I will now hand the conference over to Justin Nuich, Executive Director and CEO. Please go ahead.
Thanks very much, Chester , and good morning everyone, and welcome to Mader Group's half-year results for FY25 first half. With me today is our Chief Financial Officer, Paul Hegarty. With the first half of FY25 completed, we're proud to have delivered another record half-year revenue of AUD 411.5 million, an increase of 10% versus the PCP. Despite some challenges, which I'll talk about a little later on, the key highlights for this result today are a continued net headcount growth of approximately 300 over the last six months, a record revenue result with stable margins, a return to net headcount growth in North America in particular, where we close the half-year out at a record headcount of 530 personnel, excellent cash flow conversion with a clear pathway to a net cash position in the next 12 months, and a very bright outlook for the second half and beyond.
So with that said, let's jump into it. For those who are unfamiliar with our journey, Mader was founded back in 2005 by our Executive Chairman, Luke Mader. Identifying an underserviced niche in the industry, Luke started providing flexible maintenance solutions to customers with no more than a single ute or truck for our North American shareholders on the call, some tools, and a vision. Twenty years on, that vision has come to life. Today, Mader is a diversified global business delivering technical services across multiple industries across nine different countries. Backed by a global team of 3,500 plus people with diverse skill sets, in the half we're proudly supported by over 400 customers working on more than 540 locations across the globe.
As you can see, over the years, we have continued to successfully evolve Mader from a single product business into a truly global diversified business with our unique model replicated across multiple industries worldwide. By launching fully organic startups in new markets, expanding geographically, and broadening our suite of technical skill sets, we have been able to achieve an average compounding annual growth rate of around 30% over the past 10 years. We acknowledge that none of this would have been possible without our dedicated, hardworking team, which leads me to our next slide, our specialized workforce. Touching briefly back on Luke's vision, he had the dream to build a workforce where people not only have pride in what they do, but they can get the job done working alongside their great mates.
That camaraderie echoes loudly to this day, and we're proud to lead the market when it comes to investing in our people and our culture. As you can see, 65% of our workforce are under the age of 35. While we are an equal opportunity employer and provide a myriad of options for those at any stage of life, our adventurous career pathways typically attract a demographic that are looking for more than just a job. From tailored rosters, site variety, wide equipment exposure, interstate and international secondments, and more, we invest heavily in our people to provide opportunities that are unparalleled and unmatched in the industry. At the core of this is our two culture-led programs, Global Pathways and Three Gears, which have both been continuously refined and scaled to provide the best employee experience possible. We'll touch more on these a little later.
Last but not least, our commitment to zero harm remains at the center of everything we do. With a half-year TRIFR of 4.08 recordable injuries per million man-hours worked, we acknowledge that safety is a continuous journey and we'll work tirelessly to make sure that the job gets done. Ongoing education, innovation, and investment in our Geared for Safety program and culture are key to driving improvement in this area. Before we head into the financial review, I'd like to provide a quick snapshot of our half-year highlights. We delivered a half-year record revenue of AUD 411.5 million, an increase of 10% on the prior corresponding period. This coupled with a robust net profit of AUD 26 million, up 7% on the PCP. Further, our balance sheet was strengthened with net debt down 26% to AUD 23.2 million, aligned with our journey to reach net cash in the short term.
Despite challenging market conditions following a number of site closures leading to instability in the Australian labor pool, we are pleased to have delivered a solid 300 net headcount growth in the first half. This is a testament to our ability to continually attract and retain the best talent in the industries in which we operate. For those that have followed the Mader story for some time, we have previously discussed our approach to ensuring we continue to expand our operations regardless of market conditions. The instability just mentioned led to a shift in demand profile for less experienced technicians, which impacted in particular our Trade Up program personnel. We continue to support this workforce despite reduced labor recovery through this time, and we are pleased that we did so.
