I would like to advise all participants that this call is being recorded. Thank you. I'd now like to welcome Bruce Nicholson, Chief Executive Officer and Managing Director, and Andrew Wackett, Chief Financial Officer, to begin the conference. Presenters, over to you.
Thank you, Janine. Good morning, everybody, and thank you for joining us today. As you said, my name is Bruce Nicholson. I'm the CEO and MD of Fleetwood, and I'm joined today by Andrew Wackett, our CFO. Together, we're gonna take you through our results for the first half of financial year 2023. I'll start by providing some introductory comments. Andrew will go into some detail on our financial results. I'll talk about our various businesses and their outlooks. Just as a point of interest, our cover picture on the results presentation today is Our Lady's Catholic Primary School in Victoria. This building is another great example of the impressive architectural design that is being incorporated to modern modular buildings. These are first-class buildings. That is why we are seeing increased popularity of modular as a high-quality, reliable, cost-effective and sustainable building alternative.
If I move to slide 2 now, at Fleetwood, we continue to focus on our three core businesses. Our Building Solutions business, where we're in the midst of a turnaround and in the early stages of our transformation, as we see great opportunity for long-term growth in this sector. Our Community Solutions business, where we see significant opportunities to extend our Searipple and Osprey businesses by pursuing development of new community facilities. Our RV Solutions business, which continues to service the continuing demand in recreational vehicles, caravan, camper trailers, and the motor home sector. Shifting to slide three, we recently developed a fresh new company vision, purpose, and values. Our vision is to be the leader in reimagining sustainable spaces. This vision touches all three operating businesses in slightly different ways. Underpinning our new vision and purpose are our five key values.
Zero harm to both our people and the environment, collaboration, integrity, accountability, and growth through innovation. If I move to slide four now. Operationally, Fleetwood's three operating businesses had a mixed first half, combining to deliver an EBIT-EBITDA of AUD 200,000 in the six months. Building Solutions' loss reduced to AUD 2.3 million as work on last year's major projects was completed, and we brought better quality work onto our order bank. Work on all major projects in Building Solutions has now been completed and our efforts are focused on commercial negotiation and final closure-closeouts. Going forward, the business has continued to target projects better aligned with our current capabilities. Community Solutions delivered a sound result and to expectations, given the ex-short-term excess capacity in the pool we've previously flagged.
An EBITDA of $2.69 million was below the first half financial year 2022, primarily due to the timing of major shutdowns this year. RV Solutions business continues to benefit from domestic travel demand with an EBITDA of $3.9 million in the first half. Importantly, our prudent approach to working capital has allowed the company to maintain a stable net cash position of $39.9 million after allowing for our financial year 2022 onerous contract provision of $14.1 million. To drive performance improvements, several long-term strategic initiatives were progressed in the first half, with the executive team now rebuilt to drive operational improvement, diversification of revenue, and deliver on our manufacturing transformation. We've seen this demand for Searipple strengthening with several major projects in the Karratha region advancing during the first half.
Moving over to slide 5 now, I'll pass over to Andrew to focus on some more of the financial details.
Thanks, Bruce. Good morning, everyone. As Bruce mentioned, the improvement in Building Solutions was offset by lower earnings from the remaining businesses. Work on all Building Solutions FY22 major projects has now been completed and efforts are being focused on commercial negotiations and final closeouts. Searipple Village saw the continuing impact of new supply in the Karratha market ahead of major project demands. Community Solutions was below the first half of FY22 due to the timing of major client shutdowns this year. We're expecting a stronger result in the second half of the year. RV Solutions performed well at the sales level with the ongoing popularity of domestic tourism. The company maintained a stable net cash position after allowing for the payment of the AUD 14.1 million onerous contract provision taken late in FY22.
