Great. Thank you very much, and good morning, everyone. This morning, I will be presenting with Adam Leake, PeopleIN's Chief Financial Officer. We're also joined by our Chair, Glen Richards, and our Founder, Tom Reardon, as well. S o thank you very much indeed for your time, and it's our pleasure to strategically announce the sale of our Health and Community brands, First Choice Care and Edmen, to Healthcare Australia. We're selling these businesses to the ideal buyer, Healthcare Australia, given that they have the scale, the market position to further grow the business and provide future opportunities for our staff. We've divested the businesses at a strong multiple of 6.2 times. That's well above what we are trading on currently. This divestment provides the capital to enable us to accelerate our focused growth plan.
This plan includes the following key sectors: the first being Infrastructure Construction, especially in Queensland, that is about to go through a major infrastructure investment boom as they run towards the 2032 Olympic Games. The second key sector is Defence and Defence Industry that is benefiting from increased investment from both the Australian government, but also the U.S. government, particularly in the north of Australia with barrack construction and defence infrastructure construction. Our third is Food Services and Agriculture. We're already a dominant player through our RWM brand, but it's an area that we want to build upon that dominance and continue to grow and add volume. And then fourthly is Professional Services, given that our professional service brand of Halcyon Knights, Perigon, and Project Partners are leading in their own right and can provide professional services, workforce support to all the sectors that we operate in.
I'll now hand over to Adam to provide more detail on the divestment plan.
Thank you, Ross. For now, I'll take you through the details of the sale of Health and Community. Our community brand, Edmen, was acquired in 2017, along with our various health brands, which were acquired between 2018 and 2021. Recently, we have consolidated our health brands into the First Choice Care brand to allow the establishment of a national health brand. While that rebranding has assisted in successfully gaining contracts Australia-wide, it remains a smaller player in the overall sector. These brands, while positively recognized, do lack the size and scale compared to key competitors. The current structural and operational challenges that we are currently facing major public and private health organizations make it difficult to grow without further scale. We have therefore agreed to the sale of the Health and Community division to Healthcare Australia.
As many know, they are a strong competitor and proved to be an ideal buyer for our clients, candidates, and our internal staff. As we turn to the deal metrics, the agreed purchase price is AUD 20.25 million in cash. There is no deferred component. This equates to a 6.2 times multiple of EBITDA on a pre-AASB 16 basis. While there are some customary conditions, we expect to fully complete by 31 December. Proceeds are expected to reduce our net debt position to zero at 31 December. This then sets the group up with a significant war chest of capital and options available in the new year. Hey, Ross?
Thanks for that, Adam. Now, let's provide an update on trading. Move forward slides and let it catch up. But before I do that, you can see on this slide here the business and the brands that we have now, and that splits into our four key division areas: Engineering, Trades, and Labour, Food and Agriculture, Education, Expect A Star, and then Professional Services to the three leading brands that I mentioned before. So overall, we've seen a general improvement in trading conditions in Q2, which is a positive sign, albeit the recovery still continues to be slow. With regard to our Engineering, Trades, and Labour business, they're on track to deliver over 50% organic growth as a result of increased hours and billing rates, especially seeing this in Queensland as construction activity starts to ramp up.
While on a lower run rate than FY 2025, challenges in our RWM business are starting to dissipate with positive net PALM visa arrivals in October and November. Drought shutdowns that we saw in Victoria and South Australia have lifted. They've also resulted in increased hours late in H1. Our Education business, Expect A Star, you know, is organically growing well, and they expect it to be up AUD 500,000 in H1 off of the back of improved market conditions. Professional Services is relatively stable. However, market conditions are improving, albeit slowly. And if we break that down further into our three brands, you know, we're seeing some really good growth within the Perigon business, but within Halcyon Knights and our IT sector, I'd say it's stable, but yet to see any sort of strong growth come through.
Overall then, when we look at H1, FY 2026, you know, our range earnings, normalized earnings range between AUD 15 million and AUD 16 million, and that includes discontinued operations and is obviously an unaudited number. So as we look ahead, again, we'll let time for the slides to catch up. You know, our focus plan, and this is part of what we've done over the past couple of months with the divestment of Techforce and now Edmen and First Choice Care, is really a focus strategy as we move forward to realize our goal of being the largest and most efficient workforce solutions business in Australia. We've broken this focus plan down into three key pillars. The first is around market dominance. You know, that is key for us when we look at each of our brands. Do we have the reputation? Do we have the experience?
Do we have the volume to dominate in the sectors that we are operating in? And when we look across the brands that we have now, we do. But just to call out some three key focus areas for us at the PeopleIN level, the first is Queensland. I've mentioned it before and will continue to reiterate it. The Queensland infrastructure pipeline is strong. It's going to be worse than a generation over the next six or seven years, and we are set up well to benefit from that. Currently, over 50% of our revenue is in Queensland. Our head office is in Queensland. Our founding business of AWX is set up in Queensland.
So we are set up well to go on this Queensland infrastructure run over the coming years, and that is a focus both for AWX, but all of our brands that are operating in Queensland will benefit from this investment. Secondly, around Defence. As a sovereign business, we are a natural home and a natural partner for our Defence clients. And as more investment comes into the Defence and Defence Industry sector, then we want to capture that both organically through our existing brands and the inroads that we've made already or the benefits that we've made already since focusing on defence over the coming years. But also, we'll look at a strategic acquisition in this space as well. And then thirdly, continuing to grow our international staffing solutions.
You know, in areas that have long-term demand for workforce and are seeing scarcity of workforce, whether it be trading in the construction space, whether it be out in the regions as well, in the food services space, we want to continue to grow that international offering to provide a solution, a long-term and sustainable solution to our clients. A nd then our second pillar, strategic accretive acquisition. Clearly, the divestments that we've made over the past few months have provided us a strong balance sheet and a war chest with which to ramp up our acquisition focus. Over the past couple of years, we've maintained the pipeline, so we're not starting from scratch from a pipeline, but now we're able to accelerate that focus.
