I would now like to hand the conference over to Mr. David Macgeorge, Managing Director. Please go ahead.
Thanks, Melanie, and we'd like to welcome everyone to the call today for our first half FY 2024 results. Look, before I kick off, I really just would like to acknowledge our people. There will be many of them on this call, and I really wanna thank them for all their work and efforts. You know, they... You know, you all continue to step up, and you really live and breathe what we stand for as a business and our culture of living, living for the challenge, being smarter together, never giving up and having each other's backs. And, you know, these results are really a testament to all the hard work and dedication that you continue to deliver. We move to slide two. I really just wanna start, you know, with a bit about us, particularly for those that are newer to the story.
You know, who are we? We're a diversified industrial services company. I think the key word there is diversity. You know, diversity in what we do, sectors we play in, geographies on which we play in, diverse set of customers. That really is one of our key strengths. And what we do, we bring an engineering mindset to deliver critical services to major industries. So when I break that down, you know, what do I mean by engineering mindset? It's about being smart, technical, innovative specialists, and deliver what are critical services to our clients. It's not around doing the laundry, the catering, or watering the haul roads. It's about delivering critical services for our clients, which makes us very sticky and makes us a critical partner to them.
And we have the ability to do that across the entire asset life cycle of engineer, construct, and sustain, which gives us a very broad platform on which to play. And what we wanna be, our vision, is the most sought after in what we do. As some might say, number one, market leader. You know, for us, when our clients have a challenge, a problem, an opportunity, the first people I want them to think of when they pick up the phone is SRG Global in making the complex simple for them. We move to slide three in the profile of the company, and we are a very, very different business today. You know, we now have more than 3,500 people, which, you know, it continues to increase across more than 20 industries on more than 100 sites in five countries.
You can see now, looking at sort of pro forma revenues of, you know, circa AUD 1 billion, a market cap of roughly AUD 375 million. So a very, very different business to where we've been historically. Now, we report on three operating segments: asset maintenance, mining services, engineering and construction. I'll touch on each of those. And you can see from an ownership structure perspective, you know, management and board, they have circa 11% of the company. That run is quite deep within the business, which I think is really important for shareholders to understand that, you know, very much aligned to shareholders in terms of, you know, the ownership of the business.
As we move to slide four, which is really a summary of our first half, and really what I think you're seeing here is further evidence of us continuing to deliver. You know, it's a record financial result. EBITDA up 33% to AUD 45.1 million. EBIT up 36% to AUD 28.4 million, you know, which is an absolutely excellent result for the company. Probably most pleasing for me is just we're continuing to improve the robust financial platform that we have. You know, excellent cash conversion, EBITDA to cash conversion of 133%.
You'll sort of recall in the second half of last year, you know, we won a lot of work in the last three or four months, and I always said that that would flow through in the first half of this year, and I think you, you've very much seen the clear evidence of that. We're now back to a net cash position, you know, net cash of AUD 6.4 million from net debt of AUD 17 million, and that's really... We want to be a net cash business, and I'm really pleased to be back in a net cash position after sort of taking on some debt for the Asset Care acquisition. So look, really pleased from a cash perspective. You know, it continues a very long track record of cash generation in the business.
You know, it's very cultural with our business, and, and you can clearly see the evidence of that. One of the great things that we do as a company is we really balance that growth and yield aspect of our stock. And so we've got an interim fully franked dividend of AUD 0.02 per share. I think we've done a great job over a long period of time, really funding the growth of the business, but also providing good dividends to shareholders on the way through, and you're seeing further evidence of that today. Also pleasingly, you, you're seeing continued evidence of us winning and executing. You know, we have work in hand of nearly AUD 2 billion, which is up 27% on this time last year, and an opportunity pipeline of AUD 6.5 billion, which gives us a terrific platform for the future.
