Please be advised that today's conference is being recorded. I'd like to hand the conference over to Kristy Glasgow, Company Secretary. Please go ahead.
Hello and welcome to the Monadelphous 2026 Half-Year Results Investor and Analyst Briefing. I'd like to begin by acknowledging the traditional owners of the lands on which we are joining you from today in Boorloo Perth, the Whadjuk people of the Noongar Nation and the traditional owners of country, and her respects to elders past, present, and emerging, and extend that respect to all Aboriginal and Torres Strait Islander people. Presenting from Perth are Monadelphous's Managing Director Zoran Bebic and Chief Financial Officer Philip Trueman, who are joined in the room by our Chair Rob Velletri. Throughout this presentation, the speakers will guide you on when to click through to the next slide. The structure of this morning's presentation will be similar to previous results presentations, with some further detail provided as appendices. Copies of today's presentation and associated material are available on our website at monadelphous.com.au.
I will now hand over to our first presenter today, Zoran Bebic, who will start on slide two.
Thanks, Kristy, and welcome to our 2026 Half-Year Results Briefing. Today, Phil and I will present our financial and operational performance for the six months ended 31 December 2025, as well as our outlook. We will then answer any questions you may have. I'll begin with our group performance and highlights on slide three. Monadelphous has had a fantastic start to FY 2026, achieving a record revenue of $1.53 billion for the half-year, which is a 46% increase on the prior corresponding period. We experienced strong operating conditions across all sectors, with activity levels supported by the record level of work secured during the previous financial year. Our Engineering Construction division delivered revenue of $677.8 million, up around 67% on the prior year, supported by service expansion and growing capability in end-to-end delivery, particularly from Melchor and Inteforge.
Zenviron, our renewable energy business, also saw increased levels of project activity from larger wind and battery energy storage projects. Our Maintenance and Industrial Services division reported a record half-year revenue result of AUD 852 million, up 32% on the same time last year, reflecting an increase in energy sector activity and sustained strong demand in iron ore. Earnings before interest, tax, depreciation, and amortization was AUD 116.2 million, an increase of 46% on the prior year, delivering an EBITDA margin of 7.59%.
Strong operational performance resulted in net profit after tax increasing 53% on the prior year to AUD 64.9 million, delivering earnings per share of AUD 0.652. The board declared a fully frank interim dividend of AUD 0.49 per share. We ended the half-year with a cash balance of AUD 322 million and a very strong cash flow from operations of AUD 171 million, resulting in a cash flow conversion rate of 186%.
Phil will talk about this more later. We continued to progress our markets and growth strategy. In late 2025, we acquired Perth-based Kerman Contracting, a design and construct business specializing in non-process infrastructure, with a long-established reputation for the successful delivery of site infrastructure and accommodation, bulk storage, and materials handling facilities across a range of sectors. We also acquired Australian Power Industry Partners, APIP, a high-voltage electrical contractor based in Brisbane. APIP is a specialist provider of end-to-end high-voltage solutions, including design management, procurement, construction, and renewals of power transmission, distribution, and substation infrastructure. We also completed the acquisition of Perth-based high voltage business, High Energy Services, further strengthening our electrical capability. These acquisitions support the broadening of our delivery capability and open new markets for us. Moving now to slide four.
Monadelphous has secured a healthy AUD 1.4 billion in new contracts and contract extensions since the beginning of the 2026 financial year. Strong demand for construction and maintenance services from Western Australia's iron ore sector continued. We're awarded more than AUD 1 billion of contracts with blue-chip customers. These comprise several major construction contracts, including a multidisciplinary contract for BHP's Jimblebar Train Loadout Replacement Project, with earthworks and civils to be delivered by Melchor, and fabrication and procurement provided by Inteforge. We also secured an AUD 175 million contract with BHP associated with a car dumper project at Finucane Island in Port Hedland, as well as an integrated multidisciplinary contract with Rio valued at around AUD 250 million, associated with the Brockman Syncline 1 iron ore deposit and development.
