Okay. Good morning. Thank you, everybody, for joining us for our half-year 2025 results and briefing presentation. This morning, we've released our Appendix 4D as well as our ASX release in terms of the overview of our results. Imminently now, this presentation will be placed on the ASX platform for people to view. Obviously, it's a situation now that we're quite pleased with in terms of our half-year results and presenting ourselves for 2025. I'll take you through an overview of the group today as well as our performance financially and both strategically and provide an update of our trading period looking forward over the course of the next six months, but also thereafter through FY2028, which is where our strategy is.
There's supplementary information that is provided, and it's available for people to be able to view at a later date after this presentation is obviously available to you on the ASX. First of all, let me take you through a group overview and just remind you of the organisation that we are today. Clearly, our goal is we have developed a company that is of quality, and we want people to continue to invest in. It's now one of Australia's largest distributors, but our aim is to be the market leader for automotive, industrial, safety, workplace, as well as consumer everyday products. Ultimately, our purpose is to provide products to businesses, trade professionals, as well as retail consumers.
We use a terminology now made for everyone, used every day, with a reputation known for trust and excellence so that all stakeholders see us as a company of choice, whether that be customers, shareholders, suppliers, employees, or other stakeholders, particularly in the communities that we serve today. The experiences that we're looking to bring not only to our customers but to the portfolio of stakeholders is really about delivering a really good return, not only to shareholders, but being responsible in the way that we go about the management of our company, acting with trust and integrity in the way that we go about all our dealings. Most importantly, obviously, looking after the people and providing a place where people will want to work. Over the course of the period since 2022, we're showing here our share prices obviously significantly increased.
Our total shareholder return in the last 12 months is over 100%. Three-year return is over 300%, which is an outstanding effort for our organisation. The share price was AUD 0.54 yesterday at 117 million shares with a market capitalisation of AUD 63 million. I have seen this morning since our release that our market cap has actually increased for the first time over AUD 70 million, which is an outstanding effort for our organisation. We have consolidated a number of our businesses now. You will see these brands on the bottom left-hand corner of the presentation throughout the slide deck, but also you will see that moving forward. I really appreciate the ongoing support of some excellent fellow directors. Chris Wharton is the Chair of this organisation since 2017, John Groplie, the same period, and Simon Poitevin, who has been with us a bit over three years now.
Those gentlemen are quite involved in our business, not only from a day-to-day point of view, but their strategic guidance has been really critical to the success of where we are today as an organization. If I can just sort of take you through, we're a well-positioned company. We're in a period of significant momentum. We continue to operate in a large fragmented market that has an AUD 64 billion addressable spend. We continue to go from strength to strength. We've delivered record company performance. Our diversified portfolio is clearly resilient. Our wide range of everyday products is resonating with our customers, and we are taking market share. Our opportunities to not only improve our returns and strengthen our portfolio have been instrumental in developing not only our growth platform but also the value that we offer to customers. Our midterm growth strategy maintains.
We're looking to double the size of our sales profile today. We have a turnover of AUD 150 million on an annualized basis. Our target is AUD 300 million and 8% EBITDA and 5% NPAT. That is by FY2028. How do we achieve that? Obviously, this is very much aligned to delivering shareholder value, whereby we're looking to extend or advance growth opportunities. We have clear competitive advantages, which I'll take you through shortly. The customer value and the better experiences profile and thing within our business is absolutely resonating as part of our DNA. We are expanding market share. We've continued to invest in automation and digitizing our operations. Clearly, as I'll demonstrate shortly, we're benefiting from productivity initiatives, which is not only bringing us our cost-to-serve low, but also our ability to respond to customers is improving.
All those initiatives that we've been outlining in our annual general meeting in November and the prior period in August are all coming to fruition. That is a result of the earnings profile that we have now delivered. Our businesses today operate in two segments. We are a distributor, we are a wholesaler, and we're also a retailer. The two segments that we operate in are the industrial side of our business and the consumer side of our business. Industrial is our heritage, and consumer is part of our acquisition that we completed in June 2024, which has contributed to our numbers. Our ultimate platform still has quality high businesses. We also have a diversified portfolio, and we also have everyday products. The theme of our channels to market is very similar.