You know, I've been asked a lot of questions over the last few years in terms of as we've grown the business and won a lot of work, you know, are we just - are we buying work? You know, what you're really seeing here is clear evidence of us winning really good work with quality clients, but also executing really well, and the margin performance is a clear testament to that. You know, we're not stopping here. You know, we're upgrading our FY 2024 EBITDA guidance to AUD 95 million-AUD 100 million, which really shows the confidence that we have in the future of the business. Look, our focus is on continuing to execute our long-term strategy. We've always prided ourselves that we run this business for the long term.
We'll keep executing that strategy and, you know, we see a really strong growth profile for the business over the next three to five years. So I think as a summary, you know, an excellent first half from the business. As we break that down a little bit further, as we move to slide five from a financial performance perspective, and I think no matter what metric you look at on this page, it's an excellent set of results. It's an absolute above market performance. We keep converting the pipeline with blue chip clients. We've transitioned to net cash, which I think is a real highlight for the business. And most importantly, you know, the business funAsset Careentals really provide that platform for ongoing sustainable growth.
But look, I really think the key story, the key messages here, it's, it's not about the numbers, it's about the quality of the numbers and the quality of the business. You know, it's the improvement in the quality of this business in the last five years is massive. You know, it's been an enormous transformation, it's really off the back of us executing strategy. And I always like to link numbers back to strategy. And as we move to slide six, you can see here that we've had a very, very clear strategy for a long period of time, and you're seeing further evidence today of us executing against that strategy. And we're doing everything that we said we would, and in some ways, in my mind, we continue to be ahead of schedule in that regard.
Almost feel bored, boring at times in some ways that, you know, I'm, I'm reeling off the same strategy, but I think that's the real strength for us. We've been very focused, we've been very disciplined, we haven't deviated, and we've really gone about delivering what we said we would deliver. Very much in the growth phase of that strategy, you know, step change growth in recurring asset maintenance services, you're seeing clear evidence of that. Innovation and selective growth in mining services, you're seeing clear evidence of that. Targeted growth in civil infrastructure, construction and remediation, you're seeing clear evidence of that. Specialist services and products in building with key repeat clients, you're seeing clear evidence of that.
I think the keystone of the growth phase of the strategy was really transforming the business from very much a project-based win and do business, to a high level of annuity recurring earnings. You're now seeing sort of circa two-thirds of our earnings, sort of annuity recurring in nature, and one-third project base. You know why that's important? It gives us a very stable, predictable platform that which we rely on going into each year, and then be very targeted on the engineering construction side of the business. You know, we never feel the need to keep feeding the beast, and we can be very disciplined, focused, and targeted on how we'll grow the business moving forward.
The growth phase will ultimately morph into the leadership phase over time, and I'll touch on the leadership phase of the strategy a bit more in the outlook section of the presentation. And really, this execution of strategy, as we move to slide seven, is really delivering a key long-term track record of delivery. Now, it's evident, and this is not about one half good set of results, it's not one year's good set of results. You're seeing our long-term track record of delivering and doing everything that we said we would do. You know, it's been a huge transformation. Clear evidence of executing the strategy, really transition the business to that annuity recurring earnings, track record of winning and executing, track record of cash generation, funding growth and dividends.
We're upgrading guidance, and I think if you absorb the numbers on slide seven, you can really see the transformation that this business has been through, and every single metric on that page has undergone a significant transformation in the last four years. Again, it's all about evidence. It's all around the quality of the business that we have today. And what that's delivering, as we move to slide eight, is this strategic transformation is delivering sustainable growth for the future moving forward. We've got very much now a diversified industrial services business with that high level of annuity recurring earnings, which gives us sort of that predictable, stable nature on which to grow. You know, we play across a broad range of sectors and geographies, and I would say that say that gives us a natural hedge, that we're not reliant on any one sector, one client, one geography.
We have a very broad platform on which to apply our skills. But it's also about the quality of the earnings that we have today. You know, we have a very robust commercial framework with blue chip clients, you know, and all the work that we're winning is primarily with clients that we already have, and it's adding additional services to them. And it's a terrific platform for the future. You know, we're not stopping here, you can see we're increasing guidance again as we move into the back end of FY 2024. As we move to slide nine, it is underpinned by a really strong foundation. Now, it's not about the best widget or the smartest strategy that drives performance, it's culture.