This also reflected in the working capital movement on this slide. CapEx remains broadly in line with depreciation of our fixed assets. The underlying cash balance was maintained despite challenges presented by cost increases, operational issues, and major project closeouts. Slide 7. The balance sheet remains strong with net cash of AUD 39.9 million. Working capital returned to more typical levels as the AUD 30 million onerous contract provision was mostly paid out during the half year. The company continues to carry no balance sheet debt and retains AUD 58.5 million in undrawn credit facilities. During the half, the company's banking facility was extended for a further two years. At the end of the period, AUD 22.5 million of facilities were drawn for performance bonds and guarantees.
Bonding outstanding fell from AUD 27 million in June to AUD twenty-two and a half million dollars in December, reflecting reduced exposure to major projects. Whilst no final dividend has been declared, our dividend policy remains to pay out 100% of any future earnings. In summary, we continue to manage our finances prudently and we're maintaining the strength and flexibility to invest in the development of the business. Back to you, Bruce.
Thanks, Andrew. I'll now walk through the different businesses and the outlook for each. I'm on slide 8 now for those of you following us. Building Solutions recorded revenue growth driven primarily by the Queensland business, where population growth is creating education sector demand. Completion of the FY22 major projects also boosted revenue compared to the first half of financial year 2022, but at very low margins. Revenue declined as expected from the historical high second half of financial year 2022 of AUD 181.7 million, in line with the activity levels on major projects. As mentioned, earnings during the half were impacted by the runoff of financial year 2022 major projects at very low margin and the underperformance of a key project in New South Wales we've flagged previously.
Pleasingly, the first half performance on the Rio Tinto Ti Tree Rail camp upgrade mining project in Western Australia was within our financial year 2022 estimates. We continue to pursue a number of material claims which remain the subject of ongoing commercial negotiations. These claims have not been accounted for in these results. Labor and material shortages continued in the first half with the competition for key staff in the broader construction sector. This is reflected in wage pressure which saw overheads rise despite lower staff numbers in the business. We are seeing the early signs of this volatility beginning to ease, particularly in the costs of some raw materials where we've progressed major procurement initiatives across Fleetwood. Moving to slide 9.
When reviewing the performance challenges that Building Solutions experienced, several key issues were identified, and subsequent changes have been implemented to either prevent or mitigate their reoccurrence. The main issues identified included the relative size and scope of major projects in comparison to our order bank and the traditional scope of Building Solutions projects. The more bespoke nature of these projects increased the requirements for skilled labor and reduced the manufacturing efficiencies, the more standardized modular construction offers. In addition, the labor shortages and supply shortages rapidly drove higher raw material costs, further eroding margins on medium to longer term projects. To address these issues, the forward order book has not taken on any new major or complex projects. A return to more standard product platform will reduce the complexity which will allow margins to rise to more acceptable levels.
Recent leadership restructuring aims to improve the coordination across the business and the use of technology to foster collaboration, innovation and scalability within Building Solutions can also allow knowledge transfer within the broader Fleetwood businesses. Moving to slide 10. Our build transform and growth strategy provides a roadmap for medium to long term improvement in the quality and consistency of our earnings. The build phase involves the improvement in capability, systems and processes, and lifting brand awareness for Fleetwood to underpin long-term sustainable growth. The business is consolidating its national functional leadership model to improve coordination effectiveness of important functions, including sales, estimating and design, procurement, manufacturing, health and safety, and our finance functions. During the half, the centralization of the design estimating function and the rollout of new technology platform was completed.
The senior management teams in several states in Building Solutions has been substantially replaced, reflecting the underlying issues that impacted our financial year 2022 results. The transform component of our strategy includes revenue diversification, moving from being a bespoke builder to a repeat builder with a greater emphasis on manufacturing. This involves qualifying the work coming into our pipeline against key measures, including buildability for modular, the right margin, a deeper understanding of the risks and opportunities, and the right customers and clients to partner with. Unlike previous periods, the current forward book does not have any material new major one-off projects of high complexity and highly bespoke in an environment of limited skilled labor. During financial year 2022, these included the Ti Tree project as well as these large Centres for National Resilience and several other bespoke projects.