We're awarded a five-year maintenance services contract with Rio Tinto, totaling approximately AUD 300 million, to continue providing fixed plant and shutdown services across Rio's Pilbara iron ore operations. We also secured a three-year extension to our maintenance master services agreement across BHP's Pilbara operations, and we're appointed to the BHP WAIO Site Engineering Panel for another two years. In the energy sector, we expanded our customer base with the award of a four-year contract with BW Offshore to provide maintenance services at the BW Opal FPSO facility, approximately 300 km north-northwest of Darwin. We also secured a contract for the hookup and commissioning of Shell's Crux platform off the coast of WA, which forms part of the long-term backfill to Shell's Prelude facility.
Zenviron has awarded a contract with Flow Power for the delivery of the Bennetts Creek Battery Energy Storage System in the Latrobe Valley, Victoria, which includes balance of plant design, construction, installation, and commissioning. Over the next few slides, we'll cover the key areas of focus under our sustainability framework, being people, safety and wellbeing, diversity and inclusion, community, and environment. Moving now to slide five, people. Our total workforce at 31 December 2025, including subcontractors, was around 8,400, reflecting sustained high levels of activity across the business. We remain focused on investing in the development of our people and saw around 150 emerging leaders participating in our suite of leadership and mentoring programs, and approximately 340 graduates, apprentices, and trainees participating in our early career programs.
Our Registered Training Organisation engaged with over 5,000 trades personnel, with more than 6,500 training interactions during the period, comprising high-risk work license accreditation and verification of competency. We also continue to offer services such as skin checks and resources to support our employees' physical, mental, and emotional wellbeing. Let's now look at safety and wellbeing on slide six. Our high potential incident frequency rate returned to historically low levels, and the 12-month injury frequency rate at the end of December was 4.34 incidents, a slight improvement to that of 30 June 2025. In line with our guiding principle, "the safe way is the only way," we continue to implement targeted campaigns to drive improved safety performance. Our ongoing Fatal Risk Awareness program is focused on active hazard monitoring and verification of controls during high-risk tasks.
As a part of this, we reviewed our forklift operations and implemented a range of improvements aimed at preventing loss of control of loads and making pedestrian interactions with mobile plants safer. We also reviewed the effectiveness and efficiency of high-risk work competency assessments and continue to use drone technology to eliminate the need for people to enter confined spaces. We again achieved recognition for our commitment to safety, wellbeing, and innovation, with awards and nominations from various industry bodies, including AREEA, the Crane Industry Council of Australia, WHS Foundation, and DMIRS. Now to diversity and inclusion, community, and environment on slide seven. We maintained our focus on leaving a positive legacy in our local communities, strengthening diversity and inclusion across our workplaces, and progressing towards our goal of net zero.
We continue to support employment pathways and development opportunities for Indigenous Australians through traineeships, apprenticeships, and the Indigenous Pathways Program in partnership with Rio Tinto. Pleasingly, our Aboriginal and Torres Strait Islander workforce participation rate of 3.3% continues to exceed our target. We progressed renewing our Next Stretch Reconciliation Action Plan, continuing to focus on Indigenous employment, training and development, and supporting Indigenous businesses. Our spend with Indigenous businesses continues to grow, more than doubling that compared to the same period last year to around $20 million. We continue to promote development opportunities for women across the business, and our efforts were recognized externally with a number of our people honored at industry awards, including at the BHP Women in Resources National Awards and the Gladstone Engineering Alliance Industry Awards.
Our community grants program expanded to include Gladstone in Queensland, Roxby Downs in South Australia, and Kalgoorlie, Newman, and Port Hedland in WA, with eight regions now participating in the program. We also launched our inaugural local legends campaign to showcase our people making exceptional contributions to the community. To minimize the impact of our operations on the environment, we continued transitioning our facilities to renewable power with the installation of the solar system at our workshop facility in Darwin and expanded the rollout of our electric and hybrid vehicles. Turning now to our Engineering Construction divisional highlights on slide eight. Our Engineering Construction division reported revenue of AUD 677.8 million for the six months, an increase of 67% on the prior corresponding period. The result was driven by strong demand for construction services across all sectors, particularly iron ore and energy, with a greater contribution from vertically integrated projects.
