Okay, good morning everyone. Ladies and gents, my pleasure to welcome you to our annual general meeting. For those who don't know me, my name is David Rafter. I'm the Chair of the company and also chairing today's AGM. Just to reconfirm, as stated in the notice, shareholders participate in the AGM via the live webcast. Kindly be advised that you will not be able to ask questions or vote when viewing the live webcast. As it is now a few minutes after 11:00, and we have a quorum of shareholders present, I will declare the meeting open. To start, I will welcome and introduce my fellow directors. On my far left is Andrew Moffat, fellow Non-Exec Director. To my closer left is Michael Sainsbury, CEO and Executive Director. To my right is Mohamed Yoosuff, who heads up Strategic Development and is also an Executive Director of the company. Some other intros, we have Jay Cook down the front, who is our company secretary. Is Scott here from PKF?
Yes.
He's not here. I think he's the person. Or Jeeves, but we should have a representative here.
Okay.
Who's the rep from PKF?
Not here yet.
Oh, not here yet. Okay.
He's here.
Okay. Good morning. We have no written questions submitted by shareholders for PKF, as our auditors. PKF rep, when they're here, will be happy to answer any questions on the audit. Thank you. We also have Maria from Computershare. Good morning. She will act as the returning officer as we conduct the poll. The agenda is fairly simple, three components. Firstly, I'll provide a chair address, which will outline the company's sale and operations for FY 2024. We'll then run through the formal business of the meeting, and there will be an opportunity for shareholders to ask questions on the resolutions proposed. Following that, I will close the AGM, and then Michael, as CEO, will present an update on our recent business developments. Okay, in terms of chair address, FY 2025 has been another year of earnings growth, operational discipline, and strategic execution for the business.
Against a backdrop of some economic uncertainty in some target market sectors, IPD remained focused on delivering value for shareholders, with statutory revenue growth of 22.1% and net profit after tax growth of 17% over the FY 2024 prior comparative period. IPD's strong cash flow conversion performance at 113.6% was another highlight for the financial year. This result allowed the repayment of AUD 20 million of a AUD 40 million bank loan facility that was related to the acquisition of CMI operations in FY 2024 and delivered a year-end net cash position of AUD 9.8 million. This leaves the group once again in a very strong financial position, providing investment and capital management flexibility. This includes continuous evaluation of M&A targets that provide accretive earnings growth and strategic value. Further to these positive financial results, the board approved total dividend payments to shareholders of AUD 0.126 per share, fully franked for FY 2025.
This equates to shareholder dividends of AUD 13.1 million and a payout ratio of 50% of NPAT, which is in line with the group's dividend policy range of 40%-60%. The total dividend of AUD 0.126 per share was a 16.7% increase over FY 2024. From a strategy standpoint, the board participated in several full-day sessions with the IPD leadership team to further develop and refine the group's strat plan. The board is confident that this updated plan will enable all group businesses to benefit from Australia's accelerating investment in electrification, decarbonisation, and industrial automation. With respect to governance, the board placed particular emphasis across the financial year on succession planning for key roles, AI-related risk and opportunities, cybersecurity robustness, mandatory climate reporting, and operating overhead expense management. The board also undertook workplace health and safety observation walkthroughs in a couple of the group's Sydney and Melbourne premises.
IPD enters the new financial year, FY 2026, from a position of strength. Demand for integrated electrical solutions continues to grow, driven by infrastructure upgrades, data center expansion, and decarbonization objectives across the economy. We are positive the group's strategic direction is sound and remains focused on innovation, disciplined execution, and shareholder returns. As CEO Michael Sainsbury will shortly detail in his presentation, year-to-date trading is showing positive momentum across all group businesses, and we are pleased to announce guidance for the first half of FY 2026 in the range of 5.1%-7.2% EBITDA growth over the FY 2025 PCP. To close, I would like to thank my fellow directors for their considerable input and guidance across the financial year.
I'm particularly pleased that founding director and major shareholder, Mohamed Yoosuff, will continue his long-standing connection with IPD as a non-executive director following his retirement from his current executive role at the end of December. As disclosed in October, Mo has made an indelible mark on IPD Group over the past two decades, a period of significant growth, multiple acquisitions, and a successful ASX listing. I also note his commentary at the time that he will remain actively engaged as an NED and long-term shareholder with no current intention of reducing his shareholding. I thank all our shareholders, staff, and supply chain partners for your continued support and belief in IPD's future. Thank you, and we can move to procedural matters. Just the formalities. Today's meeting has been convened in accordance with the Corporations Act. The notice of meeting was lodged with the ASX on the 24th of October 2025, and therefore within the required notice period. If there are no objections, I will take the notice as read. Okay, registration. Is anyone who is entitled to vote not registered? The registration desk is yet at the front. Okay, all good. Please, you would have got an identity card from the registration desk. There are three.
Thank you. Please continue.
All good. A white display card for visitors and invited guests. The voting process or resolutions to be considered shall be decided by a poll. For this purpose, may I request all members present in person or by proxy to fill in the green voting card? If you are a shareholder and wish to cast all your votes for a resolution, please place a mark in either the for, against, or abstain box next to that resolution. If you wish to split your votes, please write the number of or the portion of votes you wish to cast in the corresponding box. Please note that the sum of the split votes must not exceed your total holding. Voting cards will then be collected at the end of the meeting by Maria and team and counted by the share registry.
Shareholders in attendance that have already submitted a vote by proxy should note that your votes will already be counted towards the poll, and you do not need to lodge another vote unless you wish to change your proxy instruction. Are there any questions in relation to the voting process? All clear. In order to provide you with enough time to vote, I will now declare voting open on all resolutions. You can submit your votes at any time, and I'll give you a warning before I move to close voting. I would like to highlight that where undirected proxies have been given in favor of the chair, I will be voting these proxies in favor of all resolutions put to the meeting today.
I will disclose proxy votes prior to the vote being taken for each item, and these figures will be as at the closing time for receipt of proxies, which was 11:00 A.M. on Sunday just past. Q&A. During the meeting, I will put various resolutions to the meeting. Shareholders can raise questions that relate to the business of those resolutions by raising their yellow or green display card. May I request that you clearly state your name and your capacity before asking your question? Visitors are not permitted to participate in the Q&A session. All questions should be addressed to me as the chair, and I either will deal with the question personally or ask someone who is better placed to respond. Of course, we will do our best to answer any relevant question raised within a reasonable timeframe.