Whilst our distribution channels might be different, the offer that we put together can be holistic across the organisation. We have 57 odd branches across our portfolio. At June 30, that's now down to 51. We have almost 3,310 outlets that we range our consumer products in today. Our portfolio consists of our own company operations as well as independent members or licensees that operate under our brands. We sell our products through reseller network. We sell our products on online channels. That all aligns to the wholesale, retail, and business or B2B element of what we offer to our customers today. Moving past that into our group performance, let me give you a high-level overview of the half-year. Significant growth across most metrics. Our results reflect great execution of our strategy and cost reduction.
Our performance also highlights the resilience of our everyday offer, as I mentioned earlier. Our profit has increased by 200%, and we've maintained really good, strong capital management throughout that process. Both our industrial and our consumer division performances have been exceptional, and they've obviously contributed in growth to the result that we have. We have also won new customers. We've also extended or renewed new contracts, and we're also penetrating new channels that have contributed to this number. Previously, our EBITDA has been well below 6%. It is now for the first time we've achieved a 7% level. Our target is 8% by FY2028. We are actually ahead of where we thought we would be. Most importantly, which is highlighted here in the center of the page, is for the incremental revenue that we've achieved of about AUD 15 million from 1H2024 to 1H2025.
We've actually delivered a 14.6% EBITDA margin, which is an outstanding effort, but also a result of the scale of our cost base. We've been talking about that for a number of years about getting to that certain size, which is volume, price, and cost. The scalability is a key aspect of that. Our cost of doing business has dropped from 24.4% to 22.5%, again, demonstrating the leverage of our cost base and scalability. Most importantly, the two-division structure is demonstrating strong value propositions for customers, both with suppliers as well. The strategic investments that we've made are also resonating, and that's improved by productivity gains as well as supply chain efficiencies and store refurbishments. The digitalisation of all of that within our operations, as well as continuing, which we've almost completed, our right-sizing, has contributed to our overall result.
Most importantly, as we look forward, will we continue delivering that? The answer is absolutely yes. There are new exclusive brands that are imminent to be announced in the near future, which not only increases our margins, it expands our market share, and it will enhance our portfolio quite significantly. We are tracking the plan across all our long-term metrics. Most importantly, we continue to reinforce our guidance in FY2028 of AUD 300 million in revenue, 8% EBITDA, and a 5% NPAT. With that summary, here are the headlines: AUD 71.5 million of revenue, and that's up 27%. We also show a gross sales figure of AUD 73.5 million, which is before customer rebates. EBITDA is up 78% to AUD 5 million, and that's a company first. Our net profit after tax has increased almost 250% to AUD 1.6 million.
That has, in fact, beaten our full year 2024 result, which is about AUD 1.4 million. Therefore, it's an outstanding effort for the people who work within our business to be able to deliver that result, but also the strategies that we put in place. Our EPS is up 200% to AUD 0.0136 per share. Our operating cash flows before interest was a gain of 10%, sorry, 8.8%. After interest costs, it's down to 3% to AUD 2.8 million. Our cash balance, however, has increased by 18% to AUD 10.4 million. We have maintained really strong capital management settings. Our total shareholder return has obviously increased. As I mentioned earlier, that's 103%. We have achieved great execution from quality businesses in the products that we sell, and we're taking market share. Not only that, we're expanding into new addressable markets with contracts that will fall into the new year.
An outstanding effort and an outstanding result. I'll just take a drink of water for a moment. Our progress on strategy, and I won't go through every line item here. It will be a takeaway of it. 95% of all our orders come from repeat customers. Our average order value per active customer increased 24.7%. Our loyalty rewards program for our members was launched in December, and we've spoken about an opportunity pipeline of AUD 60 million in sales. That is part of that program, and that's now commenced. Our average order value per employee has risen by 33%, and that's driven by the benefits of productivity gains through new technology that we put in place to manage customers and also order management. That's significantly improved the way that we go about our response times by 64%.