The market has turned, labor recoverability has improved, and we are now able to deploy a much larger workforce than had we not taken this position to support them. Despite some residual challenges, North America returned to growth in the second quarter of FY25 with a solid foundation and positive outlook on the back of a new administration in the USA and a strong commodity prices in many of the regions in which we operate in North America. We entered the second half of FY25 with the largest headcount ever of circa 530 people, with a positive sentiment across the board. We are more focused than ever to achieve our five-year strategic plan with guidance in line with expectations for FY25. We have entered the second half with very strong headcount growth in January and February and a stabilized customer demand profile.
I will now pass you over to our CFO, Paul Hegarty, to run through the financials in more detail.
Thanks very much, Justin. And thanks to everyone who's taken the time to join us on the call this morning. I'll be going over the half-year financial performance for the group. Justin has already stolen my thunder on most of this, but I'll do my best. As Justin mentioned, we delivered AUD 411.5 million in revenue for the half, up 10% on the PCP. Importantly, this revenue growth has been delivered with stable margins. Justin mentioned earlier the impacts of our decision to hold labor throughout the period of instability, and that decision is now well and truly paying off with labor recoverability improving as customer demand returns and talent pools stabilize. North America had a challenging period with a 15% decline in revenue. However, the business unit continued to expand its headcount base and was in a very strong position at the close of 1H FY25.
Importantly, the margin profile of this segment remains strong, and as it continues to expand, we expect this will increase group margins. From a shareholder perspective, EPS increased to AUD 0.129 per share, an increase of 7% versus the PCP and in line with NPAT growth. Now moving on to our financial position. As you can see, our asset base primarily comprises cash on hand, trade receivables, and property, plant and equipment. We don't have contract positions or intangibles to be concerned about, and therefore we think we have a relatively simple balance sheet. Our trade receivables position is largely with Tier One principals and large mining contractors, and we generally don't have any abnormal credit risk profiles in the debtor book, and we have nil exposure to the iron ore operations. Property, plant and equipment increased over the half year as we invested in growth.
We added around 400 service vehicles to our fleet, taking our total to over 1,800 service vehicles deployed across multiple continents. From a leverage perspective, we continue to view our business model as CapEx light, and we closed out the full year with a net leverage at around 0.2 times. We are well supported by our lenders, in particular with our primary lender, NAB, in Australia, and we have strong working relationships established across all regions in which we operate. The flexibility that has been established within our finance facilities allows us to respond quickly to opportunities as they are presented. Finally, we announced earlier in the financial year our plan to transition the business towards net cash. This transition is well underway, and it's expected to be complete within the next 12 months. This will allow greater flexibility and freedom to make strategic decisions around future growth.
Now onto the cash flow slide. Our net cash flow from operations was AUD 37.1 million for the half. Our focus on EBITDA conversion was maintained throughout the first half. Operating cash flows before interest and tax as compared to EBITDA was 109%. This strong conversion was due to a number of larger rebuild payments from the second half of last financial year falling into FY25, as we foreshadowed at the full year results six months ago. I've already spoken about our investment in growth CapEx for the year, which was AUD 19.3 million when considering the cash flows for our investment in growth. And that's all from me, Justin. I'll hand it back to you.
Thanks, Paul. Good overview. All right, let's keep on moving on to our next slide, the strategic plan. So four years ago, the board laid the foundation for our future by setting out some key areas of focus in our first strategic plan as a publicly listed business. Since then, this has been a blueprint to guide our growth. The strategic plan set out aggressive growth targets and operational goals in four key areas: geographical diversification, service line diversification, expansion of industry verticals, and of course, to scale the existing business. Further, targets for impact were set out, as you can see detailed on the slide. With that said, we identified the need to establish a series of core building blocks to create a solid foundation for future growth, and that leads us on to slide 12 and 13, our building blocks.
Over the years, we've built a strong foundation for growth and one that goes beyond just financial metrics. At the heart of it all is our culture. Our culture is a driving force behind everything we do. Programs like Global Pathways and Three Gears bring this to life, offering our people incredible opportunities to travel the world while working and then spend their R&R with our internal adventure division, Three Gears. This kind of experience is currently unmatched within our industry. We have worked diligently to expand both programs so the opportunities are bigger and better than ever before. This has seen more than 170 employees take on both short and long-term overseas secondments, as well as an extensive array of adventures delivered. Of course, culture is just one piece of the puzzle. Another key driver of our growth is how we apply our proven business model across different industries.
