrating the breadth of expertise now available across the group.
Acquisitions completed during the year included EIG, which strengthens our position across electrical and fuel infrastructure; RGK Resources, which adds specialist inspection and testing capability; Hunter Coatings, which enhances our self-performed protective coating, structural integrity, and concrete remediation offering; and Pacific Welding Australia, which expands the group's project-based welding mechanical services and specialist fabrication capability. During the year, we also established DXP Energy Solutions, further strengthening our capability across the energy sector and supporting a broad range of asset lifecycle services. These investments continue to expand our participation across the full asset lifecycle, from technical advisory, inspection, and engineering through construction, remediation, maintenance, asset integrity, and ultimately, decommissioning. This broader capability enables early engagement with clients and supports longer-term relationships across the life of critical infrastructure. Our acquisition strategy remains focused on targeted capability-led opportunities that complement the existing group, strengthen self-performed delivery, and add specialized technical expertise.
Cultural alignment and long-term strategic fit remain key considerations in every acquisition decision. While the initial acquisition investments have been relatively modest, we expect these new businesses to contribute meaningfully as they scale and leverage Duratec's national footprint, client relationships, and collaborative operating models. FY 2026 was a year of positioning the business for the next phase of growth and delivery. While revenue was broadly flat, we expanded gross margin from 18.6% to 20.5% and increased normalized EBITDA by 10.3%, highlighting the benefits of our focus on higher quality work and disciplined execution. We strengthened the group through four acquisitions and the establishment of DXP Energy Solutions and Atec Facades, broadened our market reach with our ISO 19443 accreditation, opening opportunities within the AUKUS nuclear supply chain, and delivered another year of strong safety performance with zero lost-time injuries.
Most importantly, we converted tenders into the record order book of AUD 650.8 million, up 66.9% from FY 2025, providing a solid foundation for the year ahead. Looking to FY 2027, our focus shifts from winning work to delivering it. A substantial portion of the FY 2027 revenue is already secured through the order book, supplemented by recurring annuity and MSA revenue that sits outside of that order book. We have multiple near-term wins and are also working on converting a number of current ECIs we have been engaged on. We will also benefit from a full year contribution from acquisitions completed during FY 2026. Major projects including Diamantina Wharf, Darwin Ship Lift, Lihir Gold, plug and abandonment, and the Orica Hunter Valley Hydrogen Hub are now moving into delivery, positioning the business for a strong year of execution and operational performance. Taking advantage of operational leverage will also be a strong focus throughout the year.
Moving now to our financial highlights. Revenue delivered in FY 2026 was AUD 570.3 million, which was broadly in line with the previous year, driven primarily due to project timing and delivery phasing. However, normalized EBITDA, normalized EBITDA margin, and NPAT all delivered record results. Normalized EBITDA increased to AUD 58.5 million, up 10.5% on FY 2025. Overall normalized EBITDA margin has lifted to 10.3%, and NPAT has increased to AUD 23.8 million, which is up 4.1% from the prior year. Later in the report, you will also see that we have provided sector EBITDA margin performance for each of the reporting sectors. Earnings per share was AUD 0.0925, up AUD 0.016 on FY 2025, and the board has declared a final dividend of AUD 0.025 per share, fully franked, which brings the total dividend for FY 2026 to AUD 0.0425 per share as we continue our balance between returns to shareholders and retain funds for growth.
Our order book is at record levels, tender activity remains exceptionally strong, and our pipeline has reached an all-time high. I will hand over to Ashley Muirhead, who will speak to the FY 2026 financial results.
Thanks, Chris. Good morning, everyone. Revenue of AUD 570.3 million was broadly in line with FY 2025. A highlight of the year was the strong growth achieved across Building & Facade, energy and emerging sectors, reflecting continued demand for Duratec's specialist capabilities. The strength of our diversified operating model was evident with the growth in these sectors offsetting project timing impacts experienced in the defense and mining and industrial sector. Importantly, we continue to improve the quality of earnings across the group. Gross profit increased to AUD 116.9 million, with gross margin expanding from 18.6% to 20.5%. This reflects disciplined project selection, strong project execution, and the continued expansion of our self-perform capability, both organically and through targeted acquisitions. The margin improvements flow through to earnings, with normalized EBITDA increasing to AUD 58.5 million and the normalized EBITDA margin increasing to 10.3%.
While continuing to invest in acquisitions, business systems, and integration to support future growth, we also delivered improved shareholder returns, with net profit after tax increasing to AUD 23.8 million, EPS increasing to AUD 0.0925, and the fully franked dividend maintained at AUD 0.0425 per share. Overall, FY 2026 demonstrates our ability to improve profitability, strengthen margins, and grow earnings while continuing to invest in the future growth of our business. Turning to cash, the group finished the year with a strong cash balance of AUD 78.8 million. We generated AUD 37.3 million of operating cash flow before interest and tax during the year, representing a solid cash conversion of 74%. The result was impacted by the timing of project milestone receipts and operational payments around year-end, which influenced working capital movements. Importantly, cash conversion remains strong. Working capital was well managed, and the business continues to generate healthy operating cash flows.