We can now move on to the formal component of the meeting. Item one is the financial statements and reports. This is to receive and consider the annual financial report of the company and the related directors and auditors' reports in respect of the financial year ended 30th June 2025. Please note there is no formal resolution required for this item, and I therefore now open this item for discussion. Any last call for questions or comments? No one. I'll now ask the company secretary to record that the annual financial report and the related directors and auditors' reports in respect of financial year ended 30th June 2025 have been received and considered by the shareholders. First resolution, the adoption of the remuneration report, which was set out in the company's 2025 annual report. This resolution now appears on the screen, and I will take it as being read. Also on the screen are the proxy votes received on the resolution, and I now open this resolution for discussion. Last call. All good. I formally put this resolution to the meeting, and please cast your vote. Okay, as resolution number two relates to me personally, I will now hand over to fellow NED, Andrew Moffat.
Thanks, David. Resolution two today is the re-election of David Rafter as the Director. Thank you. Sorry, resolution appears on the screen, and I'll take it as being read. Also appearing on the screen are the proxies received for the resolution. I now open this resolution for discussion. Shareholders are requested to raise their yellow or green voting cards for any questions. If there are no questions, I'll formally put this resolution to the meeting. Please cast your vote on the resolution .
Thanks, Andrew. Okay, the next item of business relates to the approval of issue of performance right to Michael Sainsbury, our director of the company. This resolution appears on the screen. Yes, and I'll take it as being read. Also, proxy votes on the screen relate to this resolution, and I now open this resolution for discussion. Last call for any questions, comments? Okay, so I'll formally put this resolution to the meeting. Please cast your vote. Okay, next item is general questions. I will ask if there's any further questions on the matters we have presented to this point or any general questions regarding the business of the company. No one? Thank you. Ladies and gentlemen, that concludes the formal business of the meeting. A couple of minutes, I will close the voting, and please ensure that you have cast your votes on all resolutions. T hank you, Maria. I'll now close the polls, and when the voting has been collated, the results will be declared on each resolution, released on the ASX and published on the company's website. That concludes the formal business of today's meeting. Thank you very much for your attendance and participation. It is 11:18 A.M. I now declare the AGM closed, and I'll pass over to our CEO, Michael Sainsbury, for the company presentation. Thank you all.
Thanks, David. Thanks, Jay. Appreciate that. I'll stand up again so I can look at the screen that you're looking at and make sure I can give fair warning in advance. Welcome, everybody. Thanks for taking the time to be here with us today. It gives me great pride and great pleasure to be able to talk to you about the business. For those of you who haven't met me before, my name is Michael Sainsbury, as David mentioned, and I'm the CEO for the company. On the deck, what we'll share today, I'll give a bit of an overview, a bit of an update from both a strategic and operational perspective. I'll then talk a little bit about the markets that we're attached to and the performance of those markets material to our performance.
I know that the part you'll all be looking forward to are trading update and outlook, and then the time for Q&A at the end. Just advancing through to slide five, which is just a title slide, slide six. This just for those of you who aren't intimately familiar with the business or want a reinforcement of the story. IPD Group is the parent company trading under ticket code IPG. Underneath IPD Group, there are four standalone businesses, but well connected, a lot of synergy between each of those businesses. To give you just a quick summary of what they do, we've got the Addelec business, which is a complete electrical engineering services provider in the high and low voltage space with a strong specialization around EV charging and particularly the infrastructure to support EV charging.
The CMI business, which is our most recent acquisition, is a manufacturer and distributor of electrical cables, specialty plugs, and couplers and receptacles for industrial applications. A lot of the plugs go into underground mining applications, but not exclusively. Those plugs are manufactured; they're the company's own IP. They're manufactured locally here at CMI. The cable is through an import from our overseas manufacturers. EX Engineering, which was an acquisition just prior to CMI, is a business that specializes in the supply, modification, repair, and design of hazardous area electrical equipment. They can either do that as loose components to be able to do MRO maintenance, repair, and operations in that hazardous environment, or they can engineer, design, and build customized solutions to go into that hazardous area environment, and they are able to provide IECEx compliance and certification.
We get audited once a year to maintain that compliance certificate, but they are able to, in their own right, comply and specify down to that IECEx capabilities. IPD, which is the founding part of the business that gets the base upon which the business was built, is in power distribution, energy management, automation, product distribution, but importantly, has the capacity to be able to build customized assemblies for customers as well, taking away the labor component from some of our customers and bringing that in-house with a strong engineering bias towards that as well. All well connected, a lot of synergy, and certainly adjacent businesses in the electrical infrastructure space. Moving on to slide seven. A lot of information on here, and I'll quickly just go through it to give everybody some clarity. What drives us?
A connected grid delivering complete electrical solutions that enable Australia's transition to safer, smarter, more sustainable electrical infrastructure. At the core of it, that statement does really summarize what is our value proposition, what our focus is on in the marketplace. If we talk about our strengths, the first one there being the industry scale. We are one of the largest electrical product distribution networks for commercial industrial sectors in Australia. We exclusively play in the Australian market. We do export a small amount to New Zealand, but not a great deal. It's not material in the scale of things it is throughout Australia, but we are recognized as one of the leading distributors in the space of electrical infrastructure.
When we talk about custom solutions, I mentioned before we have the ability of selling loose components to a customer, which they would then integrate into a total solution as part of the electrical infrastructure, or we can work with our customer to engineer a complete solution to do the engineering component, the design component, the drafting component, and then the build to be able to take that away from our customer if they require it. That is in the IPD business, in the CMI business, as well as in the EX Engineering business, and of course in the Addelec business, where a lot of it is engineered solutions. A really important one for us is trusted brands. We have an extensive product portfolio, well diversified, giving us protection across multiple markets and across multiple end verticals. What we do is we partner with T1 OEMs, global OEMs.
We're not working with diffused manufacturers. We tend to not get any issues around quality or recalls or anything like that because we are working with the world's most recognized and valued brands. It is certainly recognized, and I talk about our biggest portfolio in our offer, but not exclusively with ABB. Sorry, it is exclusively, but it's not the only one in our portfolio where it is recognized as best-in-class product solutions in its space. We are working with the T1 brands. Expert solutions. We talk about our business being high-touch business. There is a portion of our business, and probably in the vicinity of 20%-30% of our business, that is day-to-day trade. Customer places an order. It's based on a part number. It might be replacing something that's already in install base. It's very much a transaction, just a box-shifting transaction.