By expanding into new markets, we're creating a compounding effect, diversifying revenue streams while tapping into large addressable markets. For example, in resources and infrastructure maintenance. And the best part, we're only just getting started. Over on to slide 12, we outline two more large addressable markets: energy and transport logistics. In the energy market, we have initially focused on delivering maintenance services within the natural gas compressor sector, but the entire industry is a major addressable market for us, particularly for our infrastructure maintenance team. In the transport and logistics industry, we have expanded our efforts to provide maintenance for rail and road transport, now operating across most of Australia. Given the critical role of transport logistics in Australia's resources industry, there is significant growth potential that aligns well with our existing operations. Finally, a building block that is key to future growth involves deliberate entry into emerging markets.
As necessary, we'll conduct market research into new industries and assess the suitability for the Mader business model to be deployed. We have a proven track record of organically replicating our unique business model across multiple industry verticals. Exploring opportunities outside of our core services will allow us to capitalize on extending across industry verticals and geographies, effectively creating more opportunities for our people and diversifying revenue streams for sustainable growth. In addition to enhancing our service offering, geographical expansion remains central to our growth strategy. We have multiple geographical beachheads and are always looking to enter new locations and diversify our commodity exposure. The Australian business continues to generate the largest portion of revenue for the group at 79%. We are confident in the stability of this segment and know we will continue to deliver strong results in this area.
Despite a challenging operating period for North America, they still contributed 19% of the group revenue. This is a significant runway ahead for us in this region with a solid foundation laid. The outlook is positive for the mid to long term, and our Rest of the World segment contributed 2% to revenue across the business. While this is still a modest number, it continues to scale, and the annualized revenue exit rate for the Rest of the World segment is nearing pre-COVID levels. As a business, we continually seek to improve the diversity of our revenue profile. This is a pivotal step towards achieving our FY26 target of AUD 1 billion in revenue. Through the strategic enhancement of our service offerings, we can tap into new markets that allow us to expand the group's revenue streams.
We are constantly assessing addressable markets where we can apply our culture-led business model.
This is key to driving future growth and ensuring long-term sustainability of our business. Our diversified operations will create compounding returns for our shareholders with our historical growth rate of around 30% year on year expected to continue into FY25 and beyond. If you cast your mind back to slide 11, where we first touched on our strategic plan, this slide shows our progress against the impact targets. As you can see, for the first three years of our current strategic plan, we have not only achieved but exceeded our impact targets. This year, being halfway through, we have attained 46% of the target to date. We're pleased with this result and will continue to strive towards achieving the goal and maintain this into FY26.
With low capital intensity, a unique culture-led business model, and opportunities identified to accelerate growth, Mader has the confidence to reaffirm FY25 guidance of at least AUD 870 million in revenue and an EBITDA of at least AUD 57 million. We have delivered a 10-year compounding annual growth rate of around 30%. , and as the business continues to mature, we are excited to continue to deliver the compounding effect of the Mader business model to existing and new markets. In doing so, not only will we deliver continued growth into FY25, but solidify our longer-term target of AUD 1 billion of annual revenue and an EBITDA of AUD 65 million in FY26. With the first half of FY25 wrapped up, I'm filled with nothing but confidence as we complete the remainder of the year. For current and prospective investors, Mader presents a robust investment opportunity with many prospects ahead.
Backed by a nimble, adaptable business model, we have grown to have a market cap of around AUD 1.25 billion. The resilience and hard work of our teammates shine through in many areas. With them behind us, we continue to deliver a superior service for our customers and value to our shareholders. That concludes today's presentation. Thanks, everyone, for joining us, and we'd be pleased to take your questions at this time. I'll hand it back to you, Justin.
