Thank you for standing by and welcome to the SRG Global Investor Briefing. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, please type it into the Ask a Question box and click Submit. I would now like to hand the conference over to Mr. David Macgeorge, Managing Director. Please go ahead.
Thanks, Harmony. I'd first like to welcome everyone to the call. I'm conscious it's a very busy time of year for all of us. There's quite a bit of information to get through. Look, before I start, I'd really like to acknowledge our people. You know, it's been a terrific six-month period for SRG Global. They've done an amazing job. They're really living and breathing what we stand for. We live for the challenge, smarter together, never give up and have each other's backs. I'm incredibly proud of all the efforts of our people. I know there'll be many of them on this call today. I thank you and really acknowledge you for all the hard work that you've done over the period. I'm going to break the presentation down into two halves.
I'll first go through the half year results, then we'll move on to the acquisition of ALS Asset Care in the second half of the presentation. I always like to start with a bit about us, if we move to slide two, particularly those that are newer to the story. You know, who are we? You know, we're a diversified industrial services business. Went through quite a significant transformation, which I'll touch on. What we do, we bring an engineering mindset to deliver critical services for major industry across the entire asset lifecycle and engineer, construct and sustain. If I break that down, what do I mean by engineering mindset? It's smart, technical, innovative specialist and critical services are critical services for our clients. You know, it's not doing the laundry or watering the road.
It's something that are critical to our clients, which makes it critical for us. What we wanna be, our vision is the most sought after in what we do. Others might say number one market leader for us. You know, when our clients have a challenge, a problem, an opportunity, I want the first people I want them to think of when they pick up the phone is SRG Global and being that most sought-after company in our fields of expertise. As we move to slide three, you know, this is our profile. It has changed a lot. We are a different business today to the business we were, and I think I touched on that at the full year results period.
You can kind of thread the three see the three operating segments of asset maintenance, mining services and engineering and construction. You know, the ownership structure, 12% with management and board, about 45% institutional. More than 2,500 employees across more than 20 industries, across more than 80 sites in four countries and sort of, you know, it's clearly a very, very different business to what we were and that's about to change again. We move to slide four, which is the summary of the first half. Look, I think what you're really seeing here is this evidence of us continuing to deliver. It's a record result. EBITDA up 26%, EBITA up 31% in the half. Really positive returns for shareholders.
EPS up 31%, increasing our dividend by 33% to AUD 0.02 a share, fully franked. You know, I think that throws off a fully franked yield of more than 5%, and I think that's something we do well, being both a growth stock and a dividend-paying stock. Really strong cash generation with EBITDA to cash conversion of 139%, and I'll touch on the cash further on in the presentation. Net cash was AUD 38.1 million. That's up 86% and a really strong outlook for the future. We've increased guidance to AUD 72 million-AUD 75 million. You know, for those with shorter memories, we delivered AUD 57.2 million in FY 2022, so it is a significant move for a terrific work in hand of AUD 1.5 billion.
A really strong pipeline of opportunities and we're really showing a strong track record of converting and, you know, we're really bullish about our future in terms of the growth profile over the next three to five years. I guess in terms of key highlights, I think it's clearly an above market performance, good conversion. I think most importantly, the business fundamentals are really strong and it's giving us the platform to grow this business in a sustainable way. I guess the news of the Asset Care business this morning is really off the back of a business, a base business that is performing and performing strongly. Again, as I said, it's really evidence of us delivering our strategy and doing everything that we said we would do.
I think from a financial perspective, probably to me the key highlights are really just the quality of the earnings that we now have in the group and just the margin profile. As you can see, our margins have continued to improve from a percentage perspective and I'm really pleased that, you know, we've continued to grow but also grow margin percentage at the same time. It's something I've been asked quite a bit over the last couple of years. You know, are you growing? Are you buying work? Clearly you can see from the margin improvement from a percentage perspective, we're growing good quality work with good quality clients and increasing margin percentage at the same time. I think ultimately this is all about us executing strategy and I really wanna link back to strategy in terms of how we're executing against that.