And that's what I'm talking about here, in terms of what we stand for as a business, and live for the challenge, smart together, never give up, and have each other's backs. You know, these are not words that sit on a frame on a wall, you know, these are words that we live and breathe every day, and that's what's driving this performance. It's our people and our culture. I used to get at times sort of worried that, you know, as a public company, everyone gets to see your strategy and know what you're doing, but it's not about knowing the strategy, it's just having the right culture and the discipline of actually doing and executing, and you're really seeing the evidence today and the foundation that we have.
Now, I guess, some live examples of that foundation as we look at, you know, the environmental, social, and governance in action as we move to slide 10. You know, for SRG, it's really about keeping it real and making a difference. Now, we've got some examples there. You know, from an environmental perspective, you know, we've implemented Sustain.Life software platform to track emissions. And I think most importantly, what that allows us to really audit our performance on a consistent basis as we move forward and improve. There are a number of sustainability initiatives such as green concrete, local tree planting initiatives for every cubic meter of concrete, and solar-powered site facilities, and also working with our clients and their sites around smarter designs that really drive the environmental sustainability elements of their business.
From a social perspective, our Bugarrba Aboriginal Joint Venture is really well established now, and I'll touch on that a little bit more later on in the presentation. We're on our third reconciliation action plan, and we have a number of social partnerships with causes that are aligned to us, such as Clontarf, Mates, Shooting Stars, and Telethon. What we have is a really good governance and risk management framework on which to sort of manage and govern the business. You know, particularly pleased with some of the work we're doing in the psychosocial space and really equipping our frontline leaders on what is a, you know, not only an enormous issue in business and industry, but also in life.
And we've really worked hard on developing our own in-house program around psychosocial behaviors and management to really help improve and drive the business. We never really like to celebrate safety. I always call it the glass ball in business that you can't afford to drop. You know, we continue to make significant improvement both on lead and lag indicators, you know, TRIFR sort of circa 3%, which is a big step forward for us as a business. But, you know, every day is a new day, and we won't be satisfied until that's zero. So I think overarching, terrific set of results, really good execution of strategy, really strong set of numbers, but a really strong framework on which to take the business moving forward.
So I'm now gonna switch gears, and we'll go into some of the more financial aspects, and I'll pass on to our CFO, Roger Lee, to walk us through those. Thanks, Roger.
Thanks, David. Go to slide 12. As you can see here, with the segmental breakup of our performance, the key takeaways here is on the left-hand side, you can see we're up on all metrics of revenue, EBITDA and EBIT. And to David's point, as what he said before, you know, you can see our earnings now significantly weighted towards our first two segments of asset maintenance and mining services. And from a margin perspective, you know, continued margin profile of circa 11% EBITDA margins in asset maintenance. In mining services, circa 20% EBITDA performance, which is very consistent with our historical run rates, and engineering constructions margins of 7.2%, which is again, in line with historical results.
And our corporate number of circa 2.2%, again, in line with historicals, and we feel pretty much, you know, a very modest spend for our corporate profile. So a very strong set of results and very much evidence of our weighting more towards an annuity with carrying earnings profile. Onto slide 13, cash generation. Key takeaway here is, I guess, a 133% cash conversion rate, and that's, you know, with a strong operating cash result of AUD 59.7 million against our EBITDA of AUD 45.1 million. In the half that we invested significantly in CapEx of AUD 39 million, and we paid dividends and continued to grow the business and invest in working capital.
I think, as David pointed out earlier, a very, very pleasing result, and again, evidence of the cash generating power of the business that we have today. Slide 14. Again, a very robust financial position, and we continue to build on this position. Available liquidity of AUD 184 million, cash in hand, undrawn working cap facilities and equipment finance facilities. So plenty of opportunity for us to grow and plenty of support from our supporters, banking wise. Net cash of AUD 6.4 million from a net debt position of AUD 17 million. Again, a very pleasing result and, you know, a lot of undrawn facility there from a bonding and bank guarantee perspective. So I guess the key takeaway from this slide is a strong platform for us to grow from a financial perspective.