Thanks, Justin. Apologies. There seems to be some feedback that some of the slides weren't appearing for some viewers. You may need to have refreshed your window, apparently, but that's information that's not helpful at this point in time because we've finished the presentation. So apologies for that. The slides are obviously available online, and this webcast, including the slides, will be made available publicly at the conclusion of this call. I'll get into the questions, Justin. A question from Tony Shields, a long-term shareholder of ours. "Could you comment on the TRIFR ticking above four? You take this seriously. 30% of executive STIs based on achieving a TRIFR below four.
Yeah. Thanks, Tony. Good question. I appreciate your ongoing support. Yeah, look, we did have a couple of, I suppose, some injuries that we, I guess, didn't foresee. We continue to drive our safety programs and obviously take this incredibly seriously with our app. We've had further investment in our fleet management systems, being Alcolocks and fatigue management across all of our fleet. I guess, fortunately, not unfortunately, I suppose, the nature of the injuries were generally hands and fingers, so sort of not super serious injuries. That said, any injury, we do take seriously, Tony, and we'll continue to strive to bring that TRIFR rate down and get our people home safely every time they go to work.
Thanks, Justin. A question for me from Ryan Evans, a private investor. "Depreciation expense is not reported." Ryan, you'll find that on page nine within the segment information. We hide the depreciation expenses for the half year in that note on slide nine of the financials. Another question for me from Indi from Bell Potter. "In light of the commentary on achieving net cash positive in 12 months, can you provide some comments on the CapEx outlook?" So at this stage, we're sort of guiding FY25 CapEx to be AUD 38 million-AUD 40 million. We think that's the range that we'll sit within in the next six months. And thereafter, is it in FY26 and beyond? We think a range of AUD 40 million-AUD 45 million makes sense based on the continued diversification into non-vehicle-based services. So that means we can grow top-line revenue without a CapEx requirement.
I hope that answers your question there, Indi, on that one. Justin, a question I'll throw to you from Paul Grant. "How do you reconcile the statement positive growth trajectory throughout the first half of FY25 in the US with a 15% decline in North American revenue?
Yeah, thanks, Paul. I mean, I guess, yeah, obviously off the PCP ball. That's coming off a fairly strong start of FY24. That said, yeah, headcount growth continued to be positive. We did hold some labor in North America waiting for those markets to turn. We called out at the last results call. Obviously, they were waiting on, well, I guess, an election and potential change of administration. So yeah, we knew it was going to be very quiet there for a period of time. That said, we held that labor. That's all happened now, and we're definitely seeing some more positive sentiment in the second half. So hopefully, that answers that question.
Thanks. Thanks, Justin. Probably on that same theme, a question from Marcus Burns from Spheria. Morning, Marcus. Maybe a bit more detail on your confidence in the second half in the North American recovery and where you're seeing the recovery in the USA and Canada. How do we, I guess, feel confident about the second half and that recovery that we talk about?
Yeah, for sure. Look, I guess going into the back of the first half there, Marcus, we did see a fair bit of labor held. We held that labor and paid a bit of standby for it to keep those people on our books. I guess what we've seen so far, obviously, that new administration has now been appointed. We're seeing some pretty solid commodity prices, particularly across copper and gold in some of the larger regions in the west that we work. We're seeing that standby or that held labor fairly well evaporate now. So those people are back at work. And the sentiment seems really positive. The team are up and about, and I guess all the hard work that's been going into business development over the first half is really starting to pay off.
So I think it's a really positive story for us, and we're pretty buoyant on what we're seeing going forward.
Thanks, Justin. Similar theme question. Obviously, a lot of focus on North America this morning. A question from Matt Joass from Maven Funds. Morning, Matt. Thanks for joining the call. I'll read this question out, and then I think there's two parts to this. I'll answer the first part, and you can answer the second. "North American workers are starting this half at 530. The best prior North American half in half 124 started with 360 workers and ended with 480. If we start half two at 530, then it seems like we would expect North America to be above the best ever prior half even before we add in further workforce growth. Is this the right way to think about the outlook in North America, or is there any reason this wouldn't be the case?" So there's kind of two parts to this, Matt.