A key focus during FY 2026 was investing for future growth. We invested AUD 12.1 million in plant equipment to support operational capability and deployed a further AUD 14.4 million into business acquisitions as part of our growth strategy. Those investments strengthen our self-perform capability and expand our market reach. We paid AUD 9.4 million in fully franked dividends to shareholders during FY 2026. The strength of our cash generation continues to provide flexibility to invest in growth while maintaining shareholder returns. Turning to the balance sheet, Duratec remains in a strong financial position, with net assets increasing to 26% to AUD 93.8 million during FY 2026. This reflects both the group's operating performance and our continued investment in strategic growth opportunities. During the year, total assets increased to AUD 302 million, reflecting acquisitions completed during the year, together with ongoing investment in operational capability.
Acquisition activity increased intangible assets to AUD 32.7 million and resulted in contingent consideration of AUD 10 million linked to agreed performance milestones. Importantly, we closed the year with AUD 78.8 million in cash and total funding facility of AUD 343.5 million supporting borrowings, bank guarantees, and bonding requirements. With 64% of facilities remaining undrawn, the group retains significant liquidity and funding flexibility to support future growth initiatives and project delivery requirements. Contract assets increased during the year due to the higher project activity and revenue recognized on milestones not yet invoiced at year-end. Overall, our balance sheet remains well-positioned to support organic growth, pursue strategic acquisitions, and continue investing in operational capability. Combined with our strong funding capacity and record order book entering FY 2027, the group is well positioned to execute on the opportunities ahead. I will now hand back to Chris to cover the operational highlights.
Thanks, Ashley. Ensuring our people's safety and well-being is vital to Duratec's success. Throughout FY 2026, we continued to invest in our people, safety, and sustainable foundations. Our workforce, which has grown more recently to a total of 1,580 through a combination of organic growth and acquisition activity, was supported by the implementation of a new workforce management system, refreshed leadership and technical development programs, and the introduction of a structured career pathway to support capability development across the group. We also renewed our vision, mission, and values, published our inaugural sustainability report, launched our Reflect Reconciliation Action Plan, endorsed by Reconciliation Australia, and established a 2035 scope one and two emissions intensity reduction target. These initiatives reflect our commitment to building a strong, sustainable business that supports our people, clients, communities, and long-term growth objectives. Moving now to defense performance and outlook.
Defense delivered in FY 2026 revenue of AUD 158 million, reflecting completion of major FY 2025 estate programs, partially offset by the commencement of the AUD 300 million Diamantina Wharf upgrade, which underpins defense revenue through FY 2027 to 2029. This sector delivered an improved gross margin of 17.4% and an increased EBITDA margin of 8.4% through disciplined project selection, effective cost management, and a favorable mix of work. A key milestone during the year was the commencement of the AUD 300 million HMAS Stirling Diamantina Wharf upgrade through the Duratec Ertech Joint Venture, which further strengthens our position to support future AUKUS-related infrastructure investments. We also extended our fuel and marine infrastructure capability through the successful delivery of complex defense projects, including HMAS Coonawarra. Importantly, we achieved ISO 19443 accreditation, the nuclear specific quality standard for participation in the nuclear supply chain, reinforcing our capability to operate in highly regulated and strategically important environments.
Looking ahead, the outlook for the sector remains positive, underpinned by sustained Australian investment in defense infrastructure and strategic capability programs. With a strong pipeline across estate upgrade, fuel and marine infrastructure, and sustainment work, we believe Duratec is well positioned to benefit from AUKUS-related investment and increasing demand for larger and more complex project deliveries. On to mining and industrial. As you can see, from a performance perspective, the revenue was at AUD 114.3 million. While this was lower than the prior year, the sector increased its gross margin 23% through a greater proportion of higher valued structural integrity and maintenance works. During the year, we strengthened relationships with tier 1 clients like BHP and Hancock Iron Ore, supporting the diversified pipeline of opportunities.
Key projects progressed well, including the Rio Tinto's high-grade iron ore project, where additional scope was secured alongside the delivery of the Yara Pilbara renewable hydrogen and ammonia projects and the BHP Under Harbour Tunnel Remediation work. We also expanded our capability and geographical footprint through the acquisition of Hunter Coatings in the Hunter Valley and the establishment of a new facility in Port Hedland, further enhancing our ability to support clients across key mining and industrial regions. Looking ahead, the outlook still remains positive, underpinned by ongoing demand for remediation, maintenance, and asset integrity services across aging infrastructure. With a strong project pipeline across mining, industrial, rail, port, and energy markets, together with growing opportunities across the East Coast and South Australia, Queensland, and Northern Territory, we remain focused on converting strategic client relationships into long-term contracts while maintaining a balanced mix of major projects and reoccurring maintenance work.