The large percentage of our business has an engineering component. All of our salespeople on the road across the entire business come with some electrical expertise, whether that's engineering, mechatronics, electrical trades. The reason that we mandate that is because our people need to be able to suggest, to be able to specify, to be able to help in assisting the selection of the most appropriate product to achieve the outcomes we're looking for. Remembering, a lot of the devices we are selling are life-saving devices. If you get it wrong, the results can be very, very, very obviously large scale. A deep technical expertise to deliver reliable, compliant electrical solutions with confidence. We do that, and we do that extremely well. Obviously, a commitment to safety and compliance, a legacy of regulated marketed expertise, delivering safe and industrial leading solutions goes without saying.
When I talk about our purpose and our mission, if you think about that up on the top there, what drives us, the two link in perfectly. Our purpose is to build a future where sustainable electrical infrastructure creates a better life for all. How are we going to do that? We're going to enhance every aspect of infrastructure through energy efficiency, automation, secure connectivity, while prioritizing the safety and well-being of people, internal and external. Our results, we're focused on sustainable, important word, sustainable shareholder value creation. Our results, pleased to say that our results show that, and the future looks quite bright in being able to deliver that forward-looking. Moving on to slide eight, and I'll talk more to our strategy here.
Remembering that this presentation, although we're in November now, is a recap on financial year 2025, and it was obviously a year of disciplined execution for us across all of the four strategic pillars that I'll talk to: strengthening growth, strengthening efficiency, strengthening sustainability, and focusing on our people. The first pillar that I'll talk to there is around business growth. At the end of the day, it's one of those four pillars that does drive us and focus on one of our core outcomes we're looking for. What is the strategy there? It's a focus on customer value and market expansion. How will we do that? We'll do that by selling more of the products we have today and expanding our product portfolio to give a bigger basket for our customers to be able to draw down from.
It'll either be in a distribution model by expanding our portfolio or via M&A, expanding our gaps in our portfolio or adjacent spaces in our current portfolio through either acquisition or through a distribution model. We're actively working on both of those. If we look at some of the results from 2025, and David mentioned a couple of these, revenue up 22.1%, over AUD 350 million, net profit up 17%, reflecting disciplined growth and strategic execution. Data centers continued to grow. Last year, I think it was 12% of our revenue. Sorry, in 2024, 2025 was 16% of our revenue, which represents a growth of 33%. It reinforces our role in electrification and that decarbonization sector. Important to point out here, there's two different types of data centers.
There's your hyperscale opportunity, which tend to be the global players, and a lot of the time it's driven by a global specification. Our ability to influence here in Australia is somewhat limited. We can manage the channel well, we can service the customers well, but a lot of the time there will be a specification at a global level. Sometimes we'll be the beneficiary of that, i.e., with Amazon. Sometimes our competitors will be the beneficiary. ABB have recognized that they probably haven't put as much time or effort and attention into this space as some of our competitors in the past, and they are working feverishly now to try and promote the portfolio, to bring out their tech offer into this environment, to change some of those specifications or to get, even if it's an alternate approach, into these specifications.
ABB, they've appointed a data center lead here in Australia, which is looking after the Asia-Pacific, which is a good change for us. They're working really hard at a top end around influencing specification. What we're doing extremely well is managing the channel here, that when we do get that specification, the customer gets the product on time, gets the support they need, gets the representation they need locally. We talk about then downstream from that hyperscale, you've got more colo, and that tends to be where we're focusing a lot of our time ourselves because there is the ability to influence the specification. A lot of the time, and if I use the expansion of Goodman, let's say for instance, Goodman are certainly looking to move into the data center space away from just construction and commercial buildings and go into the data center space.
They have engaged Stow Electrical, which is one of the biggest contractors here in Australia, and they are exclusively getting Stow to do the product selection for their data center. We have a really good relationship with Stow here, and we're in a great position to leverage off that. It is a good example of where we can influence the specification. On the hyperscale, it can be very difficult for us to change it if it is specified at competitor. We renewed our new four-year partnership with ABB's electrification products. Obviously, we have master distribution up to and including 1,000-volt equipment, which has been the same as it's been for the last five years. In ABB's mind, we have done an exceptional job. We have outperformed the targets that they've set for us in every year of our tenure representing ABB, and not just by a small amount.
We've exceeded that by a substantial amount at every milestone. In ABB's mind, certainly from a global perspective, there is certainly a recognition of the difference that IPD has brought to ABB in Australia. I remind everybody, when we took over ABB distribution in the electrification space four and a half years ago, their market share was sub 5% in Australia. Today, we're circa 10%-12% market share. They'd spent 30 years promoting their offer to get to 5% market share. We've spent four and a half years marketing their offer to take it to 12%. We're not sitting on our hands. We're not resting on our laurels. We'll keep working at that. Certainly, globally, they have market shares somewhere between 30%-40% in most geographies. That is certainly our ambition to take it to that level.
You do not have to be a rocket scientist to work out to take it from 12 to that 30-40 mark means that there is still a significant opportunity for us to grow the ABB portfolio in Australia to bring it back to those global levels. Our customer net promoter score, we do this once a year. We go out to out. We survey our customers. We ask them what we are doing well, what we can improve in. Our net promoter score of 19.3 is a strong result. It is the first time we have had a result where we are actually representing that as a complete group. We are including CMI, we are including EX, we are including Addelec and IPD in there.
In giving you any comparison, it would not be reflective of the business as it was done last time, but it is somewhat in line with our previous result from a customer net promoter score. Obviously, anything benchmarked, anything seen up to between 10% and 30% is a strong result in that area. It reflects strong customer trust, strong satisfaction, and a healthy result in line with the B2B industry benchmarks. Again, not something we are sitting on our hands. We are consciously and consistently looking to do things to update our go-to-market strategy, our digital tools, our representation, our offer there to be able to continue to get better. Mergers and acquisitions, while it is not mentioned there, it is certainly a key part of our mandate moving forward.
