I would now like to hand the conference over to Mr. Tim Smart, Head of Corporate Strategy and Investor Relations. Please go ahead.
Yeah, good morning, everyone. It's Tim Smart here. Welcome to our First Half 2026 Results. In a second, I'll hand the call over to Wes. As always, there'll be time at the end for Q&A, and if we don't manage to cover off all your questions or further ones come up, of course, don't hesitate to reach out to me over the course of the day or the rest of the week. But without further ado, I'll hand it over to our CEO and Managing Director, Mr. Wes Maas. Wes?
Thanks, Tim. Good morning and welcome everyone to our first half 2026 results presentation. In the first half 2026, overall underlying group NPAT grew by 26% on the prior corresponding period. The strong first half result positive outlook supports our upgraded guidance range of 250-280 in underlying EBITDA for FY 2026. As will be discussed further, we are building momentum into FY 2027 and most notably in our electrical business, where there is material pipeline opportunity in front of us. The divestment of our Construction Materials portfolio to Heidelberg is expected to complete in the second half of this calendar year and crystallize significant value for shareholders while freeing capital to deploy in both existing and next wave infrastructure opportunities.
Notably, since listing and assuming the sale of CM portfolio completes, the Construction Materials division has delivered an effective annual return on capital employed of 56% per annum. While on MGH level overall, the annual return on capital employed since listing is 28% per annum. Finally, capital recycling continues to be a core part of how we allocate capital, supporting disciplined reinvestment into existing and emerging infrastructure sectors. Moving to slide two, this slide captures the evolution of MGH over the past 20 years +. The business all began with equipment hire and a single Bobcat and tipper. From there, we scaled into civil construction, leveraging that foundation to expand into Construction Materials . By vertically integrating quarries and concrete, and later into asphalt, we were able to lower costs through scale, as well as we generate operational synergies.
Adjacent to our Civil Construction and Hire Business, opportunities emerged in the Residential Real Estate , which then opened the door to commercial property development in associated childcare, self-storage, and industrial assets. Each phase of our growth was driven by adjacency, applying the expertise and infrastructure of our existing businesses to create value in complementary areas. Today, with Construction Materials divestment, we've crystallized a premium value, locking in 28% per annum return on capital employed since listing at the overall MGH level. This positions MGH to deploy capital into both existing infrastructure opportunities as well as the next wave of infrastructure, electrical and digital infrastructure, building on the same disciplined, adjacency-led approach that has delivered consistent returns for over two decades. Boiling it down, our evolution is a simple story of building businesses, scaling them, recycling capital, and reinvesting into areas with structural growth tailwinds.
We will continue doing this, we are excited about the next phase. Moving to slide three. Our strategy is focused on sectors with powerful, multi-year structural tailwinds. In electrical infrastructure and renewable energy, we are seeing unprecedented investment into transmission, generation, and related projects, areas where our civil and electrical capabilities are directly relevant. Digital infrastructure and AI present a new frontier, with demand for data centers and AI compute and supporting electrical equipment creating significant opportunities for an integrated business like ours. Transport infrastructure continues to be a major focus, driven by population growth and evolving supply chains, providing consistent work for our civil construction and plan hire operations. In the residential sector, population growth, migration flows, and limited housing supply continue to create opportunities for MGH property development activities.
These structural tailwinds underpin our approach, targeting sectors where we can apply our proven operating model to generate long-term attractive returns on capital. Moving to slide four, this diagram captures the way MGH has created value and continues to do so today. Build, scale, recycle, and reinvest. Across all our businesses, our primary goal is the same: enhance returns on capital employed by targeting sectors where MGH's operating model can create sustainable long-term value. Moving to slide five. This slide highlights the breadth of MGH retained operations, assuming the completion of the Construction Materials transaction. This footprint underscores that MGH continues to operate a diversified, integrated set of businesses, each positioned to deliver sustainable returns and support the next phase of capital deployment. Moving to slide six.