Moving to Building & Facade, which delivered an outstanding result in FY 2026 with record revenues of AUD 138.8 million, which is up 24.1% on last year to deliver a gross margin of 19.9%, supported by strong demand across facade remediation, heritage restoration, and building remediation projects. A key feature of the year was our ability to convert ECIs into main works contracts, including the Ayers House restoration project in South Australia and a major high-rise facade refurbishment in Brisbane CBD. Across the country, we secured and progressed several significant projects, including Canberra's largest residential recladding project at Glebe Park Residences, a large-scale live apartment facade rectification work in South Australia, the heritage Market City Paddy's Markets remediation project in New South Wales, and a landmark Sydney CBD remediation project.
We also continue to broaden our technical capability and national delivery models, culminating in the launch of Atec Facades, which expands our offering beyond remediation into the delivery of new build facade systems, significantly broadening our addressable markets. Looking ahead, we see strong demand across remediation, heritage restoration, roofing, glazing, and building upgrade projects, with increasing ECI activity supporting participation in larger and more complex opportunities. The sector is well-positioned to build on the momentum achieved in FY 2026. FY 2026 was a defining year for our energy sector as we continued to strengthen our position as a diversified provider of maintenance, asset integrity, fuel infrastructure, and decommissioning services. Despite the slower start to the financial year, revenue for the sector increased by 11% to AUD 91.6 million, supported by strong demand across maintenance, engineering, and fuel infrastructure services.
During the year, we significantly expanded our capability through the acquisitions of EIG Australia, RGK Resources, and Pacific Welding Australia, as well as the establishment of DXP Energy Solutions, creating a more integrated platform capable of supporting clients throughout the full asset life cycle. We successfully delivered several strategically important projects, including the Santos Barrow Island B tank refurbishment project and the Harriet Alpha decommissioning project, the King Bay supply base wharf refurbishment for Woodside Energy, and ongoing works at the INPEX Ichthys LNG facility. Looking ahead, we enter FY 2027 with strong momentum supported by the growing portfolio of maintenance, fabrication, fuel infrastructure, and decommissioning opportunities. Key projects include the Lihir Gold plug and abandonment campaign in PNG, the construction management contract at Orica's Hunter Valley Hydrogen Hub, and a national services agreement covering tank and fixed asset maintenance for a major fuel infrastructure provider across Australia and New Zealand.
We're also providing ECI services for the design of Perth Airport's jet fuel extension project and have secured stage 2 fuel infrastructure works at Sydney Airport. Together with our expanding maintenance contracts and strong relationships with major operators, we believe the sector is well-positioned for growth across Australia and the Asia Pacific region. Finishing off with our sector-based updates with our emerging sectors, which include marine transport infrastructure and water infrastructure. Revenue achieved by our emerging sectors was AUD 67.8 million, an increase of 11.8% on the prior year with an improved growth margin of 18.2%. As we expanded our presence across marine transport and water infrastructure markets, the result was driven by a more diversified portfolio of projects and continued investment in capability, market expansion, and national delivery.
During the year, we secured several significant project awards, including the Darwin Ship Lift Blast and Paint facility, the Kwinana Bulk Jetty Cathodic Protection works, and electrical infrastructure works for CSIRO. We also continue to strengthen our national marine capability through project delivery across Western Australia, Queensland, and Victoria, while expanding our exposure to new clients and end markets, including high security government infrastructure opportunities through our inclusion on the Department of Home Affairs panel. Looking ahead, the outlook remains positive, supported by a strong pipeline across marine, water, and transport infrastructure markets, continued government investment in critical infrastructure, and increasing demand for marine asset upgrades. With growing client relationships, expanding capability, and a broader addressable market, we are well-positioned to pursue larger and more complex infrastructure opportunities in FY 2027 and well beyond. We will now look at our updates by entity.
During the year, MEnD continued to strengthen its role as Duratec's specialist technical advisory, inspection, and asset integrity business, with demand growing across all major sectors. MEnD expanded its national capability through the establishment of a Brisbane laboratory and further enhanced its technical offering through the acquisition and integration of RGK Resources, adding specialist non-destructive testing, inspection, and asset assurance capabilities. The business also increased its involvement in defense advisory services and secured its first international engineering project through the Newmont Lihir main wharf and ro-ro remediation study in Papua New Guinea. Looking ahead, we see continued demand for asset integrity, inspection, and technical advisory services supported by ongoing investment in digital engineering, laboratory testing, and inspection technologies. Importantly, MEnD supports Duratec's Early Contractor Involvement model, enabling earlier client engagement and leveraging the group's national footprint and multidisciplinary capability to convert advisory opportunities into long-term projects and maintenance work.