The division has secured approximately AUD 770 million of new work since 1 July 2025. We successfully completed BHP's Car Dumper 3 renewal project in Port Hedland and Orebody 32 in Newman, as well as services at Rio Tinto's Western Range project in Paraburdoo. We also secured an electrical and instrumentation package at Rio Tinto's Parker Point near Dampier. Work progressed on a multidisciplinary contract at BHP's Prominent Hill Copper Expansion Project in South Australia. We also completed work at Talison Lithium's Greenbushes site in the southwest of WA. Melchor continued structural concrete works at Perdaman's urea plant located near Dampier, with Alevro providing heavy haulage services to the project. Melchor also progressed work on the Geraldton Port Maximization Project in WA for Mid West Ports Authority.
In the energy sector, we progressed construction works on modifications to the existing Woodside-operated Pluto LNG Train 1 facility near Karratha, with Alevro also providing specialist haulage and lifting services to other Woodside-operated facilities in the region. We also continued the installation and modification of essential electrical power and control infrastructure at Chevron Australia's Jansz-Io Compression Project. Inteforge continues to support Iluka Eneabba rare earths refinery project with the supply and fabrication of structural steelwork and pipe racks, and secured a two-year extension to its agreement with Origin for the supply of modularized equipment for APLNG in Queensland. In the renewable energy sector, Zenviron progressed the balance of plant works for the Wooreen Battery Energy Storage System, or BESS, for EnergyAustralia in the Latrobe Valley, Victoria, as well as balance of plant works at CS Energy's Lotus Creek Wind Farm Central, Queensland.
Work also progressed with the construction of Fortescue's North Star Junction BESS, supporting Fortescue's commitment to decarbonizing its Pilbara operations. Looking now at our Maintenance and Industrial Services division on slide eight. Our Maintenance and Industrial Services division reported revenue of AUD 852 million for the half year, up 32% as we saw strong demand continue for services, particularly in the energy and iron ore sectors. Since the beginning of the financial year, the division has secured approximately AUD 640 million in new contracts and contract extensions. A significant volume of work was delivered for our energy customers, including shutdown and other major works for INPEX, with over 1,000 people mobilized across offshore and onshore facilities over the period. We continued to provide ongoing maintenance and turnaround services for Woodside's, onshore, and offshore gas production facilities in WA's northwest.
This included preparations for shutdown activity and planning work associated with the hookup and commissioning of Woodside's floating production unit in the Scarborough gas field. We continued to deliver maintenance and minor construction services for Shell at the Prelude FLNG facility and at QGC's Curtis Island LNG operations in Gladstone, Queensland. As previously mentioned, we expanded our customer base in the energy sector by securing a four-year contract with BW Offshore. WA's iron ore sector continued to drive strong demand, we provided fixed plant maintenance services and sustaining capital projects to Rio Tinto, fixed plant services to Fortescue, and general maintenance services to BHP. For Rio Tinto, we secured a 12-month extension to provide marine infrastructure maintenance and minor projects at Rio's Cape Lambert and Dampier ports. We're also awarded a contract for modifications to the existing process plant at Rio Tinto's Hope Downs 2 project.
In addition, we continued to deliver fabrication, supply, installation, and commissioning services at the Tom Price Mine, as well as non-process infrastructure services at Brockman 4. Under our BHP WAIO Asset Projects Framework Agreement, we secured works at Berths C and D at the Finucane Island Port Facilities in Port Hedland. In South Australia, we continued at BHP's Olympic Dam mine site in Roxby Downs, as well as South32's Worsley Alumina operations in WA. For Newmont's Gold operations, we secured a five-year extension to our existing contract, delivering general maintenance services in Boddington, WA, and Tanami Northern Territory, and provided sustaining capital projects and maintenance at Lihir Island in Papua New Guinea. In PNG, we continued work for Santos in the Southern Highlands region, where we secured a contract for the demolition of the Hegigio Pipeline Bridge.
We'll now move to slide 10, and I'll hand over to Phil, who'll provide you more detail on our financial performance.
Thank you, Zoran, and good morning, everyone. The slide, slide 10 compares our financial performance for the half year ended 31 December 2025 to that of the previous corresponding period. As you can see, it's been a very strong six months from a financial perspective. Revenue from contracts with customers is AUD 1.53 billion, which is up around 46% from last year. EBITDA was AUD 116.2 million, an increase of 46% on the prior corresponding period, and results in an EBITDA margin of 7.59%. As Zoran mentioned, our strong operational performance delivered net profit after tax of almost AUD 65 million, up 52.6% on last year, resulting in an earnings per share of AUD 0.652.
The board declared an interim dividend of AUD 0.49 per share fully frank, with the Monadelphous' dividend reinvestment plan to apply to the interim dividend. We ended the half year with a very strong cash balance of AUD 322 million, which was boosted by a number of material advances received during the period. The cash balance included about AUD 20 million from the acquisition of Kerman Contracting, which was owed to the vendors under the terms of the acquisition. Increased activity levels within the business in the months leading up to 30 June 2025, so the end of the last financial year, resulted in a significant increase in receivables at that date. The collection of these debtors' balances during the six months contributed to a very strong cash flow from operations of AUD 171 million.
As a result, our cash flow conversion rate for the half year was a very pleasing 186%. Our strong balance sheet remains a key enabler of our profits and growth strategy and supports us in building a more diverse and resilient business. I'll now hand you back to Zoran, who'll provide you with an overview of the outlook for our company.
Thanks, Phil. Slide 11 shows relevant, current, and forecast Australian market conditions for our business. Pleasingly, as you can see, the sectors in which we operate continue to provide a positive outlook for both capital investment and operating expenditure over the next few years. Turning to slide 12, energy transition. Australia is undergoing a major energy transition, moving towards a decarbonized economy. At the same time, demand for energy is growing rapidly, partly impacted by the rise of artificial intelligence and the expansion of data centers.
This represents a long-term opportunity that will play out over decades to come and which will require a significant level of investment. Monadelphous as well positioned to play a key role in this transition by leveraging our core and acquired capabilities and further developing new services across the sectors shown on the slide. Our recent acquisition of APIP expands our capability and supports our positioning in the HP transmission and distribution sector. You'll hear more about progress outlook. I'll leave progress slash outlook column on the next slide. We see this as an early phase of what is expected to be a strong long-term pipeline of opportunities. Moving now to the outlook on slide 13. Long-term demand in the resources and energy sectors is expected to remain strong, supported by an improved global economic growth outlook, albeit against a backdrop of trade tariffs, geopolitical tensions, and ongoing conflicts.
High production levels across most commodities continue to drive demand for sustaining capital works and maintenance services. Iron ore prices remain firm, supporting current production rates and underpinning ongoing investment in both new projects and existing operations across Western Australia's iron ore sector, with a continued focus on productivity to maintain competitiveness. The outlook for energy transition metals continues to strengthen, with battery metal prices recovering. Over the medium to long term, development in the mining and mineral processing sector, particularly for copper, other base metals, and critical minerals, is expected to accelerate to meet growing demand, driving significant investment. The energy sector continues to offer substantial opportunities, supported by gas construction projects and sustained demand for maintenance services. We remain well positioned to support customers across the full asset life cycle, including late life operations and decommissioning.
Australia's net zero emissions objective continues to drive long-term investment in energy generation, storage, and transmission infrastructure, despite some constraints arising from planning approvals and network access. Monadelphous is well positioned to capitalize on the energy transition opportunities by leveraging our broad service capability and expanding our high voltage service offering, while Zenviron is well placed to secure further wind farm and BESS projects. We will continue to support the resources and energy sector's decarbonization projects programs, working collaboratively with customers and third-party energy providers to deliver a growing pipeline of opportunities. Pleasingly, our committed pipeline remains strong, with more than AUD 1.4 billion in new contracts secured since the beginning of the financial year. Following record first half revenue, full year revenue for FY 2026 is currently forecast to be approximately 30% higher than the prior year, with first half operating margin is maintained.
We remain committed to delivering quality earnings through a selective approach to new work, collaborative customer relationships, high standards of execution, and a disciplined approach to the allocation of risk. Supported by a strong balance sheet, we will continue to build and leverage our enhanced delivery capability while maintaining the flexibility to pursue strategic opportunities that support long-term sustainable growth. In closing, I'd like to thank the entire Monadelphous' team for their dedication and commitment, which are fundamental to our continued growth and success. I also extend my gratitude to our customers, shareholders, and many other stakeholders for their ongoing trust and support. Thank you. I'll now hand over to the operator for any questions.
Thank you. To answer question now, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. There may be a short pause while we compile the Q&A roster. We will now take our first question from the line of William Park from Citi. Please ask your question, William. Your line is open.
Hi, thank you for taking my question, Rob, Zoran, and Phil. Perhaps the first question I had was just around how you're thinking about balancing Monadelphous' pursuit of revenue and earnings growth beyond FY 2026 and balancing that out with sort of business city and productivity management. You just noted that your workforce has sort of stepped down in the last six months or so, but are you confident that there's sufficient headroom in your current workforce to perhaps deliver on another, I guess, strong growth into FY 2027?
Thank you. Yeah, I think that's a fair point. I guess the way we're thinking about it is with the top line or the revenue guidance, which provided 30% growth on the previous financial year. If you look at the growth profile over the last two years, it'll be in excess of 50%. I think that'll prove challenging to deliver growth next year. I think recognizing also that in the maintenance revenue result is a very strong result, and there is a component of work in there that's in the sustaining capital category that won't replicate in following periods. In the EC number, it's a very strong result. That'll be more a function of timing of project awards and the timing of customer commitments to projects going forward. I guess that's a challenge you're going to balance all of that.
Certainly we've seen, I mean, if you think about it another way, the way I think about it, 50% growth over the last two years, I mean, that's essentially four or five years' worth of growth in a two-year period.
Thank you. One last, my second question is around how you're thinking about the margin profile beyond this year. Appreciate that you're expecting sort of that 7.6% margin to continue through to second half. Are you expecting that to be sustainable as you move beyond FY 2026? Appreciate that a lot of this has to do with the business mix, but just wondering whether that 7.6% is sustainable going forward.
Well, we're going to work as hard as we can to try and deliver on that. A couple of further comments. I mean, we've seen a significant volume, clearly volumes helped with the amortization of some of our fixed and semi-fixed costs. The other point I'd make, which I said last year as well, probably supports this trend that we've seen in terms of margin enhancement or improvement over the last couple of years, we've got through this six-month period. Aside from levels of activity being strong, our operational performance has been exceptional across the business. That clearly supports a position on margin.
Thank you. In comparison to. In comparison to prior periods, has there been improvement in productivity or merciful cost pressure than what you've seen in the past? Because I might be reading too much into, but just looking at your outlook slide, there's not a single bulk point discussing sort of headwinds or any headwinds, for that matter. Just wondering whether you're seeing higher productivity now versus six to 12 months ago or merciful cost pressure.
I think it's a combination of factors, but I don't think it's I don't think I can attribute a significant component of the margin up to one element. If I was to, I'd go back to the point that I made just a little earlier around performance in terms of execution of work has been not just strong, but consistent across the business. And that's always a significant driver of margin outcomes.
Thank you very much.
Thank you. We will now take our next question from Jakob Cakarnis from Jarden Australia. Please go ahead, Jakob. The line is open.
Hi, Zoran. Hi, Phil. Congrats on a strong result. Can I just still stay on Will's focus on the EBITDA margins, please?
It seems like there's a little bit of a change to how you guide us. I think this is the first time that I can remember that you've given us explicit EBITDA margin guidance. What's giving you the confidence at the moment to provide that, please, Zoran? Is it a matter of the work that you can see in front of you immediately? Then, I guess, to dovetail into your answer just before, the productivity still washing through the business?
Yeah, I think it's a function that, I mean, we talked about in the outlook statement, the record level of work that was secured last financial year. Going into FY 2026, we weren't just in a strong position, but we had a little more clarity. As work is progressing, we've got so we've got greater visibility than we've had. We've got a higher level of confidence in marking a position around expectations around margin.
Understood. Thank you. Then just one, Phil, if I could, please. Just on the CapEx intensity, obviously, it's been bouncing around a little bit with some of the capital works that you guys have been doing from year-to-year. I note that the first half, you're around AUD 23 million of CapEx versus AUD 14 million for the full year of 2025. How do we think about that one moving forward, please, Phil? Are we just investing for the growth that you see in the business at the moment, or is there any fundamental step change there, please?
There's no fundamental step change at all. I mean, I think you have to look at it over a longer period of time, Jakob, rather than just a six-month period. I actually think it was a bit higher than the number that you quoted there. It's probably about AUD 35 or something. If you if a 30% growth on last year takes you to just short of AUD 3 billion, I would expect our CapEx would be around that long-term 2% of revenue, where it has been over many, many, many years. It takes you to AUD 60, AUD 65. Sort of take the first half and double it. I wouldn't expect it to be any different from where it has been on a long-term running rate.
Thanks for that, Phil. Then, I guess, accompanying that, are we expecting a few extra AUD million of depreciation in the second half just as that capital investment washes through, please?
I think comparing between the halves, I reckon there was probably a 5% or 6% increase in depreciation. I would expect that number to be similar for the full year as well.
Thanks, guys.
Thank you. We will now take our next question from Branko Skocic from E&P. Please go ahead. Your line is open.
Good morning, guys, and congratulations on a really strong result. Obviously, iron ore sustainment work remains a key focus for the business. Listening to the majors, it does sound like there's still got a lot of work to come. I'm thinking projects like Minster North, the multi-year cut-up of renewal at Port Hedland, and so forth. I'm just keen to understand, I guess, if you think we could sustain current iron ore revenue run rate for, I guess, a three to five-year period. I think you did a good job of articulating the opportunities.
I think thematically, yes, I think we'll continuously have a program of larger sustaining capital projects in the portfolios of the majors, as well as a couple of Greenfields projects in the sustaining capital space. Yeah, port upgrades. You talked about car dumpers, balanced machines, mines, more deep watering programs and initiatives. Then if you're talking about specific mine developments in the Rio, with Rio it probably looks like Robe Valley, Gudai-Darri, Rhodes Ridge a little further out. With BHP, you touched on Minster North, Trinity, probably the key opportunities. It does look at this stage, it looks like a pretty strong portfolio of opportunities.
No, that makes sense. I guess for the second question, just on the topic of labor, I'd just be interested in any areas that you're seeing specific tightness at the moment, obviously noting that the quarter commodity complex has rebounded over the past six to 12 months as well [audio distortion .
You broke there, Branko. Do you want to ask that one again?
Yeah, sorry about that. Just on the topic of labor, I'd be interested in any areas that you see specific tightness, just noting, I guess, the broader rebound in the commodity complex.
I think the labor market's still pretty tight. The way I'd frame it is we've seen a slight moderation, but it's still generally tight. The depth of the labor pool, whilst there might be a few more people in the market, the depth of the labor pool and the quality hasn't necessarily improved materially. There are certainly still quite a number of classifications and disciplines that are really, really tight. For example, electrical trades continue to be very tight, but they're not an exception.
Appreciate it. Thank you.
Thank you. We will now take a next question from Nicholas Rawlinson from Morgans. Please ask your question. Your line is open.
Hi, Zoran and Phil. Congrats on the result. Just a couple from me. How should we think about the profile of maintenance revenue in the first half and in the second half? Usually, there's a skew to the first half, but it sounds like you had a few one-off hack jobs. Just wondering how that will impact the profile.
I think the profile for the second half won't necessarily, I mean, it won't be dissimilar in the sense that some of this one-off, non-repeatable work will continue for part of the period. Turnaround activity looks pretty reasonable in the second half. The thematic for me is more around FY 2027 in terms of a sit-down of revenue for maintenance.
Okay, that's helpful. Thanks, Zoran. Just on awards, it sort of feels like you've gone through quite a heavy recontracting cycle in maintenance, and you've also won a lot of work in ANC, the book-to-bill still above 1x. What does the award environment look like going forward over, say, the next six to 12 months?
Well, I think certainly in the shorter term, I'd expect to see some more contract updates in terms of announcements in the maintenance space, as well as the awards in or construction-related awards as well.
Okay, that's it from me. Thanks, guys.
It's probably a more steady flow of awards than you saw in that you saw in the lead-up to that Christmas and early New Year period, we had a significant level of contract awards. I think it was AUD 850 million of contract awards in a three-week period. You might see that again, but it'll be more consistent, steadier.
Great. Thank you.
Thank you. We will now take a next question from John Patel from Macquarie. Please ask your question. Your line is open.
Good day, Zoran and Phil. Well done on the result. Just had a couple of questions. Thank you. Maybe just follow on from next question there. Just in terms of the bidding pipeline, any sector shifts to call out? Energy transition, again, features prominently in your presentation there. We're seeing a bit of a migration maybe into that area and maybe away from that traditional iron ore and gas area.
I think the opportunities are strong in that market, but you need to appreciate that we're building our capability and our service offering in that market. It will take some time to build a revenue profile. For us, we'll build a significant revenue profile in that market.
Thanks. Add on to that, I mean, Zoran, in the past, you've talked around some element of project delays, and that's always inherent. You're seeing clients more readily move forward with projects now than, say, six to 12 months ago.
I think if I went back six months ago, there was certainly a burst of activity in terms of project approvals and proceeding. It'll be a timing issue. It's still taking time. I'd probably make the comment that it feels like, as a general observation, it's early, but it does feel like a few of these opportunities are drifting a little.
Just the last question, if I may, just a question on margins. I know a couple of questions have been asked on this already, but I suppose the broad question is, do you still see an opportunity to improve margins in the medium to longer term? Obviously, there's a few moving parts within that, but how do you see that profile?
Yeah, I know. The question was asked earlier around factors contributing to margin and I responded with, we've got a little more visibility at the moment. There's some economies of scale. There's a mix of business in terms of the EC revenue growth. We've certainly had, and I've seen this twice already, we've certainly had really pleasingly consistent and strong performance execution delivery across the business. You know, I mean, absolutely, we've got aspirations. I'd like to grow the margins, but we've got to work hard to maintain the margin we've delivered in the half-year.
Thank you.
Thank you. As a reminder, before we take our next question, if you wish to ask a question now, please press star one and one on your telephone keypad. We will now take our next question from the line of Daniel Kang from CLSA. Please ask your question. Daniel, your line is open.
Good morning, Zoran. Sorry, good afternoon, Zoran and Phil. Zoran, you mentioned earlier that we've probably seen 50% of growth in the past. That's worth about four or five years in the past two years. Just trying to reconcile that comment with what you've got on slide 11, which looks like industry charts out to 2030 look pretty steady to growth. Should we sort of take that as your revenue side of things looking quite stable over the next few years?
I mean, that's the I mean, we're projecting out a we're trying to project out a long way. I think the reality is that that slide in terms of the outlook suggests that levels of activity across the different market sectors do look pretty strong. A small increase in CapEx and spend.
The point that you made at the start of this, we've seen a tremendous amount of growth over the last two-year period. We've got to make sure that we can stabilize the business and continue to build off that and ensure we're not putting too much stress into the business.
Yeah, it makes sense. Can you talk a little bit about your recent acquisitions, how they've performed, how they've integrated into the core business? Looking forward, any potential gaps in your portfolio at the moment that you'd be looking at in terms of M&A?
Yeah, if you look at the High Energy Services business, it's been within the Monos business for a six-month period. The integration is at the back end. It's tracking consistent with what we expected or the acquisition business case.
In relation to APIP and Kerman, essentially, they're businesses that we've only acquired and completed in the last couple of months. We're working through a process to integrate them and to start understanding how we can leverage the capability that those businesses have. Their contribution has been very modest in the last couple of months. In terms of the other part of your question, I think there are some areas more broadly we're looking at, but I talked about the energy transition market and the size of the opportunities there and where we're slowly building capability and services in that market. I think there are potentially some opportunities in that market going forward in terms of potential acquisition opportunities.
Thank you, Zoran. Just a last one maybe for Phil. Phil, in terms of cash flow conversion, obviously very strong in the period. Is there an element of seasonality? What's the sort of normalized level that we should be looking at?
No, there's no seasonality in it. I mean, if you look over a long period of time and average it out, we have a 100% cash flow conversion rate, but it can swing quite a lot between halves. If you take this last half that we're reporting on now, I think the conversion rate was 186%. If you took the calendar year of 2025, the conversion rate is about 112%, I think it was. It really just depends on your level of advances that you may be able to negotiate on jobs, how and when they unwind, how you close jobs out. Then quite honestly, the biggest factor, and it is the most simple factor, is how your customers pay you around the reporting period end.
If you get a big bill that is paid on the 30th of June as opposed to the 1st of July, it can make a big difference to the cash flow conversion rates in those periods. There is very little seasonality in it at all. The conversion rate always ends up being around that 100%, which is exactly where we'd want it to be. One of the great things about being in contracting, you've got to allocate a lot of effort to manage it and very hard to forecast.
Excellent, guys. Congrats on a great result.
Thank you. You did. We will now take our next question from Nathan Reilly from UBS. Please go ahead, Nathan. Your line is open.
Yeah, thank you. Gents, can you just help me explain what happened with the headcount, just the reduction in staff numbers? It's all over the last six months. I appreciate it. It's a point in time on both data points, but just what's going on there?
Yeah, there are probably two elements to it, Nathan. One is I don't like to use the term seasonality, but there is an element of that in terms of a component of the workforce is casual. The Christmas and New Year period, they're not necessarily paid. Your numbers look a little lighter. It makes more sense to compare December periods to December periods. Having said that, in the last couple of months in the lead-up to December, we did have a couple of projects that were coming to the back end. Numbers were coming off on a couple of significant projects. Gotcha. Okay. I presume they're ramped up again if we're looking at today's numbers. I'll be holding at similar levels, maybe up a little. Okay.
Final question. Just is there something we need to sort of consider in relation to maintenance margins? Now, I know you don't disclose those margins, but I'm just curious to get a sense on what's happening maybe under the bonnet in terms of the mix within your maintenance revenues. At this point in the cycle, is there something going on there in terms of the way you price risk, or is there a shift there just in terms of the nature of some of the maintenance projects, either smaller sustaining capital projects that you're involved in?
Yeah, I think that's an important point. When we talk about maintenance business and we talk about maintenance work, there's a spectrum there in terms of types of jobs ranging from pure maintenance through to smaller sustaining capital projects. Some of those will be fixed-price projects.
You've got a real mix within the maintenance business as well. Depending upon what the profile of that looks like, has a little bit of an influence on the margin outcome.
Got it. Okay. Thanks very much.
Thank you. I'm showing no further questions. Thank you all very much for your questions. I'll now turn the conference back to Kristy Glasgow for closing remarks.
Thank you all for your participation today. That now includes...