The first part is the mix of revenue and where it's coming from with the FX. We need to consider the Canadian FX versus the US FX and the impact it has on a revenue per shift worked, so that's a really important thing not to forget about. But broadly speaking, your comments are correct, and Justin, anything further to add to that?
No, that's probably a very fair comment there, Paul. Yeah. And again, we're sort of seeing, obviously, much stronger Canadian growth than we are US growth. That's what we're seeing the US come back on now. And again, as Paul said, as that labor gets back to work and we see some solid headcount growth in the USA, that affects the situation.
Matt's got a follow-up here, a bit cheeky. A bit of insight into the second half. What are we seeing North American headcount growth continuing at a pace in January and February? How are you feeling about it?
Yeah. Look, the second half kicked off really well, Matt. Exact numbers will save those. But look, obviously, you're seeing huge headcount growth. Canada in particular is going extremely well. The Global Pathways team are pretty much flat out trying to keep up with work demand up in Canada, which is a problem we love to have. Again, USA back into growth, getting some of that idle labor to work and looking at some real growth in the USA as well, sort of as we continue into the second half.
A question from John Ferguson from the Australian Shareholders Association. "You are now a mandatory reporting regime for climate-related issues. How are you handling this and how are you handling emissions reductions in the business?" I'll grab that one, Justin. Morning, John. Thanks for joining the call. Yes, we are a mandatory reporting regime for ESG reporting. We are Group one, and therefore, our first report will be FY26. We have an active workstream within the group that's working around emissions tracking and the impacts of them being audited, obviously, in due course. And we will comply with those requirements as you would expect we would. Another one here from Jonathan from Sora Peak Capital. Morning, Jonathan. Thanks for joining the call all the way from New York. "Admin expense for the half declined by nine mil year on year.
Any thoughts you can share here?" The question or the answer there, Jonathan, is really around how we incentivize and remunerate performance. The way our remuneration structures work is it generally links to NPAT growth, and it scales exponentially the higher the NPAT growth as a percentage on the PCP. This year, we're looking to grow at circa 7% of the NPAT line, 10% revenue in the first half, which is by far and away a result that is not consistent with historical growth rates. For that reason, incentive structure payments, which are a large part of our total remuneration package, will decline in FY25 as a result of overall business performance.
As a result of that, business performance has come down at the top line, and therefore, the administration expense or the bonus expense will mirror that reduction, and it'll be a reduced bonus payout period at the end of this financial year based on current performance. Hope that answers that question, Jonathan. Question from Matt Chan from Moelis. "Are you able to talk through some of the verticals on the growth pillars, things like transport and logistics markets, etc.?
Yeah, no worries. Thanks, Matt. Yeah, look, absolutely. I guess there's probably a few pretty exciting ones as we're growing. Our ancillary service departments continue to grow and split out and continue to evolve. Infrastructure maintenance, we're super excited about that for sort of half two and into FY26. We've really postured those teams and front-end loaded the, I guess, the management structure to fuel that growth, and we're already seeing some really positive signs there. Heavy road transport, again, within and outside of resources, we're seeing some really positive, I suppose, BD results coming through, and our ability to recruit and fill those roles has been really exceeding our expectations as well. So between that and a few of the other small ones, that compounding effect that we talk about is alive and well with it. So hopefully, that answers that.
Thanks, Justin. Looks like we've got one final question. Ari from Barrenjoey. You've answered the first question already there, Justin, but I'll take the second one. "How are you thinking about year-on-year growth in the second half of 2025 across North America and Australia?" Yeah, it's an interesting question, Ari, that if we think we can get equal to or the same out of Australia in the second half, we'll be happy with that result. And then from a North American perspective, if we can get the FY25 total, FY25 period back to the FY24 total period, we'll consider that a very strong result. That puts North American revenue at sort of AUD 95-ish odd million in the second half, and that'll round out the full year in line with guidance if we can achieve those results. Let me just check to make sure there's no further questions.
Nothing has come through. We will leave it there and hand it back to you, Chester.
Thank you very much. We now have no more questions. Thank you for your participation. You may now disconnect.