WPF continued to strengthen its position as a key provider for fabrication, welding, mechanical, and maintenance services to the energy sector. During the year, the business expanded its east coast footprint through continued growth in Queensland and the acquisition of Pacific Welding Australia, further enhancing its national self-perform capability. Looking ahead, strong relationships with major operators including Chevron, Woodside Energy, INPEX, Santos, McDermott, and APA Group support a growing pipeline of maintenance, fabrication, and decommissioning opportunities. Combined with the enhanced capability delivered through the PWA acquisition, WPF is well-positioned to support larger and more complex energy and industrial projects across Australia. EIG Australia has integrated well into the Duratec Group, and during the year continued to strengthen our capability across fuel infrastructure, electrical, and mechanical services.
EIG has enhanced Duratec's integrated energy offerings and asset lifecycle capability while increasing collaboration across the group on larger fuel infrastructure opportunities, including Perth Airport's jet fuel expansion program. Looking ahead, EIG is supported by a strong pipeline of opportunities, including the recently awarded Rio Tinto bulk lubrication facility and fuel infrastructure upgrade projects. Continued investment in engineering capability, specialist fuel systems, master metering solutions, mobile bunkering technology, and maintenance services, together with the support of Duratec's national platform and complementary energy business, positions EIG to pursue larger and more complex infrastructure opportunities and continue the group's long-term objective of becoming a leading asset lifecycle partner to the energy sector. During the year as part of our B&F offering, we launched Atec Facades to expand Duratec's capability beyond the remediation and into the new build facade market, significantly broadening our addressable market.
The business brings specialist expertise across design, procurement, fabrication, and installation, complementing Duratec's established facade remediation capability. Atec combines in-house design, digital engineering, and national delivery expertise to create an integrated facade delivery model capable of supporting larger and more complex projects. Looking ahead, we see growing demand for specialist and design-led facade solutions and believe Atec provides a scalable platform for long-term growth in the facade sector. By leveraging BIM digital engineering and the broader capabilities of the group, Atec is well-positioned to enhance efficiency and strengthen client relationships. During the year, we established DXP Energy Solutions to expand our capability into the high-value energy services, creating a specialist platform focused on engineering, well abandonment, decommissioning, and operations across the energy asset lifecycle. A key milestone during the year was the mobilization and delivery of a major plug and abandonment campaign at Newmont's Lihir operations in PNG.
Looking ahead, we see growing opportunities across Australia and PNG in decommissioning, well abandonment, operations and maintenance, and broader energy infrastructure services. DXP's integrated delivery model, which combines engineering and field execution under a single management structure, together with its strategic partnerships and specialist expertise, positions the business to support increasingly complex projects and further expand Duratec's presence across Australia, PNG, and the broader Asia-Pacific energy markets. Looking now at DDR Australia, Duratec's Aboriginal and Torres Strait Islander associate business. The business further enhanced its self-perform capability through the integration of RC Construction and targeted investments in plant and equipment, improving its ability to deliver civil and concrete works across defense, government, and infrastructure markets. A key milestone was DDR's expansion into the Northern Territory and commencement of the Darwin Ship Lift project, which provides a significant runway of work while strengthening DDR's national presence.
During the year, DDR continued to deliver strong social procurement outcomes, with Aboriginal people representing more than 25% of its workforce and Aboriginal enterprises accounting for more than 30% of supply chain spend. Looking ahead, the business remains focused on disciplined growth across Western Australia, Queensland, and the Northern Territories, and is supported by a solid order book and strong pipeline of defense and government infrastructure opportunities. Looking now at our master services agreement and annuity style contracts, which made up 32.5% of revenue in FY 2026 compared to 31% in FY 2025. These agreements reflect the strength of our long-standing client relationships. Many of the major clients have partnered with Duratec for more than a decade, providing repeat work opportunities, increasing revenue visibility, and creating meaningful barriers to entry.
We anticipate MSA work to grow and continue to strengthen future revenue visibility and create opportunities for repeat work. This revenue sits outside of the order book. Now turning to the pipeline and outlook for the remainder of the year. Duratec's order book has grown to a record level of AUD 650.8 million, representing a 67% increase from last year. During FY 2027, we anticipate delivering between 70% and 80% of this along with the standing start MSA work. The tender and pipeline outlook are AUD 1.3 billion and AUD 4.8 billion respectively, reflecting the substantial pipeline of opportunities across our core markets. While the order book has grown 67%, the tender section still remain very strong and even after the conversion of a number of larger opportunities. This truly shows our expanding business is very well-placed for FY 2027 and well beyond.
The pipeline has increased slightly, and we anticipate this to continue to grow as we expand our service offerings and grow capacity and capability. Turning to the outlook, we enter FY 2027 with a record order book of AUD 650 million. It is also important to note that it is only recently that a number of these projects have moved into the execution phase, providing a strong platform for continued growth well into FY 2027. These include the HMAS Stirling Diamantina wharf upgrade, Lihir plug and abandonment campaign in PNG, the Darwin Ship Lift berth and tank facility, Kwinana Bulk jetty cathodic protection works, and electrical infrastructure works for CSIRO. Together, these projects provide a solid base of activity across defense, energy, and emerging sectors. We also expect an increased contribution from our portfolio businesses and recent investments.