Thanks, Roger. Certainly a lot of hard work there from the team.
Yeah.
To move now to the operating segments, and just move to slide 16, which is our geographic footprint. I think what you can see here is just the terrific platform and footprint that we really have to grow the business into the future. And it's not only that, it's just the breadth of services we provide and the depth of services at each of the locations that we are today. Now, we have very much a cross-selling culture in our business, and that really is, I guess, the opportunity for us moving forward. You know, from a numbers perspective, about 55% of our work is West Coast based, about 35% East Coast, and about 10% offshore, with which the lion's share of that is in New Zealand.
But it's a, it's an enormous footprint for us, you know, and we think we're just getting started on how we can really leverage that footprint, and add different diverse services to each of those locations. As we break down the three operating segments, firstly, starting with asset maintenance, which is our multidisciplinary specialist maintenance business, our access solutions business, and our asset monitoring, inspection, and testing business. Now, there's a couple of key takeaways from slide 17. It's really just the quality of the clients that we have and the diversity of the sectors on, on which we play. You know, as I said earlier, we have a very broad platform on which to play across a broad range of sectors, and just the quality of the clients that we have are absolute blue chip.
We move to slide 18, which is the first half in review, and it's been a terrific first half in asset maintenance. You know, a number of long-term contracts secured in a diverse range of sectors. It really embedded that geographic expansion and now truly an Australia and New Zealand asset maintenance business across all geographic sectors. You know, the integration of Asset Care has gone exceptionally well. You know, the whole thesis of buying Asset Care, which is the monitoring, testing, and inspection business, was really to give us that front-end monitoring, inspection, testing capability to then have the ability, the back-end maintenance ability to execute the work and provide that complete offering to market. We're basically at the 12-month anniversary of that absolutely on business case, and I've been delighted at the cultural integration.
You know, Greg, Greg Fletcher and the team have really sort of joined the business well. You know, there's a lot of sort of cross-collaboration and cross-selling initiatives underway. You know, we're, we're delighted what this business brings to us, you know, from an innovation and technology perspective, and we see a really bright future on how we can grow that business, but also how it strengthens other elements of our business. And really continues a really good track record of us acquiring well and integrating those acquisitions well. As I mentioned, our Bugarrba Aboriginal Joint Venture is well established with contracts now with FMG and BHP. And look, I think there's a couple of key takeaways from the asset maintenance business as a whole.
It's really just the tenure that we have with a lot of blue chip clients, and just the level of capability, innovation that we provide, and that complete end-to-end offering, where we basically self-perform everything that we do. It's quite unique. We move to slide 19, which is our mining services business. Our core service is our production drill and blast business and our geotechnical services business. Again, the key takeaway from mining services, it's the quality of the clients, and it's the quality of the commodities, and it's all production-based, and we play almost exclusively in gold and iron ore, everything's production base are really quite insulated from commodity price movements, which are largely irrelevant to our business, and just the quality of clients we have are very much at the lower end of the cost curve.
Again, as we move to slide 20, you know, terrific first half from our mining services business, which continues a really long track record of delivery over a long period of time. You know, we won multiple contracts in the first half. You know, a particular highlight was Genesis Mining, which is a new client for us. You know, well-known people within that business, the SRG Global family. But, you know, we really see a, a very, very bright partnership with them moving forward. You know, we continue to develop and enhance our Orbix Data Intelligence software. This is an in-house software that we've developed. It's all around good data, analytics, and driving good decision making and performance. You know, this software is integrated with our clients.