And the key areas for us will be Engineering, Trades, and Labour, where there'll be some synergy played off the back of the core infrastructure that we've built within the business. Secondly, we'll be looking at that defence federal government platform that we can leverage to accelerate our growth within Defence and Defence Industry. Thirdly, we'll be looking at opportunities to further grow into the PALM team through diversification with potential acquisitions, and that will be a synergy place. You know, we have a really strong and leading PALM platform, and we can bring in extra volume through acquisitions, but we won't need to bring in the back office. We can leverage our own, and that will generate significant synergy opportunity.
And then fourthly, then acquisitions will be the new international staffing platform that we can acquire and bring into the PeopleIN family, and particularly to support in that engineering, trades, and sort of labour space. And then thirdly is operational excellence. You know, the business has already demonstrated our ability to run efficiently when you look at over AUD 25 million of cost out over the past three years, and some of that comes through our investment in systems. But this is a journey that is never over, and it's one that we'll continue to focus on to make sure we are leading when it comes to that net revenue margin, but also to look at cross-selling.
And I think the changes that we've made to the business and the restructure that we've made to the business over the past few months will accelerate cross-selling opportunities in the new year because it's simpler. Our strategy is simpler. Our focus is simpler. And particularly when we look at cross-selling for our Professional Service brands to our clients within the agri space, our clients within the construction space. So very exciting opportunities for us in that area as well. So again, thank you very much indeed for your time. And now we'll go to Q&A if anyone has 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. In the interest of time, we ask that you please limit to one question per person. The first question, it comes from Ian Munro from Ord Minnett. Please go ahead.
Good morning, Ross and team. Congratulations on the sale transaction. You're looking at one question might press me, but if I had to pick one, just judging and back-solving the net debt being close to kind of zero at 31 December, can you maybe just comment on sort of, you know, cash conversion during the first half? That'd be helpful. Thank you.
Yeah, thank you, Ian. Look, I think in ordinary terms, our cash collections have been good. They're pretty close to our overall guidance of 80%-90% of EBITDA conversion. If I had to say something more clearer than that, we're probably at the bottom end of that range, only just slightly. I think our first half always is a little bit more outflows in the first half and a little bit more better in the second half. So we're headed very much close to that 80% range in the first half overall.
Great. Thanks. Thanks, Adam. Maybe just one quick follow-up just with respect to the quality of the acquisition pipeline out there. You know, certain parts of the market have been through a cyclical downturn. How are you kind of seeing, I guess, the range of opportunities relative to maybe where they were sort of two or three years ago?
Yeah, there's more opportunities out there. That's for sure. I think, yeah, when you look at a year ago, there's probably expectations elements were higher than where they are now. As you point out, Ian, and I know you write about this as well, you know, the staffing industry has been challenged. So I think expectations for good businesses are more realistic of where they are now. So yeah, from the health of pipeline, it's solid. And as I said, for us, it's not a standing start now. You know, these things take time, particularly good businesses, and we've been maintaining that pipeline all the way through, even though there's been, you know, economic challenges. So that we knew when we get to this point that, you know, there's some good businesses there with established relationships that we can execute on in a timely manner if it all stacks up.
Thank you, Ross.
Thank you. Once again, if you wish to ask a question, please press star one on your telephone. Your next question, it comes from Liam Schofield with Morgans Financial. Please go ahead.
Morning, guys. Congratulations on the divestment. Just from a portfolio perspective, can you just sort of maybe put some percentages around how you think earnings will be allocated across those four key verticals that you outlined? And then secondly, just on the divestments that have taken place in the past six months, how much EBIT, what's the EBITDA bridge down as you then dispose of those businesses over the next sort of six months?
Yeah, look, thanks, Liam. I haven't done the full calculations for you, but a Health and Community business generally operated about 10% of our revenue and slightly better margins than the overall group. So obviously losing that and then losing Techforce itself has probably reduced the overall earnings by close to 40% overall. To help you get a sense of what's left and where we are, working backwards, our guidance for the full year of AUD 15 million- AUD 16 million excludes for the half year, sorry, excludes one month of Techforce operating at circa AUD 700,000- AUD 800,000. So working that backwards, we probably see the continuing operations somewhere in this AUD 8 million- AUD 9 million range for the first half.
AUD 8 million-AUD 9 million. Perfect. Thank you. Then sort of going forward, how do we think about what the new PPE will be in terms of those four key verticals? What's the proportion, I suppose, that will be contributed by each of those categories?
Yeah, I think on that, Liam, we'll provide further detail at H1 results and be able to sort of walk through that in a bit more detail than when everything's sort of washed up from these divestments and be able to articulate that to the market.
Perfect. Thanks, guys.
Thank you. Once again, if you wish to ask a question, please press star one. Your next question, it comes from Owen Humphries with Canaccord . Please go ahead.
Good day, Ross and Adam. Just on the timeline there with acquisitions given you've got the capacity there now, we'll have it there very shortly in a pipeline. I think you said it's reasonably established or identified. Do you lean in now and look to execute something in the next six months, next 12 months, or is it still somewhat unknown or unable to be committed to?
Yeah. And look, at the end of the day, we're going to make sure we buy good quality businesses. So we're not going to preempt that with setting any sort of set dates. But as you said, you know, we've done the both divestments. Now we're going into calendar year 2026 with a strong pipeline to be able to execute on that, and we'll be actively pursuing that strategy.
Good. No, that's fine.
Thank you. There are no further questions at this time. That does conclude our conference for today. Thank you for participating. You may now.