EIG Australia is progressing opportunities including the Rio Tinto bulk lubrication facility and fuel infrastructure upgrade, while Pacific Welding Australia and DXP Energy Solutions are expanding our fabrication, maintenance, and decommissioning capabilities. The quality of our revenue base also continues to strengthen. MSA and annuity style contracts represent 32.5% of FY 2026, up from 31% in FY 2025 and sit outside of the order book. This reoccurring work, together with growing maintenance and sustainment activity, supports revenue visibility and earnings resilience. Looking further ahead, significant investment across defense, energy, mining, and industrial and critical infrastructure continues to support the demand. Our position is further strengthened by the commencement of HMAS Stirling wharf upgrade, increasing AUKUS related opportunities and a significant investment plan for the AUD 24 billion Henderson Defense Precinct. These opportunities are complemented by a growing pipeline of major marine infrastructure projects, as well as expanding prospects across energy, fuel, water, and transport sectors.
We are also participating more broadly across the asset life cycle. The addition of engineering specialists, inspection, fabrication, maintenance, asset integrity and decommissioning capabilities allows us to engage earlier, self-perform more work, and remain involved for longer. Recent ECI conversions are evidence of the value of our early engagement strategy, creating significant follow-on delivery opportunities that will support performance in FY 2027, FY 2028 and well beyond. With a cash balance of AUD 78.8 million, a growing portfolio of complementary businesses, and continued investment in self-perform capability, the group retains flexibility to pursue disciplined, organic expansion and strategic acquisition opportunities. Taken together, these factors position Duratec to pursue larger and more complex projects while further diversifying the group's earnings base. That concludes our presentation for today, and I would like to hand over to Adrienne Porter to moderate the Q&A session.
Before I do, I would like to sincerely thank our people across the group for their hard work, commitment, and contribution throughout FY 2026. The strength of Duratec lies in the capability and dedication of the entire team, whose continued focus on safety, quality, and delivery excellence underpins our success and positions the business for future growth. I thank you all.
Thanks, Chris. Just a reminder to everybody, if you would like to ask a question via the webcast, please click on Blue Hand. That is displayed in the top right-hand corner of your screen. Then type your question into the dialog box that appears and click submit. We will now move to the first question. Actually, before I jump into the first question, I might just remind everybody that a copy of the webcast, along with the presentation, will be uploaded to Duratec's website follow the meeting. Looking at the questions we have received, the first question is a multi-part question from Lindsay Bettiol at Goldman Sachs. I will read the question in full, and then I will break it down. It is a five-part question, and Chris, you can-
Yeah, no worries.
Address it in stages. The question in full is, first part with regards to the bridge to FY 2027. Looking at the order book of AUD 650 million, if we subtract the AUD 150 million for Diamantina over two years, and then also look at the MSAs, so AUD 185 million plus revenue and all the ECI work and medium to large projects that are dropping in the second half of FY 2027. Is there anything wrong in this maths calculation? Second part of the question relates to medium and larger opportunities in the second half of the year. Looking for some more color around the 13 ECIs. Also, with regards to the value of those ECIs, confirming if the AUD 280 million is in the order book and also the timing on the potential of converting those ECIs.
And then final part to that question is with regard to margin trajectory in FY 2027, if there's any specific segment call-outs that you'd like to address. If you want to maybe take-
No worries. Yeah, thanks for that. We'll go through all of those parts of those questions. We start off with the bridge to 2027, I guess in reference to consensus numbers and taking the order book to that part. The order book sits at AUD 650 million, as we've outlined there, which is probably the absolute strength of the year that we've had, taking it from AUD 400 million to AUD 650 million. Then we break that down, and we go, yes, some of that goes through to FY 2028, which is really good. Then we're left, I think the way the question was asked, at about AUD 500 million revenue to be delivered in FY 2027, plus the MSAs. I think that the question relates that at about AUD 185 million. This is all about and it's just all the stats that we've got out there. So you get yourself into the sixes.
How do we bridge the gap? Yes, it's probably all the data's there. We've got AUD 1.3 billion worth of tenders that we do come through. We always talk about our win rate being one in three. But on that ECI work, it's exceptionally stronger, and some of those projects are just one for one on a win rate. So we do expect some more to be dropping from now onwards. I'll probably just jump into some of those ECIs as well, because we've called out 13 of them at AUD 280 million. They, and the timing of them, is happening at all sorts of periods, as you can imagine. There's ones due relatively soon, probably on the smaller scale that wouldn't be announced. Then behind that, we'd expect another one fairly soon after that as well.