It has also reduced our cost of managing our operations, which, as I mentioned earlier, has reduced from 24.4% to 22.5%. 95% of our customers now sit with a new program that we launched, customer management system, which is AI-powered in our industrial business. 95% of all interactions is actually driven and pushed through that platform. From an exclusive brands perspective, in our AGM, we spoke about our strategy and increasing margins. 40% margins are obtained at a wholesale level from exclusive brands, with another 30 to 50% margins available on top of that if we sell through our own company operations and obviously through member-based stores. We have really put a powerful structure in place by having a Hong Kong office, which is managing private label product and own label products, so that provides a growth platform in the future.
We're also targeting 10% of our total FY28 number of AUD 300 million to be exclusive in our own product range. That sits at around about 5% today, but that's 5% of AUD 150 million. We did launch a new product within our consumer technology business called Delco. Delco now is a product that commenced in December and ranged in IGA stores in Western Australia. That is a rollout program that will continue across Australia, not only throughout IGA, but it will be rolled out across a host of new convenience stores. It's a quality product. It's well priced. Its packaging is very aligned to sustainability. The price point, most importantly, is at that level, particularly in the current economic environment of being a product of choice.
Our new hire business, which we spoke about previously, that can generate a gross profit margin in excess of 85% with a payback period of between 11 weeks and 13 weeks, is the technology is a little bit delayed, but that is imminent in terms of its launch. Our progress and strategy has continued to be very strong, and there's been a number of activities that not only have benefited in the first half of 2025, but will benefit in the second half of 2025 and beyond. From a detail level or a deep dive into our divisional highlights, we're now providing some visibility to you by operating brands. Our Heatleys Industrial Business, a United Supplies company, which was consolidated of four brands into one and launched as a new brand.
It has got a really good or really strong value proposition, new ranges, but also a new platform for us to be able to grow our member stores and our retail reseller network in our industrial space. In the wholesale division, that is where we are pushing our brands from an industrial perspective. As I said earlier, we have a number of new brands that are imminent that will be pushed into that platform. We have launched a new rewards program, which is state of the art and absolutely taking shape that will be rolled out to customers in the near future as well. The Force Technology business that was added in June this year is also having growth, winning market share, and also winning new brands. We are getting growth across the major chains of JB Hi-Fi, which has just come out with really good results, 7-Eleven, Coles.
Vodafone is one of our major customers, as well as Officeworks and also with Telstra. With that taking market share, we expect that a number of new customer wins will come forth in the second half of 2025. We are going to continue to grow and invest in that business. That has been a really good success story for us. From a brand perspective, we will show independently this column in future, whereby we have existing brands in the consumer range. There will be more brands added to that in the consumer as well as the industrial range. As I said, they will be imminent. The benefits of that obviously allow us to be more competitive from a pricing point of view.
It allows us to lift higher margins, but also allows us to be able to be innovative with the range and the expansion that we have available that is driving ongoing demand. The last comment that I'll make around our hire business is that we're looking to push the hire product as well as the business model throughout 20 stores before the 30th of June. Whilst it's been very successful in the first second half, there's a lot of really in the first half, sorry, there'll be a lot of good things coming out in the second half as well. With that, let's talk about financial performance apart from the numbers that I've already explained. Our earnings, as I've said, EBITDA is AUD 5 million over AUD 71.4 million revenue with a AUD 1.6 million net profit after tax.
That's generated a gross margin of 29.4%, which is up slightly on the first half of 2024. The cost of business, as we've said, has come down. We've received a 2.2% impact of revenue and our capital employed, which obviously when I made the comment earlier around we have strong management processes in place, that's increased to 18.75%, up from 12.16% in previous periods with single-digit numbers. We continue to manage that exceptionally well. Capital expenditure was AUD 1.27 million. We have given guidance previously of an annual figure of AUD 1.8-2.2 million. The capital expenditure was really about investing in technology as well as store refurbishments and as well as providing new product ranges that I've mentioned already. Most importantly, I guess our net debt has decreased to 1.1 times. Previously, that was up at 1.7. We have continued to pay our debt down.
It did increase by AUD 6 million in the acquisition of Force Technology. Most importantly, with that, we have hit another milestone whereby our fixed debt facility was paid down by AUD 1 million. That means now that all our facilities are variable and we can manage our working capital aligned to, obviously, our investment in the future, but also with our inventory, which has about AUD 22.5 million at the moment. I guess overall, those metrics are really nice and heading in the right direction. To give you a bit more visibility on our performance, today, 70% of our revenue is within our industrial division. 30% of our revenue is in our consumer division. You can see underneath the pie chart that there is growth on an annual basis and where we sit already in the first half of 2025.