As we move towards repeatable modular, we've seen our order book revert to more normalized levels and it remains solid at AUD 87 million compared to AUD 130 million back in June 2022. We've also implemented the lessons learned from our projects and have a far more robust project review process in place in the business, which has already seen us walk away from several key projects in recent months. While this reduced the total revenue in financial year 2023, business profitability will improve. While Building Solutions continue to experience the ongoing effects of labor shortages and higher raw material costs in the first half, as I've said, we have seen early signs of the volatility starting to ease as we move into the second half. Building Solutions anticipates continuing to improve its earnings through remainder of financial year 2023.
This is expected to come from a combination of the solid order book with better quality projects, the reduced impact of major project cost overruns, and continued careful overhead management. Moving to slide 11 now. Our overhead staff numbers were down 5% since June last year as activity on major projects reduces, and there was an over 30% improvement in our total recordable injury frequency rate or safety performance for the first half of financial year 2023. An example of the aligning of national workflows and development of common processes and procedures to deliver consistency is the centralization, as I've said, of the design expediting function, which will start to show additional benefits for the business over time. Factory capacity and utilization are now being monitored and are driving sales and operational planning in the Building Solutions business.
Significant procurement savings have been identified and captured in our major project spending categories, with the benefits to begin to flow from the second half of our financial year 2023. Opportunities within the government, including housing, education, defense, are expected to increase as the adoption of modular gathers momentum. The WA Department of Housing is now using modular solutions after engagement with Fleetwood, and we are about to launch proprietary housing designs to the broader market from Fleetwood in the second half of financial year 2023. The defense strategy has been defined and is underway.
Over medium term, we expect to see a stable and growing business able to effectively leverage the advantages of modular including reduced build time or speed, a lower cost, especially when design variations are considered, improved quality when compared to in situ or on-site builds, and better ESG credentials, especially around waste, sustainability, and the ability to recycle, repurpose, and reuse our buildings. Moving now to slide 12 and talking about Community Solutions. Our result in the first half of FY 2022 was below... Sorry, in first half of 2023 was below financial year 2022, due primarily to the timing of major client shutdowns this year. The half has also saw the ongoing impact of low demand in the Karratha market ahead of major pro-planned projects.
A five-year agreement with Rio Tinto, executed early in the half, underpins the base utilization and profitability moving forward and creates a strong negotiating position for ongoing discussions with additional clients to support planned shutdowns and major projects over the coming period. During the half, contracts were secured with Woodside and Yara Fertilizers, further underpinning future demand at Searipple. Negotiations remain ongoing with existing and potential clients around future room requirements for financial year 2024 and beyond. Considerate opportunities remain for securing long-term community demand at Searipple to support future earnings. Osprey Village remains fully occupied with a long wait list. Moving to slide 13.
The outlook for Community Solutions is buoyant, with a strong start for the first half, as well as a growing pipeline of work in Western Australia's northwest, which will see significant future development of projects in the oil and gas, fertilizer, and green energy sectors. Securing existing demand from current customers places Fleetwood in a strong position for the medium term. Commercialization of Fleetwood's lock and energy management system using Fleetwood's developed Glyde technology is underway. Fleetwood's development of the technology as a value deliver through our Building Solutions business positions the company as a digital market leader. A growing number of low-carbon economy projects are currently under consideration in the northwest of Western Australia, the requirements for communities to house and facilitate these projects is significant medium-term opportunity for the Community Solutions business.