If we move forward a couple of slides to slide seven, it's all about us building the most sought-after business in what we do. This has been a very clear strategy for a long time and really today is again evidence of us delivering against that and doing everything that we said we would do. Probably in my mind we're a little bit ahead of schedule and where I might have expected to be at this point in time. For any SRG Global people on the call, please forget I just said that. My expectations are high, but I think we're a little bit ahead of schedule in terms of how we're progressing the strategy.
Very much in the growth phase of that strategy and we'll morph into the leadership phase of our strategy as we move into the future and I'll touch on that a little bit more, a few times further on in the presentation. What that's really delivering is a track record of earnings growth. You can see on slide eight, you know, the good positive trend around our earnings growth over the last few years. That's also translating on slide nine to a track record of increased cash and dividends. I think you can kinda see the net debt to net cash movement over the last few years. That's despite making a pretty significant investment in our growth over the period. It's also allowing us to be a good dividend paying stock.
I think we've done a really good job balancing both our growth and dividend. We throw off excellent yield and, as I mentioned earlier on in the presentation, you know, we've increased our dividend again in the first half of this year, which is terrific outcome for our shareholders. Ultimately, as we move to slide 10, you know, it's off the back of having a really strong foundation, you know. As zero harm continues to improve, and I always say a safe business is a good business. I never like to celebrate success in this area. I always call it the glass ball in business that you can never drop. Every other ball is rubber, this one's glass. You know, I'm pleased with that we continue to improve as we grow and grow our number of people.
To be honest, it's something that, you know, it's every day is a new day and it's has to have a relentless focus for our business. Diversity comes in many forms. You know, we're highlighting gender diversity here. You know, quite an even split at a corporate level. Look, operationally, it's a much more male-dominated workforce. You know, we are looking for new and innovative ways to bring in more female talent into the business in the engineering blue collar side of the group. Doing a lot of really good things with our community. We've now created a new position of a community liaison officer, which, you know, we've brought in Vicky Stanley, who's one of our internal people that's been in the business now for a long period of time.
It's a great promotion for Vicky, and we really wanna step up our efforts in this area. A lot of good things in the local communities. Particularly proud of, you know, Bugarrba Aboriginal joint venture. You know, it's done well. Vicky's had a key role in that, and it's one that I'm really looking forward to stepping up further in this area. Corporate governance is absolutely key. You know, it's something that, you know, we take very, very seriously, and we've got the right processes and policies and systems in place. Ultimately, it's what we stand for is what's driving our result. It's not the best widget, it's not the smartest strategy. It's the culture and people, and really living and breathing what we stand for. Live for the challenge, smarter together, never give up and have each other's backs.
That's what's driving this performance. I again thank our people for really embracing the culture that we have. It's something we're very proud of and something that we continue to work on. Just gonna switch gears a little bit now into some of the more detailed financials in the first half. What I'll really focus on slide 5 is just really the margin performance. You know, overall EBITDA margin percentage of 9%, very much in line with historical performance. If we look at the three operating segments, asset maintenance, you know, really strong performance. EBITDA margin of 11.6%, you know, very much hovers between 11% and 12% and that's very much in line with historical, which I think is a really good performance for that business. Now, mining services, again, a really strong margin business.
EBITDA margins of, I think over 20%. You know, really good execution in the first half, and I'll touch on that a bit more in the presentation. On the engineering construction side of the business, which is more the project-based work, we're quite targeted. You know, margins of 7.4%, you know, generally hovers between seven-eight. Like in reality, our projects run higher. That, you know, we are quite targeted and they're more than comfortable carrying that engineering DNA between jobs within the business. You know, we self-perform pretty much everything that we do and having that engineering capability and DNA in the group is very, very important to us.
From a corporate perspective, sort of 2.2% of revenue, you know, I've always said that we think there's more scope to leverage that, even though it is a very tight percentage. You know, clearly today with the acquisition of ALS, you know, we can leverage that corporate structure even further. I think that's for us. You know, we are a very scalable business and have an executive management board systems and experience to be a bigger business than we are today, and we're very much structured to be that company. On the sort of cash side of things, you know, it is quite detailed. As you can see, you know, really strong operating cash generation. It's been a huge focus of ours.