Taking you into the bar graphs, EBITDA margin, net profit margin, as well as net profit after tax margin, you can see our full year results previously, as well as where we sit today after the first half of 2025. Our net profit margin before tax and after tax has already surpassed previous full year results in a half year. You can see that our EBITDA margin will do exactly the same. From a percentage point of view, you can see that our net profit after tax is at 3% or a bit over before tax, sorry, and after tax is 2.2, as I mentioned. Really nice growth metrics, really nice trajectory, spit it out, across all our metrics. From a sales point of view, this is a little bit further detail that we're taking into.
Our distributor products, our exclusive range products, we'll continue now to provide visibility of those so that our shareholders will be able to determine what our growth is based on our strategy. Our two operating divisions, which are now segments and segment reporting within our Appendix 4D, we will continue to provide visibility on, as well as our network expansion. Guiding our FY2025 numbers, as well as our first half of 2025, as well as our first half of 2024, you can see that there is ongoing growth. We have been solid in our performance. We have been streamlined in operations. The consumer growth, I have mentioned through all the major changes, continued, particularly supported by the launch of our own private label range. In our streamlined operations, we closed our Port Hedland store in Western Australia.
We closed six on-premise customer stores, and there's also five independent members that are no longer part of our group. That reduced our sales by AUD 4.8 million, which is no longer continuing, and AUD 10.8 million annually. Our previous underlying revenue was AUD 159 million. It's now about AUD 150 million because of that right-sizing activity. Most importantly, you can see that we've had no impact on our profitability, nor on our cash profile, nor on our inventory profile. We have managed our operations really well, and we continue to right-size based on the best outcomes for the business. We continue to invest in areas that are going to give us the biggest return, and they have to hit particular metrics for us to continue to invest in those areas.
From a working capital and a cash flow perspective, I've already covered most of these areas already, but one of the areas that I'd like to make point of, again, is that we have repaid our fixed debt of AUD 1.02 million, and we also paid out our maiden dividend, which had a cash impact of AUD 0.62 million or AUD 620,000. Not only did we improve our operating cash level, we invested for them. We had previously AUD 1.7 million in capital expenditure, but we've also paid out fixed debt, and we've also paid out dividends. With all that, we've actually continued to provide really strong working capital management. From a balance sheet and a debt perspective, I've already covered the majority of this, which you'll be able to take away and review in future.
One of the things that obviously we're looking at is with the acquisition of Force Technology, our interest rates increased, or cost of interest increased by AUD 400,000. Our average cost of debt is sitting at about 6.4%. That is always an area we would prefer to pay less interest and return the funds to shareholders. That will be a focus for the future. We also had the benefit of a foreign currency hedging going within our international purchases, and that has benefited the first half. There is no certainty that that will benefit the second half, but obviously that is part and parcel of our normal day-to-day operations within our business. Our capital management framework, on the left-hand side, where we invest our capital, we are investing in our business. Technology is a key of what we do, as well as productivity stores.
The fit out of those stores, as well as the ranging and the merchandising within those stores and the supply chain element, are really the fundamentals of how we operate our business. Key growth projects, as well as acquisitions, are part of our organic and our inorganic strategy to get to AUD 300 million. We do have a target of at least 30% of free cash flow that's going to be repaid to shareholders with ordinary dividends. That obviously is based on all our forecasts and our projections moving forward, and that can be altered at the discretion of the company based on its future needs. In saying that, we obviously maintain a really strong working capital position. Our allocation of right-sizing, or we should put our capital expenditure, is really broken up within those four areas.
In the middle of the page, you can see that we have a reasonable spread across all our investments. On the right-hand side, you can see that we have had no dividends in the past. It was AUD 0.84 per share. AUD 970,000 was our total amount that we distributed back to shareholders, of which some of that was taken up in a dividend investment plan. Our capital management framework is strong, and that's the visibility of how we would go about that in managing our business day-to-day. From a trading perspective, in terms of an update and our outlook, I've already mentioned that we've surpassed our performance of FY2024 from a profit perspective. Growth has continued in the first eight weeks of the second half of 2025, with our revenue up almost 34% in the same period of 1H2024.
We're on a great trajectory, or trajectory, sorry, and we're in a period of significant momentum, and we're definitely capitalizing on those opportunities. We're maintaining our guidance as a percentage of revenue between 1.5% to 3%. It's prudent to do that at the moment. Our capital expenditure, as I mentioned earlier, is between AUD 1.8 million-AUD 2.2 million after spending almost AUD 1.3 million in the first half. We are pursuing a number of new opportunities, both in existing markets and addressable markets, expanding our range. We're looking to optimize not only our network, but expand our network, and digital channel growth is really important to our future. At the bottom here, I just want to make a key point. We're actively negotiating new exclusive product arrangements that will significantly enhance our portfolio. It will expand our market share, but it'll also improve our margins.
We spoke about this at our AGM. I've spoken about this earlier in our presentation. This is a catalyst of our business moving forward in the rest of 2025, but also heading to 2028. Watch your space. What are the closing messages? We're in a period of significance. We'll continue to execute on our growth strategies. The period that we're in is having significant momentum in a well-diversified portfolio positioned to continue to win market share. We're focused on delivering long-term shareholder value. That's by delivering growth opportunities, strengthening our existing businesses. It's winning more market share. Clearly, the competitive advantages that we've spoken about in previous years have now started to resonate in our everyday products offer. There are some economic challenges that clearly are still out there. Fortunately, the demand for our products is really robust.
We have non-discretionary items in a lot of our businesses, and the end markets that we predominantly will play in or do play in are still robust and delivering the results. We remain on track to hit our FY2028 goals of AUD 300 million in revenue, plus 8% in EBITDA and 5% net profit after tax. That is our midterm goal. We will continue to update our outlook as we go along. The catalyst of delivering on growth, I guess in the future, if I could summarize all that up, is we do have really good, high-quality businesses. Our portfolio is diverse. The products we have have everyday needs. We have new exclusive product agreements that are imminent. We are going to continue to digitize our operations for productivity and efficiency to bring down the cost of doing business.
The launch of our hire tool and equipment business is going to generate significant returns in the future. The technology piece of that is in its final stages of completion. We are looking to grow in new channels, as well as existing channels, with the products of exclusive and own-range nature. We will grow our store network and increase the number of stores that we have in operation, both from a company point of view, an independent licensee or member-based, as well as our retailer resale stores, and also online marketplaces. We have previously operated in our own online company operations. We are looking to expand that to third-party marketplaces selectively in strategic arrangements. That is another initiative that is imminent in its announcement. Our distribution model continues to evolve as our portfolio gets bigger.
We will have a combination of stock that is in our stores, in our distribution center, in our resellers' distribution centers, but also we're looking at dropshipping. Dropshipping allows us to reduce the cost of inventory and working capital requirements. It allows us to be more expedient in our delivery to our customers. Most importantly, it allows us to be more integrated with our suppliers to provide a market-leading offer. The last thing that will be a key catalyst is our customer loyalty program from a B2B space. What we're bringing in to business customers will be first-to-market, is to entice customers to spend more with us. It's a volume-based, price-based benefit scheme that will allow us to get more share of wallet. We, on average, are looking to double the size of the volume of orders that we receive today.
As I've shown you in the earlier release, our order profile is increasing, and this will be a catalyst behind that. A number of good things, excellent result that we've had in the first half of 2025. I expect the result to continue to FY2028. It is a journey to that time. Most importantly, I really would like to thank the contribution of all our employees, my fellow directors, the support of which they've been excellent in its execution of our strategy. In a tough market that by all strength, we're gaining market share. With that, I'll pause, and we will go to questions, which is available through the platform that you've entered on. If you have any questions, if you can answer those, we'll just take a couple of minutes, and then I'll come back and provide any responses accordingly. Thank you.
Recording in progress.