It provides very much predictive intelligence, and it really drives that sort of data and insight and makes us very integrated with our clients. You know, we expect the mining services business to continue to grow. We have a good pipeline of opportunities, but look, we're not trying to be all things to all people. It's very much around quality of client, quality of commodity, and to be honest, you know, in the near future, it's really about growing primarily with existing clients as they expand their operations. The final operating segment is engineering construction, you know, which is our civil and infrastructure business in the sort of Asset Care, bridges, tanks, wind farms, and mine site infrastructure space. You know, our specialist building business, which is our curtain wall facade construction business and engineered products business.
Again, you know, probably some of the key takeaways, you can see the quality of the clients. It's very much government clients in the transport, water, and defense space, and long-term key partners. I think that's the key here, is we're very focused, we're very targeted, and really just following and growing with our, with our key clients. If we look at the first half on slide 22, you know, it's been a terrific first half from engineering construction, and I'm quite bullish on where this business and segment will go over the next three to five years. We've won our first major R5/ B4 project at Jervis Bay, which is a key milestone for us. We, you know, we now have the highest national road and bridge accreditation.
You know, this was a very, very important project for us, and I think the key message here is, with the highest national road and bridge accreditation, it gives us the ability to do things in our own right, where we would ordinarily have to joint venture 50/50. This allows us to get the whole of the pie with the skill set that we have within the group, and that was a very, very key, a very key milestone for all... for our business. The specialist facades business, you know, we are an absolute market leader, across Australia and New Zealand, with really key offerings and really just following three or four key clients, and to be honest, almost agnostic as to the type of structure, whether it's in health, education, hospitality, commercial, you know, residential, we largely don't care.
It's really following our key clients as they develop their pipeline. We're already working on things as far out as FY 2028 on that early contractor engagement. You know, really, really strong business. You know, we've expanded across the ditch to New Zealand, which really enhances our footprint over there, and it's having a really, really strong period. We continue to expand our engineered products business. You know, this is one that, you know, ultimately see being the fourth operating segment of the group. That might take five to seven years. These are infrastructure products, and you know, why I like engineered products, it's the same clients, it's the same sectors, it's the same geographies. You make it, you sell it, you get paid. You know, very low risk profile, and it's a market that we know well.
You know, these are specified products by engineers, and we have engineers selling to engineers. And we certainly believe over the long term, we can really make a real success of this business. You know, it is a long time horizon. We look five to seven years, but that's the way that we think about around that business, and we'll be very measured, and focused, and disciplined on how we continue to invest and grow that element of the business. And underpinning any engineering construction, it's just a really robust commercial framework. You know, nearly all the work we do is under early contractor engagement, and the key here is just really well-established relationships, you know, where we're valued, we are the most sought after, and we're very targeted. And the things that we do, we're absolute world-class in.
We sort of switch gears again in terms of the outlook moving forward, and I'll move over a couple of slides to slide 24, and it's really around continuing to execute what has been a very clear strategy for a long period of time. You know, we're very much morphing the growth phase into the leadership phase over the next little period. Now, what will that look like? You know, certainly a zero harm, an ESG industry leader, and recognized employer of choice where people wanna work for SRG Global. Products will ultimately become the fourth operating segment of the group. You know, there will continue to be selective strategic acquisitions that complement either our capability or our footprint, and you've seen a very, very clear track record of us on the M&A front, buying well and integrating exceptionally well.
Consistent above-market returns for shareholders, and you've seen very clear evidence of that over the last four years. Ultimately, the profile of the business will move more towards about 80% annually recurring and 20% project-based. Now, we really do see good organic growth across all three operating segments, but probably anything in the sort of more the inorganic M&A space will be more in that sort of recurring revenue style businesses. We have a really strong platform to continue to grow. As we move to slide 25, you know, work in hand of nearly AUD 2 billion, that's just the quality of the work. We have the consistency and the sustainability of that work.