More in the B&F space, because that's where a fair few by number are. Obviously, one of the bigger ones that's inside that will be the Perth Airport project we're working on. So it's a very low number, as in 3.5 million or half of our proportion of that sits inside the order book right now. The rest of it's in tenders, and it is quite a big part of that. It's a complex job. It's a fuel-related job. It's everything we do, and it's, I think, why we won the job. So we'd expect that to come through, if timing is anything to go by, as what we hear in the second half. That, obviously, we have plenty of work to do in between now and then.
That added to it will populate some pretty big numbers back into the order book. We'd expect to be holding that order book up and about, along with delivering some pretty strong revenue. I think, just to confirm too that the AUD 280 million, that was one part of that question, is not in the order book. It is in the tenders. That's the way we're always going to call it out, because it's not a job till it's a job. That's probably answered all the way through that question there, I think. Sorry, the margin trajectory in FY 2027, that's the last part of that question. If we run through that, and I think that question pops up again, so I can answer that part of that as well.
In defense, we've got a I'll just talk gross margins and the EBITDA margins rounded up to overall EBITDA as well. We have defense at 17.4%. That's up. That's a really strong part. It has been there before. Up at that, we're coming off a base of 13%. Obviously, the revenue's come down, but we have secured the circa AUD 300 million job by DEJV. We'd obviously expect us to bounce back strongly from a revenue perspective. We do that at a margin of around 17%. We're going really well. We expect that to happen. When the volume goes up, then the EBITDA margin at the end of that, which is 8.4%, should go up accordingly. Obviously, with the overhead proportion, that doesn't need to rise on that journey of increasing the revenue. M&I, so that's our mining business, 23%. That's gone up a bit.
Basically, the churn of all the small to medium jobs is around that margin, sometimes a little bit more than that, but that's probably about right. If we do grow some strong revenue, that margin can come down. We're not anticipating that at this stage. That translates to an EBITDA margin of 8.1%. That's a bit lower. On that journey of FY 2026, we were probably expecting to grow mining more than what we thought. So we had probably some overheads there. The structure probably wasn't exactly right for what we were doing, but we do expect that to grow now, and we've readjusted how we view that going forward. Again, we probably want that EBITDA margin to come up a bit, as it should. But generally, the growth margin's about right. Building and Facade has had an absolute good year, and we expect that to continue.
That's at 19.9%, doing a lot of self-performing there. EBITDA margin's 9.4%. So that's good. That could come up a little bit too on that journey, depending on the mix of jobs that we've got. Energy is probably the interesting one there, and I'm going to answer another question that's coming. Is 25% with an EBITDA margin of 14.7%. But if we have a quick look at that too, what was happening there is we went from AUD 27 million in the first half to AUD 64 million in the second half to round off at AUD 91 million. So that as a percentage from half to half is a huge difference. This is some of those projects coming through. One, particularly our plug and abandonment campaign in PNG. So the mix of that has come down slightly.
We still expect energy to be in the 20s as we grow, but we are growing significantly there as well. Really you look at EBITDA at 14%-14.7%. Again, we would want to hold that, and maybe we can do something good there. But that's definitely a huge area of growth for us, and we would always want to be in the 20s for energy. Lastly, emerging 18.2% gross margin into a 3.2%. That's a bit lower. It did have some more overheads in there, in and around a little bit of those acquisitions. So it probably had some one-offs and some parts to that. So we want to see that EBITDA margin rise a little bit, and the gross margins could come up a little bit, depending again on the mix of work we've got.
I think I might have answered a few of the second questions, but if you could take us through that as well, Adrienne.
Sure. Thanks, Chris. The second question from Abraham Akra at Evans and Partners is also a multi-part question, and as Chris alluded, probably has been in some part addressed in his previous response there, but I'll read the full question. The first part is, can you share underlying PBT and NPAT? The second part is, any more capability gaps that you deem attractive via M&A? Part three is, growth margins in energy fell year on year. Can you provide some guidance as to why and what we can expect growth margin for energy in FY 2027? The next part relates to revenue and the 13 ECIs. What is the revenue for the 13 ECIs contributing in FY 2027? And confirming the ECI revenues outside the order book. And the final part relates to the opportunity for near-term tenders at Henderson.
I think you've probably covered a good portion of that, Chris, but I might just then throw to Ashley for the question around the underlying PBT and NPAT, and then maybe come back to you to cover off anything else that you think is appropriate. Yeah.
Yep. Thanks, Adrienne. If we were reporting normalized NPAT, then there would be an adjustment for the one-off costs in relation to the four acquisitions and the business system improvements. That would result in the NPAT or the underlying NPAT being approximately AUD 27 million.
Okay. Chris?
No worries. There's one part of the question there relating to some of the projects and I guess the topping up of all the orders or the tenders, right? So we're at 1.3. That's still relatively strong considering that a lot were won and lost in that period before, right? So we won our fair share. We got the order book from 400 to 650. So what's the stuff ahead? A lot of this isn't in the tenders, by the way, because we're only really pushing it across from pipeline to tenders when we're actually tendering on it, meaning it's getting near to. So this is just a macro, probably, look at some of the stuff that's out there that we are targeting and we will be looking at. So we obviously have our conversion of the ECI at Perth Airport.
That's a big number. That is in tenders. Some of the other things working that are around, by the way, so Kwinana Westport, if we look down, this is in Western Australia there's a massive upgrade. So first of all, there's Kwinana Bulk Terminal that's coming out, and that's in the EOI phase now that we're part of. That's quite a large job, a very large job. Next door to that is Henderson. Everyone's probably following the news on that. There's a AUD 24 billion plan spend. That number has just been revised, or other people think it's a lot more. There's a heck of a lot of work that we believe we can do. We work a lot in that Cockburn Sound. We're obviously doing a lot of work over at Garden Island. So we think we can tender, certainly hard at it.
We think we will be preferred to some degree in that space. We have also got that ISO accreditation, 19443, which allows us in that nuclear supply chain. That is a big target for us. We have lots of work with Santos. There are some term maintenance contracts we think we line up well for. There is other work at Garden Island. There are plenty of other things going on that is obviously targeted with an AUD 8 billion spend. There are a couple of fuel facilities coming up in Sydney. Again, right up our street for what we do. Brisbane Airport is doing a big fuel upgrade. There are just other fuel upgrades that we are working on with multiple clients around Australia. The U.S. defense spend, that is another big target. That is barely in our pipeline at all. We see that as a place we can certainly play.
PNG opportunities, we are working our way through the one job. MEnD has won another project, so we are wrapped with that. We think there is still a lot to play out there. I think that is probably covered off that.
Okay. Thanks, Chris. Just moving then to the next question, which is from Pia Donovan at Argonaut. It is a question around margins. Pia asks, margins are at record levels. Do you expect to keep margins looking forward? How should we look at margins across the sector and at the group level?
Yeah. I probably touched on them individually a bit. Just to round it off, is that, yeah, we had a good year and got the margin from 18%-20%. We think that is sustainable, particularly as the acquisitions we have made, if you could say RGK, EIG, PWA, they are on the higher end of the margin profile. Part of that is we internalize some of the jobs. That is our offering to the client, is we know what we are doing, we can get these jobs done, then our margin can go up because it is more self-performed. That is our target. We think and believe those growth margins are very sustainable. Obviously, and I have probably said this plenty of times, we have not had the opportunity to take advantage of operational leverage yet.
But when we do look at the order book and we see that definitely can play out. That is us adding a fair chunk of revenue from where we were in 2026 to 2027. Then completing or performing well at that. That obviously is a good growth margin. From a corporate overhead perspective, we collate that. The business is set up to handle this type of revenue into the AUD 700 million. So we feel we can translate that into a pretty good EBITDA when it all comes down to it. It is not lost on us, we have targeted this for some time, and the beauty of 2026, despite perhaps the numbers or the revenue wasn't where we wanted it to be, the order book goes from AUD 400 million to AUD 650 million. That is what we would look at 2026 and say, quite a phenomenal setup year.
The other point to that probably is we have won a lot of that towards the end of the FY as well. So if we look at that, the run rate now is up where we wanted it to be and that is, I guess, the beauty of the position that we are in now looking forward.
That is great. Thanks, Chris. Next question is from Simon Hinsley at NWR, and you may have also addressed this in part. Simon asked, "Just to clarify, is it right to say with that AUD 650 million order book, which you may convert 75%, plus the MSAs of AUD 200 million, gets you close to AUD 750 million already? Is it a fair way to look at the standing start for FY 2027 in terms of revenue?
Yeah, I think I went through that earlier on. Likely you can dice the math a few different ways, but it is there, right? Because you go the order book is there, the AUD 650 million is there. There is part of that is DDR in there as well, which we don't account for at the top, obviously, with the revenue side of that. So then you convert the AUD 600 million by that 75% there, and we have called it out of 70%-80%. These jobs are underway now, so we are not expecting that slippage to occur. Then you add the MSA work, you automatically get yourself to some pretty solid numbers, which call it a standing start or however we want to look at it. But we have never been this well-placed. That is probably very clear.
If you go back through the history of the order book and then you try and relate order book, because the order book is what we are going to do. If you go back through those years, we absolutely have not been in this position. That is the beauty of it and all of the math that I think these questions are alluding to there. We have had the best standing start by a long shot than we ever have in the history of the company.
That is great. Thanks, Chris. The next question is from Matthew Chen at Moelis. He asks, "Just some interest around the color on the movement of contract assets." I might pass to Ashley just to respond to that.
Yep, sure, no problem. Contract assets increased to AUD 53.2 million, and this was driven by increased project activity at year-end and revenue recognized on contract milestones not yet invoiced.