It's, you know, I think as I've said in the past, it's probably been one of the few benefits of COVID. It really gave us the ability to really drive home the importance of not just profit, but cash at the front line. That might, you know, just sound like common sense to people on this call, but, you know, probably the front line, you know, can be very profit focused. We've really driven, you know, that deep understanding of cash and the importance of cash within the business, and that is now very cultural, and you're really seeing the evidence of that. You know, everything I think from a growth and CapEx perspective, about AUD 14.3 million in the first half. You know, we are...
You know, we generally hover around AUD 15 million from a maintenance CapEx perspective, annually within the group. Clearly we've been making some growth investments as well. Then, you know, probably other key thing to note is sort of dividend payments there of, in the first half. Look, really pleased with cash and, you know, probably cash a little bit similar. The safety of your cash generation there is generally it's a good performing business. We're in a really robust financial position. You know, I guess we've got plenty of capacity to grow the business into the future and have done a really good job in our business, growing our business organically and funding it, within our, within our business.
Clearly today is a different story with the acquisition of ALS Asset Care. You know, we like to keep a pretty conservative balance sheet and be very disciplined in the way that we manage the business in that regard. I want to switch gears again as we move through to slide 16 and sort of talk more about the three operating segments. Firstly on slide 16, our asset maintenance business, you can kind of see the core services that we do. I think if there's one key takeaway from this slide, it's just the quality and diversity of the client base that we have. You know, 70% of these clients didn't exist three-four years ago, and it's been a terrific effort and very much part of the strategy on how we grow this arm of the business.
I think you're really seeing clear evidence of that. As we move to slide 17, which is the half year review for asset maintenance, looking at a really strong first half. I think if there's some key takeaways here, it's just the tenure and diversity of the long-term contracts that we're winning. It's giving us a terrific platform on which to grow and cross-sell the business further. It's just that diversity, both from industries, services and also, you know, now sort of some of that geographic expansion is really building momentum. You know, it's been an excellent performance by that operating segment, not only in the first half, but over the last two to three years. If we move through to slide 18, which is our mining services segment, which is all production-based drill and blast and geotechnical services.
Look, I think it's the key takeaways here, just the quality of the clients, the quality of the commodities, and it's all production related work. You know, again, as we move to slide 19, a really positive first half. You know, that team is, you know, from an execution perspective is terrific and really disciplined in how they execute their work. You know, we like to run our equipment with high asset utilizations in excess of 90%. We're not a company that will go and speculatively buy kit and put it on the fence and go and win work. It's very much for us, really growing with existing clients.
You can kind of see evidence in the first half of some of the growth we've had with Northern Star, both within existing contracts with them and new contracts that we've added to the portfolio. Our key commodity exposure's gold and iron ore. You know, doing a lot of smart stuff around the innovation front, particularly that Orbix data intelligence software. It's, you know, really predictive intelligence software. It allows for good decision making. We'll continue to develop that software in-house within the group. Again, I think it's all around, you know, discipline capital investment as we keep growing this side of the business. If we move to engineering and construction, which is the third operating segment of the group, sort of civil and engineering, specialist building and our growing engineered products business.
You know, again, I think the key takeaways here, it's very much government clients in that transport, water and defense space. You know, really long, long-term partners in the building space, Multiplex, Lendlease and Built. I think for me, just a really world-class capability in the specialist disciplines that we play in. You know, we are very targeted specialists and niche in this space. Again, as we look at the first half in review on slide 21, you know, firstly our civil and engineering business. You know, really strong operational delivery perspective within the group. You know, a good pipeline of infrastructure opportunities. You know, the acquisition of WBHO, which is now our infrastructure business, you know, has had a really strong performance.
You know, I've been delighted when we hit the twelve-month mark of that business and really delivering to expectation. Our remedial engineering business is really starting to increase and grow, particularly in the water and transport space. You know, we did a small acquisition of an engineered products business called Bartek in December. I'll sort of touch on our ambitions with products into the future a little bit further on. On the building side of our business, you know, our facades business, you know, an absolute market leader. You know, landmark projects all across Australia. We've now entered the New Zealand market as well. It's one that, you know, it is performing exceptionally well with really strong work in hand and a terrific pipeline of opportunities. We're almost agnostic as to the sector or the type of structure.
It's really just more following key clients that we have. On the Structures West side of the business, again, a really positive first half. Good pipeline of opportunities with key repeat clients. It has been the vehicle that we've used to enter into the defense defense space and that business is performing strongly. