I would now like to hand the conference over to Mr. Peter Loimaranta, Managing Director and CEO. Please go ahead.
Thank you. And thank you everyone for making the time, as we know what is a very busy period for everyone. If we just jump to page two of the slide deck, look, for those that might be new to MaxiPARTS and the call, we have two operating divisions within the business: MaxiPARTS, which is a truck and trailer spare parts business, and Förch Australia, which is a workshop consumable business. So as we get through the pack, we'll drill into each of those in a little bit more detail. If we jump to slide three, please, operator.
Look, as an overview, it's really pleasing that we remain on track for our full year expectations, and we do expect to see a slightly stronger half two period as we start to get some immediate benefits from organic initiatives that we implemented in half one, that had either a marginal or negative impact on the P&L and/or cash flow during that period. So as a little bit of a market summary, now, obviously, market details are very hard to come by, so this is based on a combination of what we've seen in the market. We certainly saw activity increase and improve across the period, so Q2 was certainly stronger than Q1, which is a positive, positive trend. We have still seen inconsistencies in various geographical markets like we saw in FY 2025.
But at this point in time, we are seeing a stronger Queensland and Western Australian business and marketplace. We did start to see some reasonable recovery through Victoria during the period. Our South Australia and Northern Territory businesses remained fairly consistent, and we're still seeing the New South Wales market overall being reasonably difficult. In terms of market pricing, we have called out there that we continue to see pockets of aggressive activity from competitors. That's no different to what we saw in FY 25. We'll obviously go through detail around key achievements as we get into it, but we certainly want to call out, you know, we have increased the interim dividend by 36%.
That's a combination of both slight marginally improved financial results, as well as a change of dividend distribution policy, which we communicated our intentions to the market at the AGM in November. We did start a new greenfield site in Kalgoorlie, in Western Australia. That's commenced trading at the end of July. It's been a remarkable introduction for a business. It reached profitability or break-even point in September, and we're continuing to see strong growth from that particular initiative. We've continued to focus on our Japanese product segment, and certainly saw that grow at levels greater than 15% year-on-year in the half.
Although we had previously announced the completion of the Förch business, or the acquisition of the remaining Förch business, that did happen in July, and that was linked into a further extension of the Förch Australia distribution agreement we have out to 2032. And we certainly have implemented an increase in the direct sales team from Förch. Well, obviously, we'll talk about our outlook at the end, but in terms of our expectations for half two, you know, we do expect to see an improvement in cash conversion and Net Debt. Half one, we had some investments in Förch and investments in inventory, so we expect to see a return to our traditional levels in terms of cash conversion.
We expect to see improvement in both revenue growth rates as well as EBITDA profit margins as we continue to get benefits, both from the Kalgoorlie project, as well as the Förch Australia additional sales team expansions. With that, if we jump to slide four, the financial highlights, then look, as we put in the highlight there, consistent results, with both profit and cash reflecting investments in organic initiatives that we made in half one, that we expect to have a short term and longer term benefit, as we work through half two and into future financial years. So, you know, our revenue, our EBITDA result, our net profit before tax from continued operations all saw positive improvement, on the prior period.
Our EBITDA margins maintained 10%, which was consistent with FY 2025, despite the slightly negative short-term impacts of some of those organic initiatives. We did see operating cash come back slightly, and our Net Debt reduce slightly. However, our leverage ratio and Net Debt remains at a very conservative level. But that cash impact was obviously as a result of investment in inventory, setup of Kalgoorlie, as well as the final completion of the Förch Australia acquisition that we had in July. In terms of earnings per share, we, we saw an improvement of 8.8% on the prior year, and as I mentioned at the start, we did lift our dividend payout ratio to see the interim dividend of AUD 0.0415 per share, fully franked, which was a 36% increase on the prior interim dividend.
With that, I'll hand over to Liz to run through a little bit more about the detailed financials.
Excellent. Thanks, Peter. If we can just move to page six, please, and I'll take you through the group profit and loss to start with. At the revenue line, we had revenue for the period of AUD 139.3 million. That was up AUD 2.4 million, or 1.8%. The revenue growth there was driven by the organic project, which Peter's given a little bit of flavor on already, and was also partly offset with volume changes across key customer accounts. Looking at the EBITDA line, AUD 13.9 million for the period. Again, slightly up AUD 0.1 million or 0%, and EBIT of 10% consistent with the prior period.
We've a really positive maintaining under the 10%, given the fact that this includes the setup and build site in Maxi as well as staff and costs. Remains delivering EBITDA over short, mid, and more through a combination pricing discipline, gross profit margin benefit to do with product mix, you know, Japanese product, for example, and a continued focus of the group. The net profit before tax line on the team the group achieved AUD 6 million for the period, slightly up AUD 0.1 million prior periods. Net profit after tax operations was six, up 0.3 million on the prior. We reported a loss of AUD 3.6 million, slightly down AUD 2 million. Briefly call out the discontinuations have a negative there, just calling that out.
Non-cash, FY 2025 CapEx entry, that's come through the results this period. We've put more detail in the accounts on that. If we could move to page seven, where we've got the balance sheet for the group. The main call-out, which Peter touched on, was the investment in working capital for the period to support the organic growth initiatives. So looking at the working capital, increased by AUD 4.6 million in the half, reflective of investment in inventory across the MaxiPARTS network to support the new store in Kalgoorlie and growth in key customer accounts across the network. Additionally, we do see a seasonal increase in inventory at the half year compared with the full year position.
Other call-outs on the balance sheet, deferred tax asset line, AUD 6.4 million, that includes AUD 4.7 million of income tax losses carried forward. The financial liability is now nil. It was AUD 2.2 million at the end of the FY 2025 period, which was the remaining 20% ownership stake in Förch, which we funded from cash during the period, completed in July. Net debt position for the group, Net Debt position of AUD 8.7 million at the end of the half. That was an increase in Net Debt of AUD 1.5 million over the period, reflecting the increased working capital position for the group, along with the buyout of the final 20% of Förch Australia. If we can please move to slide eight.
With the cash flow, the main story there, the growth operating cash conversion of 65% in H1, prior halves were 80% and 88%. The call out there again is the cash invested in inventory in H1, and then we do expect to see cash conversion rates returning to 80% plus in H2. Other items there of note, the interest line, you'll see a slight reduction in the interest versus prior comparative period. That's a result of reduced rates in the fee structure on our main debt facility. Taking a quick look at the CapEx line, AUD 0.7 million spending CapEx for the period.
That reflects just sustaining CapEx across the network, as well as a little partial cost associated with the site expansion in Kalgoorlie. And you can see the financing activities at AUD 2.2 million for the remaining 20% interest in Förch Australia, again, funded from cash during the period. I'll move to slide nine. So, capital management. Again, very pleased to be announcing a fully franked interim dividend of AUD 0.0415 per share declared for the period, the interim dividend being up 36% on the prior period. As Peter made mention of, that reflects a payout ratio lift from 40% to 50% of group profits. That was communicated during the announcements that we made through the annual general meeting back in November.
Looking at the debt funding, very much consistent from where we left it at FY close of FY 2025. Total borrowing facility of AUD 28 million, with the utilization ratio of 80% at present, and the leverage ratio of 0.3x, is well below the group's capital management threshold. Looking at free cash flow for the period remaining into the business expects to remain CapEx light, as you've seen in the half year and preceding periods. Expect our free cash flow to be used towards reducing drawn debt over half two, as well as the continuation of enabling the higher dividend distribution. On that note, I'll hand back to Peter to take you through a little bit more flavor in the business unit updates.
Excellent. Thanks, Liz. Look, if we just jump to page 11, there's just a brief outline of the MaxiPARTS operations business. So as you can see there, really strong footprint on a national basis. We operate from 30 different stores under the MaxiPARTS banner. We are a distributor of both leading brands, as well as having our own private brand product labels, in the commercial vehicle space. Certainly one of the largest importers of aftermarket commercial vehicles in Australia. We also operate a large driveline rebuild workshop in Western Australia. 162,000 parts available, with 20,000 online. So if we jump to slide 12, obviously a bit more detail about the MaxiPARTS segment that we operate. So as you can see from the financial table, some positive improvement on the prior period.
It was pleasing to see the EBITDA margins lift, even though we did implement the Greenfield store, as we referenced before. You know, previously, we have communicated what a underlying revenue growth rate would look like if we stripped out the previous sales to the trailer business that we sold in 2021. 2021 or the prior year saw the last of the revenue streams linked to that particular business in the first half. So, you know, if that were stripped out, the Maxi PARTS operations business saw a 2.6% like-for-like underlying revenue growth rate on the prior year. We've touched on most of the highlights sitting in there about Kalgoorlie or Japanese growth, but it is certainly worth highlighting. We also saw significant growth through.
There's a little bit of market improvement, but certainly, there were some key customer wins and rollouts that drove the region during the period that we would expect to continue to see in half two. In terms of areas we're focusing on, we are still actively working with key customers on transitioning further revenue through that particular site. So, we expect that to continue to grow. It will have a normal profit profile. So obviously, half one was impacted by start-up costs, et cetera, and the first month or two of trading. It has a really strong rev, profit contribution profile as are in the half two. We're still seeing further customer acquisitions, and additional customer-specific site rollouts, in under...
We continue to focus on the Japanese product range, and as we've talked about previously, particular segment of our business to continue to grow in double-digit levels, and continue to grow. Inventory optimization, you know, part to drive further cash improvements. You know, we remain committed to a disciplined pricing and margin strategy, despite some of the competitive pressures in the marketplace. So then our customer inventory management system or MaxiStock, through a project to accelerate product data and cataloging, which we think will have some significance for the structure of our business. If we jump to slide, page 13, and the fourth slide, then, you know, once again, an overview of the business. We stock about 10,000 different parts in Australia. We operate this business from three different strategically located warehouses in Perth, Brisbane, and Melbourne.
It has a different customer need, so being consumables that are generally stocked, there isn't the just-in-time need that the MaxiPARTS business has, so we don't envisage further investments in sites to support this business. We are growing the national sales team that will continue to grow in future periods, and it's certainly a business that has a significant growth profile. As we put there, largest competitor is north of AUD 185 million a year in revenue in Australia. Obviously, we expect to be over AUD 20 million this year, but certainly a lot of market gain we expect to see come through that business. And a bit like Japanese, not a one-period story, it will be continuing to benefit the business for a number of different periods. We jump to slide 14. Once again, the financial data's there.
We did see the revenue target being slightly under what we anticipated in terms of low double digits, not overly material, but certainly something we expect to catch up as we come into half two. We did see a slight reduction in EBITDA margins. Obviously, the scale of this business means it is highly sensitive to short-term investments and movements. So although the investments in staffing weren't as dramatic as we made a few years ago, it certainly was still enough to combine with some other operational consolidation pieces to see a minor reduction in EBITDA margins. However, it's still maintained at a level above the traditional MaxiPARTS business. So look, as we move forward with the fourth business, we certainly expect to see a revenue lift from the natural maturity cycle of the expanded sales teams.
We're continuing to see benefits in the sales, planning, and call cycle management from the CRM system that we implemented at the end of FY 2025. You know, we expect also to see margin improvement, both as a, as a benefit of scale increase, but also we did implement some pricing adjustments towards the end of H1, that we expect to give some benefit coming into H2 and future years. We continue to work on getting efficient through, through warehousing, freight, and supply chain projects. And we've certainly got a continued project of getting synergies with MaxiPARTS, whether that be expanding the core Förch product offering through the MaxiPARTS stores. We've got a joint trade store pilot program in Truganina, and we're certainly continuing to have the businesses work together to target key customer rollouts.
So with that, if we jump to the outlook on page 16, once again, fairly consistent with what we've communicated in previous reporting periods, whether that be at the AGM or the full year. So, you know, at this stage, we expect the market to continue through of what we saw in half one, that has certainly some stronger geographical segments. It does still have some inconsistency that sits in there. We do maintain and extremely confident of reaching the full-year market expectations that were set. We do expect to see both revenue and profit improvement flow through in half two versus half one. They will come from that Kalgoorlie store profile, which obviously has a normal profit profile, but also a continuing higher level of growth at the revenue line in half two and into future periods.
We're continuing to see benefits, and we expect to see further benefits from key customer expansion projects, as well as the continued growth of the Japanese parts business, which part segment does operate at traditionally higher traditional MaxiPARTS. So, so like Förch, a higher growth profile with a higher average margin, driving some incremental improvements to the average group's margins as we move forward. We talked about Förch, so we do expect to see revenue and margin uplift in half two as a result of the expanded sales team. As Liz mentioned, you know, we did make investments in Kalgoorlie and inventory in half one. We do expect our cash conversion rates to return to above 80% levels in half two.
That stronger cash generation will certainly allow us to pay down further debt repayments, which once again will link into reduced interest profile for the business, as well as enabling us to sustain the high dividend distribution ratio, rates that we recently implemented. We don't see any abnormal CapEx or investment projects coming through in half two. With that, I'll hand back to the operator to take any questions.
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. We will pause a moment as callers join the queue. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. The first question comes from Warren Jeffries with Canaccord Genuity . Please go ahead.
G'day, Pete and Liz. Right on with the result. Just quickly, on Förch, what's the sort of headcount uplift there that you're talking about, and how late in the period did they become appointed?
Yep. Look, it was only four heads, Warren, which is about 10% of that workforce.
Yep.
Not overly significant. They did come in at various stages in the period, so it wasn't four at once. They started at the end of the financial year, with the most recent one coming in, November, early December.
Right. And I mean, I think Förch, I think there was an expectation that margin at some stage would be sort of a 20% margin. Is that still the ultimate goal there? And will that come with scale and leveraging the workforce?
Yeah, it certainly will improve. It's, you know, we'd probably expect it to be more sort of mid-teens% as we continue to pursue a higher growth profile. So, you know, as we continue to add people in, the sensitivity of that business will reduce a little bit, which should see the medium-term margins sitting sort of mid-15%s. And then, look, as there is scale and as it becomes more of a traditional profile, there's certainly opportunity to see that lift further up towards the 20% profile that you mentioned.
Right. And just jumping around a little bit as well, just the broader market at the moment, you've given us a good bit of detail there on the geographies of where things are strong. Recovery starting to be seen in Victoria, is that now muted again a bit more, or is that still sort of grinding upwards into a better environment?
So, look, yeah, generally, we see the market has improved over the financial year. So, you know, as we said, certainly Q2 was higher than Q1. December, January are quite hard periods to get a gauge on, given the holidays and the shutdown of key customers, but we certainly haven't seen anything that sees us changing our view of a slowly improving marketplace. Yeah, we certainly think the medium to normal market level is certainly a little bit stronger than what we've seen in the last 18 months to 24 months. Exactly when it normalizes, you know, yet to be seen, but we certainly have seen some positive signs of the market over the last six months.
Good one. Thanks, Pete.
Thanks, Warren.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. There are no further phone questions at this time. I'll now hand it back to Mr. Loimaranta for closing remarks. Please go ahead.
Excellent. Thank you. Look, once again, thank you all for making the time. Yeah, look, as hopefully you've gotten a feel, we are quite pleased with where we got to with half one. We did intentionally make some strategic investments that had a short-term negative or very small improvements. Certainly, the success we're seeing through Kalgoorlie is extremely pleasing. We expect that to drive some strong benefits through half two and in the future years. Likewise, the key growth project, projects in terms of Japanese parts and Förch, we expect to continue to drive improvement through the business. So thank you for your time. We do understand it's a very busy cycle, so thank you.
That does conclude our conference for today. Thank you for participating. You may now disconnect.