Community Solutions is well-placed to pursue build, own, operate, and transfer or BOOT and build-to-rent, BTR, opportunities in the residential and aged care sector, leveraging the building resource and abilities at a competitive cost supported by our Building Solutions business and of course, Fleetwood's strong balance sheet. Moving to slide 14. Our RV business continued its positive revenue performance, driven by the ongoing strength of domestic tourism, albeit with ongoing global supply challenges. Despite the easing restrictions on international travel, the attraction of domestic travel remains high. While both the OEM and aftermarket segments experienced solid trading conditions, some softening of the aftermarket demand occurred during the second quarter. OEM production remains very strong. Strong management of increased raw material costs allowed gross margins to largely be maintained. We were able to pass through price increases to key customers during the first half.
Wage inflation and significant increases in property costs during the half saw operating cost increases related to the first half of financial year 2022, which translated to lower EBITDA margins. Price increases have been implemented in the early in the second half to recover our margins at leaded levels. Moving now to slide 15. The medium-term outlook for RV Solutions remains positive, while international travel has resumed, the forward order book for manufacturers remains at very solid levels. The business will likely remain in a strong position through exposure to our locally built RV market via the parts business, Camec, and to overseas imports through the services business, Northern RV. The recent boom in caravan sales during the last two years will likely continue to deliver demand for our aftermarket services and our renovation offerings.
Continued strong management and price and input costs is expected to support margins. New products such as sandwich panel walls and aluminum wall frames are currently under trial with a number of key customers. The increase in secondhand van sales we're seeing provides an opportunity for our products and the promotion of renovation of our service operating offering. Challenges remain primarily around raw material supply and pricing, freight costs, and access to and price of skilled labor. The potential impact of recent interest rate increases, fuel cost increases and the impact of discretionary spending is being closely monitored in our RV business. Moving to slide 16 now. Overall, the business is positioned to generate improved results going forward. All three businesses have clear plans to improve revenue quality, capture future opportunities, increase utilization, manage costs, and in doing so, improve our margins.
These plans aim to return the business to profitability in financial year 2023. Note our dividend policy remains to pay out 100% of our future earnings. The company is becoming more adept in identifying and managing challenges. I'm confident the team will continue to find ways to identify and successfully navigate these challenges as they occur. As we've said, our balance sheet remains solid, and we're prudent in the way we leverage the strength of this to support growth. I'd like to finish up by thanking all of our shareholders for their understanding as we work through the turnaround of Building Solutions and implement the build, transform and grow plans. With that, I'd be happy to take any questions.
Thank you. At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We'll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Oliver Porter, Macquarie Australia . Your line is now open.
Hi, Bruce and Andrew. Thanks for running us through that. Just a quick one on Community Solutions. You noted the short-term supply popping up in Karratha has had an impact. What's the risk of further short-term accommodation popping up in the next half?
I think I'm on. Yeah, I'm on mute. Sorry. Thanks, thanks for the question, Oliver. That's a good question. We aren't concerned about it. We're talking about effectively Rio Tinto and Woodside-owned camps, which have been coming for some time, and have been protracted. We saw the full impact of the Woodside and Rio occupying those. There is the 2,500 bed camp being temporary camp being built at the moment for the Pluto 2 expansion. Beyond that, we're not seeing any further threats to additional accommodation coming into the market up there. In fact, it's quite difficult to get approvals with the local council up there. There is talk of another apartment block up there. Imagine from today, talking today to actually building something that's usable, it's gonna take many, many years.
We don't see a significant risk, at this stage in terms of additional demand becoming available in the marketplace. Did you want to add, Andrew? No, I think that's a good answer, Bruce.
Great. Thanks, guys. That's all I had. Appreciate it.
If you would like to ask a question, press star then 1 on your telephone keypad. There are no further questions at this time. I turn the call back over to Bruce.
Thanks, Janine. Look, I'll just reiterate, I'd like to thank all of our shareholders for their understanding as we work through, as I said, the turnaround in our Building Solutions business. There is a high level of urgency around that at the moment. We are continuing to drive the build, transform, and grow strategy and execute those. Thank you for your patience. Thank you for your understanding, and I look forward to the roadshows over the next weeks.