Okay. We have a few questions. Some of those are going into a bit of detail. Obviously, there's a fair bit of detail that sits in there and explanation that sits within our Appendix 4D. I will be probably a little bit selective because there's too many questions that need to be answered, but some of those are consistent. Seasonality is one of the questions that comes forward. Clearly, there's two aspects. Our industrial business previously is about 45% of our full-year revenue in the past, and that maintains what our guidance would be. We've always said that we'll have a second half, a bigger result in our industrials that things have been consistent for six years now. Within our consumer business, there is a number of underlying day-to-day repeat business factors that occur.
There is seasonality that comes in with an Apple iPhone 16 launch, which occurred in October. We have another launch of Samsung, which occurs in January, the S25. In between all that, obviously, we have the launch of our ongoing private label products or own-label products as well. The timing of those can be first half, second half, depending on its completion. Whilst there are fixed dates, there are also some variable dates that sit with that. We look at the four technology businesses, its ability to be able to produce an annual result, which we've provided guidance to previously of around about AUD 44 million in sales, and that's on track to deliver that.
Most importantly, that business we track in sales because there are customer rebates there, which then are deducted for the purposes of revenue recognition, which is about AUD 2 million in the first half. Most importantly, we're focused on profitability and have been focused on productivity initiatives and our investment in digitalization. That in its own right has been about becoming more efficient, noting that in industrial business, we took out almost AUD 5 million of revenue through right-sizing. From a light-to-light perspective, we're probably up 10%. That's one answer. The next one, if I can just sort of go through here, there is a question around mid-year dividend. No, we're only allocating full-year dividends at the moment.
Obviously, we will look in the future at mid-year dividend, but based on all the strategic initiatives that you've just seen, based on our future, it wouldn't be prudent for us to be looking at the half-year. Therefore, we will be looking at continuing our dividend, but it will be on an annual basis. The integration of the consumer business and the industrial business, there is no integration per se. They have their own particular markets, but there is significant opportunity in cross-selling. Cross-selling is about providing all products that are available across the total portfolio, but how they go to market within our industrial business, separately within our consumer business, has a different customer profile. A large number of the products that the consumer business has is available within the industrial business.
Conversely, there are select industrial products and safety products and workplace consumables that would be available to the customer base of the consumer business. Therefore, cross-selling is still a significant element and part of our growth journey, particularly from a revenue and a profit perspective. That is how we go about our review of the industrial side of customers, the consumer side of customers, and also the products that we sell. There is a question around competition. We have a whole host of competitors. From a retail space and the industrial side, Total Tools, Sydney Tools, we are direct competition there. On the B2B side, we are up against Wesfarmers Industrial and Safety, also against AWM Supply, but it is a fragmented market. The largest player in a AUD 64 billion industry is less than 4%. Therefore, there is a wide range of competitors across different channels and different platforms.
From a consumer perspective, we take a product to market. In our consumer or, sorry, in our convenience channels, we have different competitors. In our business channels, we have different competitors. In our consumer electronics channels, we have different competitors. We have a number of different competitors, but no single competitor that actually covers all channels. There is a question around why wouldn't Officeworks buy direct? Why wouldn't they buy direct? Actually, they don't. That's not their business model. Their business model is actually providing retail stores, products in the stores, and attracting customers. They may have some of their own range, but not in the categories that we sell, and we don't see them doing that in the near future. It's a specialty. We've got 30 years in the businesses that we've acquired that have been developing this.
We've got 14 different factories that operate within China that we have strong relationships with. Not only that, we have contracts that mitigate anybody else being able to buy from those particular factories. We are well protected by bringing our own range of product into those markets. You could say the same of any brand anywhere globally. Why wouldn't people go direct? They don't because that's not their business model. I'll just have a look through a couple of other questions. Probably the last one that I could answer here is the customer loyalty program. The customer loyalty program will be launched before 30 June. We're expecting it in the fourth quarter of 2025. Outside that, most of the questions are actually consistent in this theme.
What I would do is I would encourage everybody to read the presentation, read the announcement, read the 4D. If there are any questions that are not answered within those, we have an investor page which you can click onto. You can filter your questions through that platform, and we'll respond to you accordingly. On the back of that, I really thank you for your attendance today. We've got an exciting period with huge growth ahead. We've delivered excellent results. We're really looking forward to continue to build a great business and a thriving business that delivers shareholder value, but also winning market share and becoming Australia's market leader. Thank you.