Turning to our first half 2026 financial highlights, we delivered underlying EBITDA of AUD 115.3 million, representing growth of 21% from the prior corresponding period and supportive of our upgraded FY 2026 guidance range. Notably, our disciplined focus on working capital saw cash flow conversion at 100%, a 19 percent point improvement on the prior corresponding period. Our Civil , Construction and Hire division delivered EBITDA of AUD 34.1 million, an increase of 66% on the prior corresponding period. That is prior to the announcement of the JLE- Firmus contract, which will positively impact the second half of 2026 and into FY 2027. Our residential division achieved 80 land lot settlements, a 31% increase on the prior corresponding period, with a strong backlog into second half 2026 and also flowing into FY 2027.
On the safety front, our LTIFR remains flat on FY 2025 levels, and our ongoing focus and commitment is to reduce this over time. Moving to slide seven. Turning now to our updated guidance for FY 2026. We are pleased to upgrade our guidance for FY 2026 of the underlying EBITDA to a range of AUD 250 million-AUD 280 million. The Construction Materials business, included in the announcement of the divestment, will continue to be owned by MGH and contribute to the group earnings for the duration of FY 2026, with the transaction expected to complete in the second half of the calendar year 2026. Contribution from the non- Construction Materials related businesses is expected to be in the range of AUD 120 million-AUD 140 million EBITDA.
Within the Residential Real Estate , we expect settlements in the range of 240-260 lots, including the build-to-rent unit sales. The service contract with our electrical subsidiary, JLE, has now commenced and is expected to contribute meaningfully in the second half of FY 2026 and into FY 2027. Finally, on the capital recycling, excluding the CM sale, we expect to achieve our AUD 200 million+ range over the remainder of the calendar year 2026, with AUD 171 million already secured or settled. Moving now to slide eight, into our business unit, business unit overviews. On slide nine, starting with our Construction Materials business and its first half 2026 results.
Revenue increased strongly in the first half 2026 on the prior corresponding period, driven by organic growth across our quarry operations, together with contributions from the recently acquired businesses. EBITDA grew 38% on the first half 2025, reflecting continued volume growth across our quarries, concrete and asphalt. Margins were slightly lower than the prior period, largely due to the higher proportional contribution from the lower margin asphalt revenues. Cash flow conversion remains strong at 99%, up from 96% in the first half 2025, reflecting continued work and capital discipline. Moving to slide 11. Recapping on our previously announced sale of our CM portfolio to Heidelberg for north of AUD 1.7 billion. The transaction represents a significant milestone for the evolution of MGH and is consistent with our disciplined approach to capital recycling.
Importantly, Construction Materials business will continue to be owned, owned and contribute to the group earnings through FY 2026, with completion of the transaction expected in the second half of the calendar year, subject to customary regulatory approvals. Proceeds from the transaction will materially strengthen the group balance sheet and provide flexibility to redeploy capital into higher return opportunities. The table here shows the financials for the portfolio sold to Heidelberg, including that return on capital in first half 2026 was 10%. As highlighted previously, incorporating the gross proceeds from the sale of Heidelberg, expected in the second half of calendar year 2026, brings the annual realized average return on capital employed for Construction Materials since listing to 56% per annum. Turning now to Civil , Construction and Hire in slide 13.
In first half 2026, revenue increased significantly on the prior corresponding period, with growth across all streams. The segment benefited from contract wins secured in the second half of 2025, particularly across renewable energy and transmission-related projects. The EBITDA increased by 66%, driven by strong contribution from our electrical division and improved utilization across the plant hire fleet. Cash flow conversion was also very strong at 106%, up from 81% in the first half 2025, reflecting prudent working capital management and improved operational execution. Looking ahead, the electrical infrastructure project for Firmus is now underway and is expected to provide significant contribution in the second half of 2026 and into 2027.
The pipeline of electrical work remains very solid and is expected to support further improvement, with opportunities for additional large-scale electrical infrastructure projects anticipated to be received in the second half of FY 2026. Moving to slide 14. As we announced in December, we were awarded an AUD 200 million contract by Firmus Technologies for the manufacture and integration of containerized PTUs or Power Cubes, together with the backup diesel generator modules. The contract commenced in January and supports an initial 100 megawatt deployment, with delivery scheduled for the end of the third quarter of calendar year 2026. We're able to fulfill this contract from our existing manufacturing and assembly facilities in Orange, Newcastle, Dubbo and Vietnam.