You know, we have a very large pipeline, and, you know, for us, it's been very targeted on what, who we'll work with, commercial framework, you know, so we're not lacking for opportunity. We are very targeted and, you know, for us, I think the biggest opportunity is just leveraging the footprint we have and continuing to cross-sell different aspects of our business to clients that we know, know well, and have a well-established commercial relationship. And that's really driving positive momentum and a positive outlook as we move to slide 26. Now, we're at, from an operating segment perspective, asset maintenance, you know, it's all about continuing to deliver step change growth in diverse sectors with blue chip clients. Now, mining service is all about operating in high demand, high quality growth commodities, and you've seen really clear evidence of that today.
Engineering construction, you know, really positively linked to, you know, what is significant infrastructure investment across a number of sectors moving into the future. Engineered products is gaining momentum both domestically and internationally, and Asset Care is really that transformative acquisition that adds that sort of front-end asset monitoring, inspection, and testing, testing services. And that's driving positive momentum for the group as a whole. Now, we've upgraded guidance to AUD 95 million-AUD 100 million. The strength and diversity of the business really gives us that protection against labor and cost pressures, and you've really seen that in the margin performance. Now, as Roger's talked, a really robust balance sheet, back in a net cash position with the ability to fund the future growth of the business. An earnings profile of circa two thirds annuity in 2024 and beyond.
The strategic transformation to diversified industrial services business will continue to deliver results as it has done. I think ultimately for us, as a company, we have multiple, multiple organic levers to grow the business into the future, which is really the investment proposition of SRG Global as we move to slide 27. We have end-to-end asset life cycle capability, where we basically self-perform everything that we do. We play across diverse market sectors and geographies. It's that hedge that I talk about in terms of not being weighed to any sector, geography, client, but having a very broad set of services and platform on which to apply our skills. We have a highly scalable business model with management on board, with the experience, the robust systems, and structure to continue to scale and be a bigger business than we are today.
A high level of annuity earnings profile, which makes us very predictable and lowers the risk profile of the business. A very capital light investment profile with sort of maintenance CapEx, circa 2%, of revenue, but also being a really good high yield dividend stock, and something I think we've done particularly well over a long period of time, and really balancing that growth and dividend elements of the, of the business. It's, it's, from my perspective, you know, the business has never been in a stronger position than my now nearly 10 years within the business, and I'd really like to acknowledge all our shareholders for their ongoing support. We have a very exciting future in front of us. So I really wanna, again, shout out and acknowledge that-
Ladies and gentlemen, this is the conference operator. We have temporarily lost connection with the speaker line. Please hold and the conference will resume shortly.
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Please go ahead.
Any more questions that we?
Still have any questions?
Does the question...? Any more questions?
No, they're still on. Can we see?
Yeah.
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We're back online now, I believe.
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On the back up.
Yep.
Okay. Sorry about that. I'm not sure what happened [audio distortion] . Yes.
I think we're back online, Roger, so you might wanna-
Yeah.
Continue with the questions.
All right, so let me just get to that section again. Question here on the revenue perspective and growth rates. You know, how do we see each operating division growing for the remainder of FY 2024, and then I guess beyond into FY 2025?
Look, I think I never get too hung up on revenue, I must say. It's all around profitable, profitable growth. You know, we would expect all our three operating segments to continue to grow, and the revenue profile would, I think, just highlight that accordingly.
I like that as well. Yep. Yep. Question around here on the very good operating performance, expenses, finance expenses has increased. Can you provide some comment around that? So this was around clearly when we bought Asset Care. We actually took on interim facility for Asset Care, so there's a repayment schedule and there's obviously finance expenses attached to that. So that's a five-year term, and we'll expect that to continue to be paid down in accordance to the plan. So that, that's kind of the reason why interest expenses have gone up, as well as, you know, we've continued to invest in motor vehicles purchases as well, and that's got an interest component attached to that as well, just to fund the growing business that we have.
Question around uses of cash going forward: Do you think that SRG, seeing its last acquisition, do we think we use cash going forward, you know, as opposed to equity funding? What's our view on mix, I guess, on that going forward?
Well, I think ultimately, you know, it would depend on anything we look at it and the size of it. And like any acquisition we've made, we always make an assessment from a cash, you know, debt funding perspective and also an equity funding perspective. So there's no- you can't provide a definitive answer. You know, there's not anything we're looking at imminently, but, you know, clearly we're in a very, very strong cash position and a very, very strong balance sheet, and we would look at all elements of funding and what makes sense-
Yeah.
for us. But, you know, probably one of the key elements for us is, you know, any deal we have done historically and would look to do in the future, you know, we want to, we would want to be accretive.
Yeah. Yeah, agree with that. Question around exposure to recent curtailments, e.g., Glencore. You know, what's the impact of that or to the group?
Yeah, look, I think ultimately for us, you know, one of the key strengths of our business is, you know, very diverse. We're not wedded to any client, not wedded to any sector, not wedded to any geography. You know, look, I'm not gonna comment commercially on any individual client. You know, Glencore is a good customer of ours, and you know, they've made some recent announcements, and I think it, you know, potentially in some ways may present some opportunity-
Yeah
... for SRG, for SRG Global.
Yeah.
So, you know, I think you've clearly seen from our guidance, we've increased guidance. That sort of shows you what we think about FY 2024, and we continue to expect to continue to grow in FY 2025. So I really think that shows the strength and diversity of the business as a whole. And life's not perfect. Business is not perfect. You know, different things will happen, but, you know, just the strength and diversity of our business really provides us a very natural edge, as different things happen, both positively and negatively.
Yeah. Yeah, I agree. Yep. Question here around a geographic profile, I guess. About the U.S. business, and are we still operating there? There's, you know, a slide obviously shows U.S., South Africa, and the U.K. Can you clarify our approach in those markets?
Yeah, so I think, you know, we have the footprint offshore, and South Africa is sort of dam anchoring. Dam anchoring the U.K., it's engineered products. In the U.S., you know, we have a dam joint venture. It's not active at the moment. We still have the joint venture in place with our local partner, and, you know, I, I've always said that's a very much a medium-term play for us. You know, certainly through COVID, we put that on ice. We see the opportunities probably closer to home, and it's more probably keeping a medium-term play and keeping a peg in the ground, and if the right opportunities start presenting themselves-
Yeah
... and that makes sense for us, well, then the opportunity is there. But, you know, we're certainly not active, and not actively pushing in that market, at this point in time.
Okay. Now, a couple of questions on Asset Care, so I'll try to group them together. Asset Care, how's it going? How's the business tracking? Is it tracking the plan, the first half contribution, the full year contribution, and going forward, I guess? Any comments on Asset Care, please?
Yeah. Yeah, very much delivering to, very much delivering to, the business case. You know, really excited about the opportunities as we move into, we move into the future. I think our business case on an annualized basis, you know, first half was about AUD 15.4 million EBITDA, and I, I can't remember down to the last decimal place here, Roger. There's a lot of numbers in, in my head, but I think, you know, certainly the first half was very much in line with,
Yes.
very much in line with business case from a half year-
Correct.
-um, perspective.
Yep. Yeah, a question here, just, you know, sensible approach for the same clients in industries across business segments, so obviously track record of, you know, deep relationships. Are there any new industries that you're looking to expand into?
Look, I think we play across a broad range of industries already, and ultimately for us, you know, defense is an area that we certainly have a footprint in today, which we've sort of started to establish in the last 12-18 months. I think there's plenty of opportunity to grow there, which is probably a newer market for us over the last couple of years. Certainly new energy, you know, we do quite a bit in the renewable space from a maintenance perspective, and we continue to look for opportunities over time.
Yeah.
But we do play across a broad range of sectors already, so I wouldn't kind of sit here and say here's some new industry that, you know, doesn't exist today, that we're not already playing in some capacity with the diverse business that we have.
Yeah. Yeah, terrific. Question around corporate costs. You know, do you expect a similar sort of amount and run rate for the second half? And the answer is yes. To that question, another one around, will we consider the AGM going forward, moving to a hybrid model in person?