I know that I have received some feedback from some of our shareholders that with Mo moving into a Non-Exec role, will that mean that there's less of a focus on mergers and acquisitions? I can categorically say today, nothing would be further from the truth. Mohamed, in his Non-Exec role, will still be charged with the responsibility of working with mergers and acquisitions for us as one of the directors and one of the major shareholders of the company. Jason and I will continue to put a strong focus on mergers and acquisitions. I can say to you categorically now that the M&A pipeline for the future is more robust than I've seen it probably in the last three to four years. We are talking to more potential acquisition opportunities than we have been for quite a long time.
Materially, there are some that are really starting to gain some momentum. Nothing could be further from the truth if there are people out there perceiving by Mo's change that there is a deviation away from mergers and acquisitions. It is not the case, and it will be a big part of our growth strategy moving forward. When I talk about operational efficiency, I think FY 2025 was a year where we controlled the controllables, in a market that was somewhat challenging in the commercial space and probably not such a buoyant market. It is important in those times that we pull the levers that we need to pull to control the controllables, and I believe we did a very strong job of that in 2025. What are we planning to do there? Build scalable operations, leveraging shared services and technology across our group.
There are some good examples of what we've done there. The first point there is an amazing result. Operating expenses reduced to 21.4% of revenue from 24% in the prior comparative period. When you talk about controlling the controllables in a challenging environment, cost base is the first one you go to look at there. We've been able to do that, reduce that cost base with very little impact to our net promoter score. That was a very, very strong result from the management team and focusing on improving our margins and the scalability. We are at the core of it, a very cash-generative business. Cash conversion in the last period, as David mentioned, one of the highlights. It enabled us to deliver AUD 20 million worth of debt repayment from the CMI, where we went out to market and raised AUD 65 million.
We were able to deliver AUD 20 million worth of debt repayment over the last 12 months. The cash flow conversion rate is there, finishing with a net cash position of AUD 9.8 million, which gives us a very, very, very strong balance sheet position to be looking at those mergers and acquisitions and potentially being able to fund them out of a combination of cash and a little bit of debt, meaning with those acquisitions, no dilution for our shareholder group, which is important. Excitingly, we opened up our first co-located facility. We did one in Brisbane, where we opened a new facility up, a state-of-the-art facility up in Brisbane Airport, right near the airport. We are co-locating in there the IPD business, the Addelec business, and as of yesterday, the CMI business has started to move into that. We are co-locating all of our business.
The really important part there, from an efficiency perspective, it's great because it means we can share services and we can share resources. Most importantly, we can share the sales synergies, the leads, the things that we come across all day under the one roof. They're meeting at the coffee station, they're meeting in the bathrooms, they're meeting in the showroom, they're meeting at the foyer. The sales synergies that come out of co-locating all of our people into one building can't be measured, but they're certainly very strong. We have now replicated that down in Melbourne, where CMI are in there. We have an operational CMI warehouse in the same building as Addelec, where we do test calibration in our laboratory down there, and the entire IPD team is also housed at that Melbourne facility as well. From a cost and efficiency perspective, great.
From a sales synergies perspective, even better. We are seeing the benefits of that certainly come to the fore already. Moving on to slide nine. Under sustainability, our strategy there is to embed responsible environmental and social practices into the organization. We have picked a couple of points here. Honestly, I could talk to probably 50 things that we are doing here from an organization. We are transitioned, and we are in the process, obviously, as vehicles come to end of life, we are replacing them. We are transitioned those vehicles that have come to end of life from a petrol environment into an electric hybrid vehicle fleet with chargers installed at almost half of our sites. It would not make sense to install the electrical infrastructure and the charging hardware in sites that are coming to end of lease soon.
When we bring them into new facilities, we'll certainly bring them up to speed as well. The next one there will be in Perth. We'll co-locate in Perth. We've eliminated over 175 cubic meters of landfill waste through packaging and recycling initiatives. Inside the office, obviously, everything, no one has bins in their desk anymore. It all is recycling. All of our office environments are completely recycled. We're using the circular economy with ABB around our packaging and around crates, which are collapsible crates. ABB shipped to us in crates, which are collapsible. We collapse them down, we send them back to ABB, and the next delivery comes in the same crates that they sent them to last time. We're eliminating the use of cardboard and all that sort of thing by the circular economy.
Really importantly, and we talk about social responsibility, supported 10 university partners to develop further engineering talent and community outcomes. This is a great way to certainly support the community, certainly to support the young people coming through in the electrical space, but also to early identification of talent to be able to bring into our organization. While we represent this under sustainability, it certainly has a positive impact on our talent migration into the business as well. Last but certainly not least, because at the core of it, you could nail the other three, but if you do not get the right people into your organization, your chances of success are ultimately very, very slim. It is a focus on people, building an engaged and diverse workforce aligned to the group priorities.
If we talk about that there, we have over 625 employees in the organization currently. We have 40+ nationalities represented in our organization. We have a great spread reflecting inclusion and certainly capability growth. Big focus on training because you can get good people. For me, enthusiasm is knowledge on fire. To give knowledge, you have to train. That is self-training, but it is also us delivering training to our people. We have delivered over 5,000 hours of training to our people, internal training, and we have made over 30 internal appointments to strengthen our career pathways. Certainly, when you talk about acquisitions, there is all the value that comes with shareholder value and customer value by having a bigger basket of products.
What it also creates is a much more, I guess, healthier opportunity pipeline for our people to be able to grow and develop into what is a larger organization with a lot more scope and a lot more diversity. We've raised over AUD 9,000 for community causes. This AUD 9,000 is not what we put in as an organization because that's over and above here. It's what the people in our organization have donated themselves to go into community causes. Every quarter, we have a different charity to support, and the AUD 9,000 has come from the pockets of our people to support that and is over and above what we've done from a company perspective. When we talk about net promoter score, we recently embarked on our own employee net promoter score or survey, giving us a net promoter score of + 28, a very, very strong result.
Again, the first one since we've had the CMI business integrated and the EX Engineering business integrated. It can be a period when you have integration where net promoter score drops away because integration can create fear. When I say integration, it doesn't mean all coming together in one company, just coming into the group, a new ownership, a different way to go on the market, a different enthusiasm, different expectations. It can be a period where it can put pressure under this. I'm pleased to say that even in that environment where we're certainly deep in the trenches of bringing the CMI business and the EX Engineering business on, still a net promoter score of 28 and 75% engagement.