Through Daly's role as a manufacturer and systems integrator of modular electrical infrastructure, this contract positions MGH within the AI infrastructure manufacturing supply chain, rather than as a traditional electrical contractor. Aligning the group with structural growth in electrical and next generation digital infrastructure. Moving on to our Residential Real Estate business in slide 16. In our Residential Real Estate division, revenue increased on the prior corresponding period, driven by higher land settlements, with 80 settlements in the first half of 2026, in comparison to 61 in the first half of 2025, excluding build-to-rent properties, together with increased housing revenue. EBITDA, excluding fair value gains, increased by 51%, reflecting the higher volume of land settlements during the period.
Land gross profit per lot improved to approximately AUD 116,000, up from AUD 102,000 in the first half of 2025, supported by a favorable estate and product mix. While overall pricing remained stable, home construction margins also improved, reflecting disciplined cost control. Looking ahead, the business is targeting 240-260 lot settlements for FY 2026, with approximately 100% of those already secured. We have a strong FY 2027 carry-in, with 90 lots under contract supporting the forward growth. Initial settlements at the Ellida estate in Rockhampton have commenced in the second half, with strong underlying demand already contributing to a price uplift. Moving on to our Commercial Real Estate business.
In slide 18, in Commercial Real Estate, revenue decreased on the first half of 2025, primarily reflecting a land inventory sale in the prior corresponding period, which contributed approximately 20% of the first half of 2025 segment revenue. Fair value gains on investment properties of AUD 19.1 million was slightly down on the first half of 2025, with approximately 90% of the first half of 2026 gain relating to a property currently under contract and expected to settle in calendar year 2026. The segment recognized proceeds of approximately AUD 52.5 million from a development sales in the first half, all above book value. As part of the group's capital recycling program, crystallizing AUD 10.6 million of fair value gains that were recognized in prior periods.
Overall, capital employed is expected to reduce across FY 2026 as capital recycling initiatives exceed development spend, with the group also investigating opportunities to establish a funds management platform. I'll hand over to our CFO, Craig Bellamy, to go through the group financials. Thank you.
Thanks, Wes, and good morning, everyone. Starting at slide 20, looking at profit and loss. As Wes has already mentioned, MGH has delivered a record EBITDA of AUD 115.3 million for the six months ended 31 December 2025. The result was driven through an increase in revenue of 33% from the prior corresponding period, with significant growth in both the Construction Materials, and Civil, Construction and Hire segments. EBITDA growth for the period was 21%, with significant growth attributable to the Construction Materials, and Civil, C onstruction and Hire divisions, with that division improving by 66% from the prior period. Our EBITDA margin was consistent with the prior corresponding period. We saw EBITDA ex fair value increase by nearly 30% during that time.
Fair value gains were broadly in line with the prior period at AUD 19.2 million, with almost 90% of that fair value contracted for sale, with settlement expected in the first half of FY 2027. EPS increased by 15% for the period, with MGH's EPS growth since listing, achieving a compound annual growth rate of approximately 16%. Turning to slide 21 and looking at the group's underlying cash flow for the period. The group achieved an operating cash flow conversion rate of 100%, representing an increase of approximately 25% on the prior corresponding period. Once again, this result has been achieved through prudent financial management, driven by strong working capital control across the group.
During the period, we have reinvested cash into our residential land inventory to support the strong demand, which is anticipated to grow as we open up more geographical regions in the future. Our net maintenance CapEx for the period was approximately AUD 15 million, which is consistent with the long-term average for the group over the period since listing. Turning to slide 22 and looking at the segment cash flows. The underlying cash flow for the segments was strong, with Construction Materials and CCH at or above 100% conversion. As noted, the result has been driven through strong and prudent working capital management.
All segment cash flows improved during the period, with the exception of Commercial Real Estate , with the result largely driven through timing differences associated with the sale of a surplus land inventory parcel in the prior year, and a small working capital investment to support its delivery businesses during the period. On slide 23, looking at the capital investment for the period, MGH has invested approximately a net spend of AUD 12 million in growth and maintenance CapEx, property development, net of capital recycling proceeds. Our growth CapEx was primarily in the Construction Materials segment, as can be seen from the bar graph on the slide, our net PPE and intangible CapEx of AUD 25 million is consistent with prior periods. On slide 24, we've laid out our capital recycling for the period.
We've settled AUD 56 million of investment properties during the period, which monetized AUD 13.5 million of current and prior year fair value gains. In addition to the settled properties, we have sold a further AUD 114.7 million of property, which is due to settle across the balance of calendar year 2026, which takes our total sales to date this year to approximately AUD 171 million. Upon settlement of the AUD 171 million, we will have monetized approximately AUD 65 million worth of gains. Turning to slide 25, the capital management. At the end of the period, the net debt, excluding AASB 16, AUD 640 million, slightly lower than 30th of June. Our gearing ratio of 2.6 x sits near the midpoint of the target gearing range of 2-3 x.
The net proceeds from the Heidelberg transaction will provide significant balance sheet strength for the company going forward. We've also commenced discussion with the banking syndicate in relation to the AUD 250 million accordion facility to provide further balance sheet capacity in the interim. Our dividend for the period was AUD 0.035, fully franked, and our share buyback program remains active. Turning to slide 26 and the return on capital employed. The return on capital for the period, 10%, but of note, CCH returned to 20% in accordance with the target levels. A best illustrative example of our focus on return on capital to create long-term value for shareholders is the forecast return for Construction Materials , which is expected to deliver a 56% return since listing.
We continue to maintain our capital discipline, approving investment, and taking advantage of recycling opportunities to maximize capital returns. That concludes my presentation. I'll now hand back to Wes for closing comments. Thank you.
Thanks, Craig. To summarize the key messages, this result reflects a strong first half 2026 performance across the group, including cash flow conversion of 100%, in supportive of our upgraded FY 2026 guidance. The announced sale of Construction Materials portfolio to Heidelberg crystallizes premium value and demonstrates the group's continued focus on disciplined capital allocation and return on capital employed. A proven operating model remains aligned to powerful structural tailwinds. Our retained businesses are well positioned for accelerated growth, supported by strong pipelines and increasing activity across key end markets. Finally, we remain focused on disciplined reinvestment of capital to further enhance returns on capital employed over the medium and long term. To wrap up, I remain very committed to the business and excited by the growth ahead and the opportunities that lie. I appreciate your interest in Maas Group, that concludes the formal presentation.
I'll now hand it back to the operator and open up for questions. Thank you.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Today's first question comes from James Ferrier with Canaccord Genuity. Please go ahead.
Morning, Wes, Craig, and Tim. Thanks for your time. Could I ask you about the CCH segment, first of all? In this first half result, when you look at the electrical revenue component to the segment, it grew pretty strongly on PCP, and it was up as well on the second half of FY 2025. Was there any Firmus-related revenue booked in the first half? If not, what's driving that growth?
No, there was zero Firmus-related revenue. Growth has been in the transmission and high voltage space, but also, I suppose, across all the, all the segments of our electrical business. We have-- we are quite busy in the manufacturing space there as well.
Probably just extending that into the outlook, and again, e-excluding Firmus, you know, what's your thoughts, Wes, on, on the growth path and the visibility of growth, within the electrical part of the business?
Oh, look, the growth, the growth path for our electrical business, excluding the Firmus and data center related opportunity, is very strong. I think I've been consistent in saying before that we expect to be able to double that business over the next three to five years, maybe earlier. It has a very strong growth outlook.
Thanks, Wes. Second question, on the, on the property side of things, a really strong result there in terms of the velocity of recycling, and, and, and certainly realization of value versus book. Given you've, you've accounted for AUD 19 million in fair value gains in the first half and the visibility you have, and the guidance is given sort of for the recycling over the remainder of the financial year, what's your revised expectations for fair value gain for FY 2026?
Yes, I'd say just fair value will be similar, in the second half as the, as the first half would be our expectation.
Okay, thanks, Craig. And then last one for me, with respect to the Firmus contract and the way it's been described today, commencing January, completion in the third quarter of the calendar year, what do you think that means for revenue recognition? Should we straight line it and, and, and therefore account for essentially 2/3 of it in second half, FY 2026, 1/3 first half, FY 2027, or is there a different way to look at it?
It, it won't be-- It probably won't be quite that little, just in terms of the, the way the, the work is staged, there's, certain ramp-ups and so on like that. It may be more linear, in terms of contributions between halves, but, yeah, it won't be at 66%, so it won't be a straight, divide by nine and 2/3, 1/3 sort of scenario.
Yeah, a little bit more back-end weighted than what I've just described.
Yes. Yes.
Yeah. Understood. Okay. Thanks for your time.
Thanks, James. Thanks.
Our next question comes from Mitchell Sonogan with Macquarie. Please go ahead.
Good morning, Wes, Craig, and Smarty. Thanks for taking the questions, guys. Just a quick one following on from James. Just on the Firmus contract, Wes, obviously, you've given some specific numbers on the first contract there. Do you mind just talking to potential timing or any other color you can give us on the potential for the follow-on work for the other 500 MW? Just thinking about margins on these contracts, if you do get the follow-on work, bigger contracts, are there some scale benefits you would get for that on delivery? Thank you.
We, we expect, we expect follow-on work over the next sort of 60 to 90 days. Definitely we'll have follow-on work confirmed in this second half, which will roll out into the back end of this calendar year and into 2027. Scale, yes, we will get some scale synergies and efficiencies there. I'll, I would probably have to defer to Firmus to sort of confirm their rollout to be aligned with that.
Yeah, very clear. Thanks. We're just on, I guess, the business on a go-forward basis. You've obviously talked to the AUD 120 million-AUD 140 million EBITDA this year in FY 2026. Are you able to give us any, any guides into 2027, just in terms of, yeah, the mix of Real Estate? Would have thought resi continues to grow pretty strongly, but just unsure of what we should expect for the Commercial Real Estate book in 2027. Is that a fair base to then grow or assume some sort of level of expansion in the civil construction, electrical space as well? Thank you.
Yeah, look, we, we expect residential to continue to grow. We've got a, like we said, we've got 91 lots already contracted that roll in into 2027, so we will, we will probably be expecting, you know, in the 300-400 lot range, you know, hopefully at the, the upper end of that, because we've got a very good lead in and good visibility in in our portfolio, and I think we will start seeing the fruits of that investment that we made some years ago into those locations. They're all quite strong, and most notably, I would say Rockhampton is extremely strong. We would, we expect, you know, 30%, 30% + growth in in our residential business.
In, in the commercial business, I would say we would expect it to be similar levels to the past in that, 40-50 or 40-55. A similar sort of development profit that we've made in the past and, and operating businesses remaining the same, maybe some, some improvement or, or growth there on the commercial construction side, but, you know, not material. You know, on our, on our CCH business, we, we will probably look to rename that because the material part of that will be electrical.
It'll be electrical, civil, and hire, and we see a really strong next three to five years in the electrical space around, you know, the transmission, the, the modularized electrical manufacturing space in, and rolling that into Firmus and, and other related parties.
Yep. Great. Thanks, Wes. Just a final one for me, obviously, just following on from that, talking about the, the big pipeline that you see and, and strong growth over the next 3-5 years. Just, just in terms of your, your views in terms of, the organic opportunities, and I guess, can you give us any, any color on, just the potential pipeline of opportunities out there for, for M&A? That's all for me. Thanks, guys.
Look, I mean, everything that I spoke about just then is all organic. We will look like we have in the past to fill in parts of our supply chain and related or downstream parts of each of those businesses. We're not, we're certainly not running out of opportunities and opportunities are presented every day that, you know, we put through our, put through our investment committee, and yeah, we, we don't think that we will, we're not running out of opportunities, Mitch. Thank you.
Thank you. Our next question today comes from John Campbell with Jefferies. Please go ahead.
Hi, guys. Just on the guidance, the 120-140 EBITDA. That is, effectively all the retained segments, but pre, pre-corporate, slash, head office costs. Is that right?
No, it includes the corporate side.
That includes, so that will be effectively, effectively what, sort of Maas will look like post, post-divestment, as, as group EBITDA?
Yeah, there might be a little bit of corporate efficiency time, still work- working through that, but that's a pretty good guide. That's,-
Okay.
That's in, that's in FY 2026, you know, pre any-
Pre FY 2026.
Pre any growth or, or any reinvestment of the capital, et cetera.
Yeah. Yeah. Okay, thanks for that. That's, that's good. You've sort of touched on it already, but I'm, I might just ask it anyway. So post the settlement of Construction Materials with Heidelberg in the second half, our understanding is that you have no plans for any significant capital return at this stage. So could you just sort of confirm, A, that there's no further equity investment in Firmus beyond what you've already done? Secondly, that Firmus, if you do get a much expanded, relationship in terms of supply relationship, it won't require any material CapEx. Assuming that's the case, can you just give some thoughts about, because you're, you know, you're gonna have a very strong balance sheet with, at this stage, a lot of uncertainty for investors, I think, as to how you plan to deploy that?