I'll take that on notice. I mean, I'll-
Yeah.
We've focused right now is getting through the first half and delivering the year.
Yeah.
You know, we'll certainly have a look at that.
Yeah. Are you looking at any further acquisitions, and in what sector?
Oh, look, I think at any point in time, we're always looking for opportunities to add value to shareholders. Certainly nothing imminent, you know, from an M&A perspective, you know, one of the things that we like, you know, certainly, you know, continuing to enhance asset maintenance, Asset Care, even have the right small things in the engineered products front. We'll certainly look at it, or if there's certain sectors that we play in today that want to sort of increase our presence, you know, we might look at that as well. But, you know, there's nothing imminent, and, you know, like we've done the last 10 years, we'll continue to explore opportunities where they make sense.
You know, most importantly, a key part of our focus is really driving the organic growth in the business moving into the future.
Yep. Yep. Terrific. Question here, Asset Services, can you talk about the level of organic revenue growth in the period? Comment around that. What do the forward opportunities look like, and what's driven it, given the current level of services? And can you provide some examples of Asset Care and Maintenance synergies?
Yeah, I think all three operating segments have continued to. Well, there's probably quite a few questions in one there. I think that you can see really see from an asset maintenance perspective, ex Asset Care, that really the expansion on the East Coast of Australia has continued to gather.
Yeah
... to gather momentum.
Yeah.
That's been really strong for us. You know, from an Asset Care perspective and maintenance working together, there's been a number of examples already, you know, Northern Star, FMG-
Yeah
... You know, the West Gate Bridge, where we've been providing a term contract for both-
Yeah
... maintenance and asset care services. You know, we've started to expand our footprint in New Zealand for asset care as well, which is a new market for asset care. And also probably it's perhaps traditionally been a business more focused on perhaps, you know, mining and oil and gas and energy, but probably some of our infrastructure work, particularly in sort of transport, and it really opens up an opportunity and, you know, West Gate Bridge was a pretty good example of that. But look, we're early days. It's a marathon, not a sprint.
Mm-hmm.
You know, the focus was really on integrating the business well culturally, delivering a really solid set of numbers in the first year, and really getting out and engaging with clients about how we'll grow the business. You know, I certainly think it, you know, we will continue to see that business grow, and also, I think it enhances other aspects of that business, as well.
Yeah, and I think let's emphasize the fact that we are seeing some terrific opportunity in the transport infrastructure sector, aren't we, with the Asset Care capability that we have?
Yeah.
Which is obviously-
Yeah
... pieces for us, buying the business. Another question on margins going forward. I think we kind of covered this already.
I think margins are pretty consistent with starting some, just question, looked like some margins were down. I think it depends what metric you look at. EBITDA was down at 0.2% or 1%-
Yeah
... EBIT was, it was up 0.1% or 0.2%, and, you know, if we're getting to the last 0.2% of 1%-
Yeah
... You know, I think we're, you know, we're delivering really good, strong margin. You know, it's pretty, pretty well above industry, some industry peers in the, in the space.
Yeah.
You know, it's very consistent with where we'd expect to be. We have a stated aim over time to ultimately get to 10%. You know, I'm not sort of giving any guarantees of when that will happen on a consistent basis, but, you know, that's certainly the stated aim of the business. I think, you know, as we leverage our size and continue to add scale to the business, we can really leverage the structures further as well, where we are, you know, it is very much a scalable business model we have.
Yeah.
We have, you know, we invested in the systems and the structure to be a bigger business, and that's something that I think we've done well over a long period of time, where we've really put the structure and the cost base in place prior to delivering the growth.
Yeah.
All that means is that when we're winning, we're executing well. You know, that can be challenging at times, where markets are looking for every six months, some form of improvement. You know, we very much think about this business in the long term, and we'll continue to invest on where we wanna be in the long term for the business.
All right. Terrific. Well, I think that's the end of the Q&A session. So, I will hand the session back to Melanie.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.