Of all of our employees, 75% chose to partake in the survey, which is a very high engagement score showing that they want to give us the feedback. We have certainly some outcomes that we wanted to embark on there to continue to improve. That score of + 28 is well above the industry average and reflects a strong value-driven culture. One of the things I am most proud of in my time as CEO, yes, the results have been outstanding, but the culture, the DNA in the business, the people in the business, the fun, the enjoyment, the respect is something that I hold core to what we have been able to achieve in IPD and probably my biggest achievement. Moving on to slide 10, we move into a market update. If I talk about now, a lot of that was internal focus.
We talk about external focus. I'll talk to commercial construction because 30-odd % of our—certainly the largest part of our revenue comes from commercial construction. I'll talk to that in the next slide. Aside from that, we've got three tailwinds that will support our business and drive growth into the future. In the last 12 months, these three areas here have probably underpinned a little bit of soft performance in the commercial construction. Where that's dropped off, it has been balanced off by a growth in these areas here. The great thing is that when commercial construction starts to come back, and I won't go too deep on that because I do cover it on the next slide, when the two of them combine together, it'll be an opportunity for us to really recognize strong growth in the market.
If I talk about the tailwinds, there would be nobody in the room or online today that hasn't heard the two words data center or three words data center growth in the last five years. I'm just going to reinforce that today. Capturing capacity that is expected to double by 2030. Although there's been a massive investment in data centers in the last couple of years, certainly in Australia and around the globe, the expectation is that it still needs to double by 2030. We've got four years to do what we've done in the last four years again. It's certainly not in a period that is going to be condensing or flattening out. That represents in excess of AUD 26 billion worth of projects in the pipeline for new facilities.
That AUD 26 billion is the total investment, and the electrical investment tends to be roughly 20% of the total investment. In a data center, you could probably argue that's as much as 30% because they are very power-rich data centers. Regardless of whether it's 20% or 30% of AUD 26 billion, there's a significant investment into electrical spend in data centers that we have the ability to be able to, and we have ABB product portfolio is well placed. The tech pack there is as strong as any of the competitors, and we are well placed to capitalize on that. The other thing is we've hit a real sweet spot. We have a product called Busd uct or Busway, some people call it. It's a replacement for cable, and it's very commonly used. It's a structured cabling system to get power around a data center effectively, efficiently, allowing future expansion seamlessly.
Our offer just seems to have hit the right spot in this data center environment. We have a significant pipeline of data center opportunities with our Busway portfolio. That will certainly underpin strong growth, and it will give us the ability of pulling through a lot of products, a lot of other products on the back of that. The data center phenomenon is being driven by ESG upgrades driving efficiency. Mandatory reporting is becoming reality for everybody. If it has not already as an organization, depending upon your scale, it will in the near future. You have to have granular visibility of your electrical infrastructure to be able to report and report appropriately. That is great news. That is great news for us. It will drive upgrades, driving this efficiency because that data has to be stored somewhere, and there have to be devices to capture that data.
It is not only new facilities, but it is certainly upgrading existing facilities to meet with those expectations. That is data centers. If we talk about EV market acceleration, our touch here, first and foremost, car sales, a combination of EV cars and Plug-in Hybrid EV cars, has tripled since 2002. We have seen the uptake, the percentage of cars sold tripled since 2022 in electric and in Plug-in Hybrid Electric Vehicles. However, that is still forecasted to have to grow four times by 2027, and we are nearly at the end of 2025. We are not talking far away, but those car sales still have to grow by four times to meet the requirements and the aspirations around net zero with our current government. The infrastructure rollout is certainly underway nationally. Addelec is well placed in this space.
The other place that we're well placed in the national construction code, which is what governs what a new building has to look like from a design and install perspective. Up until now, it has said that the building must be built electric vehicle charging ready. So the infrastructure has to be there, the power available to support EV charging, but you don't have to have EV chargers installed in those facilities yet. There is a new national construction code that has been out for comment. That comment is now closed. I expect that it'll be taken into place probably mid-year next year. That will come out now saying buildings can no longer just be EV- ready. They will have to have EV chargers in those buildings as well. You're talking about a commercial building with 1,000 parking spots.
Suddenly, there'll be a requirement for in excess of 250 EV chargers to have to be put into that building, and they will be single phase, three phase, 7 kW, which is more destination charging. There will also be a ratio built into that for every, let's say, 10 destination chargers, there must be one high-powered charger. That creates a massive opportunity for us and really changes the game for us around EV charging because right at this point in time, the biggest market in, we sell a very, very, very strong value proposition, high-tech EV charger in that destination environment. It's probably not what the, is misaligned with the market requirements at the moment because people in houses are using EV chargers as a glorified PowerPoint.
When this national construction code comes in, it will drive the building owners will want the EV charging to become part of the building management or the electrical infrastructure. They will need to have comms built into the EV chargers. They will need to be able to accept renewable energy to be able to support those. A lot of the cheaper alternatives that are being sold today won't meet those expectations. It will create a massive opportunity for us in the EV charging market when that national construction code comes out. The energy transition, when we talk about transition to renewables, battery energy storage, it is massive. It is reshaping the grid. We're seeing utilities completely reshaping.
We're talking about end users like FMG saying they want to become completely able to operate off the grid from renewable energy sources alone as an insurance policy against power outages, an insurance policy against rising energy costs, and everybody, utilities, end users, people like ourself with all of these facilities. We're demanding on our landlords that they put solar on there because electricity usage is one of our biggest bills across our facilities. To be able to reduce those energy costs, everybody is driving renewable. As I mentioned, utilities upgrading their infrastructure to build resilience and continuity of supply and a supportive regulation and ESG pressures are also driving this migration as well. Three pillars there that will underpin substantial growth into the future.
As I say, it's been compensating for us in the last 12 months for a little bit of a downturn in commercial construction, but they will be there for the next 5-10 years to support us. That's all great, but what does that mean for IPD? Our opportunity is to be able to support, supply the core electrical infrastructure, the switchgear, the distribution boards, the switchboards, the UPSs to cabling into these opportunities. We have a strong position in EV charging. We are very strong in automation with some really good vendors from around the world, and we have a really strong offer and expertise in hazardous area solutions as well. We have a proven track record of delivering into data center. I talk about Amazon. It is circa AUD 28 million worth of revenue being delivered by IPD into Amazon opportunities here in Australia.
Being able to support utilities and major projects is certainly core to our expertise. One of the things we have built into our customer service now, service team, is a project management team to assist in deliveries and that sort of thing for our customers. We are continuing to get better on those major projects. Commercial construction, growth in commercial, lumping their industrial infrastructure projects will drive demand. At our last roadshow, I spoke about green shoots in commercial construction, and that is certainly the case. I can talk to it a little bit here. Sorry, for those of you online, we are on slide 12. My apologies. Non-residential building work yet to be completed. Great point. Yet to be completed.
The results that we're going to talk about aren't necessarily being materially impacted by that yet because you would say that had been completed if they've been delivered. This is yet to be completed. 27% year-on-year, including a 13% increase in commercial buildings, signaling sustained market momentum. This is coming straight from the ABS in there, and we're referencing where the statistics are coming from down there in the environment. Realistically, we're starting to see commercial construction come back. We're certainly, our quotation pipeline is more biased to commercial construction and general construction than it has been for the last 12 months. As that picks up and gathers momentum with the three tailwinds that I spoke about on the last slide, we will be in a very strong position for growth for the future and sustained market momentum. It's led by health.
It's led by education. It's led by accommodation. It's led by warehousing projects, supporting a strong pipeline of work yet to be delivered. We are in a really, the order book has never been stronger. I'm mindful of presenting an order book to you because it could materially impact it, either positive or negative, if I've just shipped a major project or I'm just miss-shipping a major project. I can tell you that our order book is very strong. It has never been as strong as it is today. I'm pleasing to say that in the CMI business, substantial order growth in there, and we're recognizing projects in our order book for CMI, much larger scale than we ever have before. We talk about infrastructure expansion, engineering construction activity accelerating, commencements up 43.4% in the June quarter and 24.5% year-on-year, underscoring expanding infrastructure investment.
Again, that's indexed down below where we're getting that information from. Well aligned with our strengths in power distribution and automation. One of the projects that I'll talk about on the next slide is exactly that, what we've done in automation in an optical environment where they're manufacturing lenses. So very big there. Sustainability and smart building focus, a shift towards energy efficiency design across commercial and industrial projects. Data center investment, again, we'll talk about here. Accelerate, this is a really important point. Due to the 5-Star NABERS requirements, and I'm not sure if anybody in the room has heard about this though because it was only changes in the standard from July. It's called power usage effectiveness. What now the standards are saying that you must have a PUE, which is power usage effectiveness, of less than or equal to 1.4. How do you come up with that?
Power usage effectiveness is the total power consumed by data center divided by the power consumed in the white space, which is the IT equipment. That cannot be any more. What that really means is if you have got a data center that is needing 1 meg of power for the white space, you can only have a maximum of 400 kW to support the heating. Sorry, you do not want to heat in a data center. Cooling, lighting, EV charging. The ratios, it is a new mandate that has been put in. I have got some numbers here that I can talk to you about since that change. If I talk about before that change, the average PUE in Australia was 1.7.
It meant for every one megawatt was being consumed in the white space, we were using 700 kW to support cooling, to support lighting, EV chargers, those sort of things. Post this change, it's come down now to 1.48. Data centers are being built more efficiently, and the government is driving this change in the specification, in the rules, which is a great thing for us because more efficiency means more spend, more granular levels of requirement to be able to get access to that information. It's all supported by a net zero infrastructure. Globally, this is important. Globally, the average PUE for data centers globally is 1.55. What does that mean here in Australia? We're actually building one of two things.
We're either building data centers more effectively, more efficiently in Australia than we are in some other environments, or our climate means that we don't have to cool it as much as what some of the other environments. When you talk about Malaysia and Singapore and some of those environments where data centers have been strong, it's warmer. It means you have to cool a lot, and so it uses a lot more electricity to cool. It is one of the reasons why Melbourne and Victoria has been so strong in the data center spaces because of the cooler environment, and it reduces the need to cool those data centers. Pipeline momentum. A couple of years ago, we invested in what we called a strategic solutions team. What is a strategic solutions team? It is a team that don't have a customer base. They are working with consultants.
They are working with end users. They're identifying projects that are coming up in a window of 12 to 3 years away, driving demand. We had not done this, and some of our competitors, who I won't name today to give them any airplay, have been doing this for 20 years. It is a massive opportunity, and nobody else other than this one competitor of ours has been working in this space. We invested in putting a team into here with early engagement specification, driving the demand and the opportunity pipeline. Pleased to say, right now, there is AUD 330 million worth of opportunity pipeline. It is 12 months to 3 years out that this strategic sales team have identified, are working on, are driving engineering in their specification, driving design into there.
It's AUD 330 million that we would have been working on at the 11th hour and potentially getting caught in a negotiation in a last-minute decision where we're driving that earlier engagement now. Of that AUD 330 million, we asked them to weigh the probability of us being successful on those projects and weighted. That meant there's AUD 70 million worth of opportunity that we believe that we will be successful on, that AUD 330 million worth of opportunity that we probably wouldn't have identified without this team. Is it paying for itself? Absolutely, it's paying for itself. Into the future, it'll pay for itself in spades. Enhanced 2026 growth visibility supported by diversified projects, conversions across multiple group businesses. With the CMI business, with the EX business, with the Adelaide business, more than ever, we are seeing synergy realizations.
I know that the other day, EX Engineering placed an order on CMI for cable for AUD 160,000 that for the last eight years they have been buying from our competitor, Prysmian. I know Adelaide now is using CMI as a standard approach now for all of its cable procurement. The next slide, I'll talk about a project down here at Darling Harbour where the contractor was FIP, which is owned by a guy by the name of Frank Borecca, and IPD was successful in all the power distribution, and we were able to pull the cable through for CMI, which was upwards of over AUD 1 million worth of cable. The synergies between the organizations are really starting to take effect. Slide 13. Just to give you some context of the projects and the scale and the size that we're working on, I mentioned Amazon.