Great. Thank you. Another question from Pia Donovan at Argonaut around NPAT margin. Pia is asking, "In terms of NPAT margin, what do you expect going forward? Will it stay the same?
We'd like to think we'd get some upside. I've probably just gone through that as well in the sense of just going, if we hold our growth margins up and we believe the order book that we have now supports a good margin because, probably go through, you can break it all into the sectors. It's coming from the right sectors. We've obviously got the growth margin up in defense. Again, if we get that bit right and the business has been set up to do a little bit more. We had slippage throughout 2026, obviously for some of those majors that we've set up, so we don't expect too much more corporate cost. Obviously, that can tumble through right down to the bottom, but I won't go into any percentages. Everyone's probably got their own version of how to get the math there.
We definitely are, and it's probably from day one why people are interested in our business because we are a high margin. We can take advantage of operational leverage. We just got to have the work there. We feel we've got the work there. The pipeline looking forward is huge as well. Hopefully we'll be able to address that NPAT margin in a positive sense, on that journey throughout this year and well beyond.
That's great. Just looking at the questions that have come in. I think we're down to the last question, which I'll put to you in just a moment. Just a reminder to participants, if there were any further questions, if you want to click on that blue hand in the top right-hand corner of your screen, type your question into the dialogue box and hit submit. I'll just move to the last question in case anything else comes in. In the meantime, Chris, it's a question from Sam Pittman at Taylor Collison. Sam is asking, "Is there any update in relation to nuclear regulatory compliance facility at HMAS Stirling?
That's an interesting thing, and it's well beyond probably what we're just receivers of this type of information and position. What is clear and it will happen is that in that supply chain for the nuclear work, if you could say it will be ISO 19443. It's obviously got a strong interest. There's not many people with it. It's extremely complex. We've got that accreditation. We've just been audited on that as well. So we're probably the only company really fulfilling or operating underneath that at the moment. That's to do with the work here. So it's still got a bit to play out from the regulators down to the licensees and what zones there are. I think Osborne in S.A. was the first one to get tagged in zone 3.
That's all that public information if people want to look it up. We're not ahead of any of that information, by the way. It's all public. You can probably look that up. But it is going to happen. It's there, and they've just got to work their way through it. And we're just miles on top of it, obviously, because of the fact that we went out and got that accreditation some time ago.
Thanks, Chris. Another question has come in from Lindsay Bettiol at Goldman Sachs, which I think you've probably addressed there, but it's just, any update on SIF?
No real update on the SIF. That's another part of the project. It has been obviously delayed or stalled on that journey. That job will go ahead. In what fashion or how that goes to market will be yet to play out.
Okay. And another question has just popped up there now from Phil Pepe at Shaw. He's asking, can you elaborate on any opportunities for Duratec surrounding the Brisbane 2032 Olympics?
There's plenty. For us, there's lots of opportunity, and we're already probably doing a couple of projects there. The Clem Jones Promenade, that's going to be probably one of the biggest features for Brisbane. Just hearing some of the stats out there, it's quite super interesting how many people are going to be there for this eight weeks of it, and they've got to have things to do in the city. So there's building upgrades, there's infrastructure upgrades. There's Brisbane Airport, massive updates to that, including fuel. The work we're doing at Perth Airport, that we believe can translate straight across to Brisbane. There's some similar teams involved with that. We think that's a really good place to play. So there will be all sorts of things going on.
There's always a heap of caution around these things as well from our perspective, like localized inflation, probably in the last three years in the build-up to the Olympics, is going to be, I think, pretty strong. A lot of the stuff we do is now onwards. As in, if you're going to do a building upgrade, you know what you're doing, do it now, don't do it in 2030. We think we've got a fair bit of work that will spin out for us. If you think about all the upgrades that have to happen. This is all to the peripheral stadiums that exist now. You've got a lot of that. We've done a little bit there. We think there's a lot more to do. So yes, there's definitely opportunities for us in that.
Great. Thanks, Chris. That appears to be the last question that we have. Just a reminder, participants, if there were any further questions, you can contact the company directly through our investor relations email address. I'll just pass over to Chris for any closing remarks.
Yep, no worries. Thanks, Adrienne. Just really, yeah, thanks to all the shareholders for being on that journey with us to this point. Just in 2027, we expect to grow significantly, and our confidence is underpinned by that order book being up 70%. We also have those MSAs, they're up a couple of basis points there. We are expecting also some near-term contract awards, which should support us further. Started off the year well. Look, the momentum in May and June has been strong as well, obviously, with some of those wins starting to come to fruition. We certainly see a strong start to this FY 2027 and plenty more big deals we think to come. That positions us what we think is very well for 2027 and some of these go into 2028. We haven't had that type of look ahead, I don't think, before.
We are in a great position and just want to thank everyone again for listening in and the questions that have come as well. Thanks again.
Thanks, Chris. That concludes today's webcast. Thank you to everyone for joining in, and have a good afternoon.
Thank you.
Thanks.