Any, any up, updated thoughts on that would be really good.
Regarding the electrical works and contract works with Firmus, there's no required CapEx. We have the facilities and the capability that we can expand to meet the requirements. On the investment, or further investment, there's nothing further intended at this point in time. In regards to the reinvestment of that capital, I mean, at this point in time, we are in a position to confirm any acquisitions or where we, where we are, where we are definitively going to invest that capital.
But I can just say that we've, we've got a number of opportunities with or around the existing segments that we have today, that we can, we believe we'll invest that capital, for a sufficient return. I, and I'll just point you to the past five years where we've highlighted, we've, we've made a 28% return on capital per annum across the whole group. Where we've actually realized a sale event, we've, we've made a sale event and realized 56% return on capital. We would just guide you to the past is the picture of the future, and we're unchanged in our overall strategy. We're just, we're allocators of capital that we've, and disciplined in our approach to deploying that capital.
Okay. Thanks for that. Just quickly, last question. It's been reported that Firmus has secured, I think, an AUD 10 billion financing facility. Since that, since that announcement, has there been any further real discussions? At this stage, what you've released is just that initial 100 megawatt. Has there been any sort of update in your discussions with Firmus for work beyond that 100 MW?
There's, there's, there's definitely been discussions in, we're working, working on, several opportunities and projects. You know, we're, we, we don't have a signed contract and we, we, we can't disclose those discussions at this point in time. It'll be, that's Firmus's job to, you know, to deliver that news over the coming weeks or months. I can def-- Blackstone didn't give them $10 billion without a pipeline and without clients.
Yep. Okay, good. Thanks. Thanks very much for that, Wes.
Thanks, John.
Thank you. Our next question is a follow-up from James Ferrier, Canaccord Genuity. Please go ahead.
Thanks, James, thanks for the opportunity for a follow-up. Within the Resi business and the FY 2026 guidance, what's the build-to-rent quantum within that 240-260 settlements?
It's very small.
It's very small, James. Just bear with me.
Yeah.
I'll see if I can find for you. It's not five or 10, is that better? 10 or something in total. It's really just a sell residual portfolio, so.
I think it'll nearly be gone completely, or if not, there'll be single digits left.
Yeah, okay. That's good to know. Yeah, back on the CCH segment, or the soon to be renamed CCH segment. This business historically has had a bigger weighting to civil. Going forward, it's clearly gonna have a much bigger weighting to electrical. What, if any, changes does that mean in terms of typical contract structure? Whether it's a sort of a shift to more fixed price or whether it's a shift to more cost plus, what sort of changes do you think occur in the mix with that contract structure, typically?
Look, I think it'd be similar to the past, although the, you know, the largest growth in our, in our CCH book is the electrical book, and at this stage, it's very materially weighted in the, in the manufacturing space. You know, it's quite a positive area where we're progress payments and et cetera. And we're not taking contractor risk or site condition risk. It's a lot of manufacturing, delivery, commissioning.
Yeah, are you sort of taking on a, a fixed price per unit type contract, and, and therefore.
Yes
... the onus is on you to deliver that as lower cost as possible?
The answer is yes.
Yeah, okay. That's helpful. Then lastly, a similar sort of question, but, what, if any, changes do you see around the cash flow and working capital in particular, requirements for the CCH segment going forward, relative to where that working capital, impost has been in the past?
Fairly unchanged. Like, we're able to manage that through progress claims, et cetera.
Yeah. Okay. Thanks, guys. Appreciate it.
James, just confirming it's 11 build-to-rent. It's 5 in out the second half. We did six in the first half. That's it.
Yeah, great.
That'll be it.
Thanks, Craig. Thanks, James.
Thanks, James.
Thank you. There are no further questions at this time. I'm gonna hand back to Mr. Smart for closing remarks.
Okay. Well, thank you, everyone. Again, if you do have further questions, don't hesitate to follow up with myself, and hopefully we'll see you in the coming days on our roadshow. Thanks, everyone.