Obviously, the ongoing supply of power distribution with the addition of busway now. I've never, ever put that up there for Amazon because we've never sold it to them before. We have got our first Amazon data center where we've got our busway into there, and we're well placed to get that into the future. These little white droppers coming down into here would be attaching to the busway up above it and dropping down to provide the power into the IT sector and supporting hyperscale facilities with that AUD 26 billion growth sector I mentioned before. Mervac, the harborside development. This one here was actually the Darling Harbour redevelopment that I just spoke about a minute ago. We sold the cable through our CMI business.
We've done the main switchboards through a company called Tri-Vantage, which is down in Melbourne, and we've done the distribution boards through FIP up here in Sydney. It's a marquee project. It's certainly starting to come up out of the ground now, and we've worked with all of the key stakeholders there and not only got IPD in there but got CMI in there as well. The Addelec business has secured a turnkey HV electrical services contract with Sydney Airport, obviously strengthening our resilience around that transportation hub with regards to the Adelaide business. Our efficiency in the Adelaide business, when I talk about the use of our tradespeople and the skilled people we've got in our organization, one of the drains on our profitability in this Adelaide business last year was the use of those contracting, those skilled labor.
Pleased to say that we're really doing really well there this year from a usage perspective of those resources, and that's going to underpin a much better result for Adelaide this year as well. The fish markets down here, the redevelopment of the fish markets, that diagram there is what's called a variable speed drive. It drives motors. It can drive conveyors. It can drive pumps. It can drive basically anything, and it can do that. It brings a level of energy efficiency to any site. We sold 130 of these variable speed drives for an advanced HVAC, which is heating, ventilation, and air conditioning for the fish markets. Importantly, why did they choose our product? Because we were able to achieve up to 30% energy savings through a smart system integration.
We talk about the tech pack of our vendors, a clear example of where we're able to differentiate from our competitors. An optical research center. This was actually one that was called SEDA, I think it's called. It's Silverwater. They're making the lenses and they're doing it out of Silverwater over there. What we were able to do there was what's called an IPD optimised energy platform. It's not just hardware. It's devices that will capture it, but we're an on-prem software solution where we're able to bring that data into there, create a graphical user interface for the customer to be able to show them their energy efficiency and their usage through that facility. We were able to deliver the power distribution in there as well, improving the energy efficiency and the operating performance of that facility as well.
This last one here is a bulk handling company. It's CBH, which is one of the biggest three grain providers. It's a co-op, one of the three biggest grain providers in the country. The EX Engineering business have a product which is called DEXON, which is an enclosure system that fits really, really perfectly into these combustible type environments, particularly in grain. We delivered a lot of those enclosures for a large hazardous area facility in that CBH facility across multiple sites. It's a scalable custom enclosure, which is built specifically for heavy industrial usage. We intend to, as EX Engineering moves to the East Coast in January, expand that onto the East Coast with people like GrainCorp, who are big over here on the East Coast, certainly in New South Wales and Victoria. Slide 15, trading update and outlook.
I can see everybody's excitement on their face when I get to this slide. Slide 16. Resilient markets and a growing pipeline reinforce confidence in our business. Guidance is obviously based on unaudited management accounts for the first four months and our management forecast for November and December. There are certainly encouraging signs of recovery, certainly in the area of commercial construction and resilience across our end markets. We sustain positive momentum observed across all of our businesses, all of our businesses, all four of our businesses. Earlier investments made into CMI's longer-term growth strategies are really starting to generate tangible benefits. When I spoke at our last roadshow, I called out how excited I am about the changes we've made and the proactive initiatives we've put into the CMI business and the benefit that'll have. It is certainly starting to pay benefit in spades.
Underpinned by a stronger audit book growth, the group's current opportunity pipeline is well positioned for growth through 2026. If we talk about EBITDA, our previous result in the 2025 financial year for the first half was AUD 23.6 million. We're guiding a range of AUD 24.8-25.3 million, which is 6.1% at the midpoint. A lot of you know the history of IPD, and I'll allow you to draw your own conclusions there, but at 6.1% growth there at the midpoint for that EBIT in that EBITDA area. At an EBIT level, AUD 20.2 million was the prior comparative period. We're guiding AUD 21.1 million with a range to AUD 21.6 million and 5.7% growth there. I think the difference between the EBITDA and the EBIT is association with lease costs. Jase, correct me if I'm wrong.
Yeah, just a bit of difference in DAR costs between the two periods.
Yeah. Yeah. A strong result there and reflecting, and if you ask me, will our results be in line with this for the second half of the year? I would be disappointed if that was the case because we're certainly seeing some positive momentum. I remain very, very confident and enthusiastic about some potential acquisitions over the next six months as well. Certainly to underpin over and above here. The group is certainly building momentum. Strategic investments beginning to show benefits and a supporting outlook for 2026 for growth. As an organization, we believe that we are well positioned for a very, very, very good 2026. That finishes the formal part of the presentation, so I will open the floor in case there's any questions or answers. Oh, no, you provide the questions. Hopefully, I'll provide the answers. If there's anybody out there that has any questions to ask, happy to either take them myself or defer them to the most appropriate person. That means I either did. Oh, yes, Adam, you wouldn't let me be asking. Good on you.
I guess 12, 18 months on from CMI and EX Engineering. You've been talking about acquisitions for a while. I guess now that you've got them under your belt, what are your learnings and how are they shaping how you're thinking about the other opportunities that you're pursuing?
Yep. Just in case anybody online couldn't hear, Adam just asked me with regards to CMI and EX, how are they going in the integration and in the context of other acquisitions? What learnings do we take out of that? First and foremost, Adam, when we took the CMI business on, it had come from a previous owner base that were not investing in growth for the future. It was business as usual. It was just, I call it like seaweed. Wherever the tides go, the seaweed goes. And that is what the CMI business was. If the market grew, they were going to grow. If the market went back, they were going to contract. We wanted to flip that on its head. In the organization, we are quite bullish about calling out that we are going to grow at twice the market rate. In order to do that, with CMI being such a material part of our total offer, it has to grow at that sort of rate too.
We've increased our factory sizes in a lot of our facilities to be able to hold more inventory to be able to support our customer requirements because ratios might not be perfect, Adam, but 50% of our sales in CMI are still discretionary sales. If you've got it, you're likely to get the order. If you haven't got it, there's no chance you're going to get the order. We need to be able to support those discretionary sales. The other 50% is project-related, and the IPD business has certainly been dragging the CMI business in at a much higher level with tier one contractors. Recently, we've seen a couple of orders come through in the last month for CMI in the vicinity of AUD 2 million-AUD 2.5 million, which CMI would never have seen before. We've increased our facilities into the capacity.
We've increased the inventory in those facilities to support a larger growth model. We've brought in industry experts. We've got some people from Nexans. Our two biggest competitors in cable are Nexans, OLEX, and Prysmian. We've brought in some experts, some really well-established, high, big network people out of those organizations, and they're playing leadership roles in our organization. We're co-locating them wherever we can with the IPD business to leverage off those sales synergies. The learnings there are, though, too, Adam, in the short term, when you take an acquisition on that has a different model than what we've got, it might perpetuate some slight drop-off in the short term. Is it the right decision to make when you consider the next 10, 15, 20 years? Abso-freaking-lutely, it's the right decision to make.
If it means you have a short period of 6-12 months with earnings from that particular business not at the level you're looking for long-term, but for the next 10, 15 years, underpinning , I will make that decision time and time and time again. I think we're well positioned there. I truly say hand on heart, I called it out to you, I think quite bullishly at the roadshow last time, that I was most excited about this business in our portfolio because of the changes we've made there. EX, a smaller business, AUD 15-18 million worth of revenue, depending upon if you're talking about last year's numbers or our forecast for this year's numbers in EX Engineering. There's the opportunity to double that on the East Coast, Adam.
At the end of the day, a lot of the customers they're dealing with on the West Coast are also present on the East Coast. We've just got to introduce them to those people over here and introduce them to the skill set that the EX business brings in that they have probably 20%-30% market share in that hazardous area space and in that mining space, in oil and gas, in grain. We've now got to leverage that and do that on the East Coast. The learnings for me is that I guess it's not learnings, it's just confirmation of what we already knew. We have a really good sticky relationship with a lot of our customers. When we bring a new product portfolio to market, whether it's via distribution or acquisition, our customers will give us a good hearing because of our relationship.
We're seeing the benefits of that in CMI, and we're seeing the benefits of that in EX Engineering. I guess it's more confirmation than learnings that adjacent products that we don't necessarily support in the market at this stage is a massive growth opportunity for us in the future. With the new businesses, I'll give you some sort of flavor of the businesses we're talking to. One of the ones that we're having a conversation with is a further enhancement on our cable offer in a very specialized environment. It'll be an expansion of the CMI portfolio in cable, but it's in a very specialized environment with very, very good, strong EBIT margin returns attached to the business. High IP and circa sort of AUD 40 million-AUD 50 million revenue models.
The other one is in the power generation space, generators, whether temporary or permanent generators for continuity of power to a site like this or a hospital or a data center or a factory, whatever it is. You have short-term generators when there's no power, early works on a site, and then long-term generator power continuity. The one we're talking to there is prominent in both of those spaces. Again, what attaches to the generator? Cable. The generator produces an energy. The cable brings it to the building. What is it attached to? A switchboard. What do we sell? Switchboards. Such a perfect synergy approach to be able to link the generator to the switchboard with the cable. We have everything in that pathway. Give you some flavour about what it is and excited, enthusiastic, confident. Who knows what'll happen, but I'm fairly confident that there'll be something in the not-too-distant future around that space. A long answer, I know, but no one else is going to ask any, so I had to just fluff it out as much as I could. You have to ask another one now. Yeah. All right. You can ask another one if you go on.
Just, well, I guess gross margins, I guess we left last year. They were a little bit under pressure because maybe capacity or competitiveness or whatever. As you're seeing the pipeline develop, are you seeing some of the pressure ease?
Yep. A couple of questions there. I actually got asked the same question at the small mid-cap conference that the ASX ran, and I walked away from there so dirty with my stupid answer at that point in time. I'm glad you answered it because it gives me the ability to be able to clarify. First and foremost, there are two things that have impacted our weakening lower than the previous gross margin in our business historically. Number one, CMI has lower than IPD gross margin realization. It was always going to have a dilutive effect on our gross margin. The other thing is that commercial construction tends to be a fairly simple transaction play for us. In the IPD business, we provide a price list to our customers. If the projects are sub AUD 200,000, they do not even ring us and ask us for a quote. They order off their price book. Having said that, though, in the data center phenomenon in this project space, it is competitive up the wazoo. It certainly had an erodive effect on our gross margins.
The fact that our mix changed from day-to-day business, which tends to be just ordered straight off a price book, to more project environment where we were negotiating. I think a combination of, number one, as commercial construction starts to come back, it'll have a positive impact on our gross margin because it'll be more of that day-to-day flow without having to negotiate on price. As CMI, as we get bigger at CMI, one of the things we're doing is putting a lot of pressure on our supply chain partners overseas to give us a different cost model based on a different scale. That'll enable us to be able to get some gross margin realization back in the CMI business. Ultimately, it is a lower gross margin realization business. We've got to understand it will have a dilutive effect on the groups.
Having said that, CMI's EBIT margins, the cost model attached to the operating cost model attached to CMI is very, very little. We do not have to have 100 engineering people sitting back to do product specification. A customer rings in and says, "I want 1,000 meters or 10,000 meters of 185-square-mill cable, three-core and earth in orange," and we supply it. It is not the same engineering component and that sort of thing we have in the IPD business. Another long answer for you, but.
Okay. That is good.
Anyone else? No? Very good. If that is the case, I will declare my presentation closed. Obviously, the meeting was closed before and say thank you all for your attendance today. Really appreciate the support of you guys, our shareholders, our supply chain partners, our customers, but more importantly, or as importantly, our staff. Without their commitment, without their hard work, without their effort, we wouldn't be able to achieve what we do today. I can't say how excited I am to have Mohamed moving out of us from an operational perspective straight into a non-exec role now where I don't have to, he plays in our sandpit all day, every day, Mohamed, but no, I say that tongue in cheek. I have the ultimate respect and appreciation for the man, what he's done on my career personally and the organization, and I'll be forever grateful for what he has done for me personally. He is certainly the single biggest contributor to IPD's history. Now someone else is going to be the single biggest contributor to IPD's future. Although you'll be there in some regard, lesser capacity than you have been. Actually, it won't be less. You haven't been doing much for the last 12 months anyway. With that, thank you, everybody. Appreciate it and have a nice day.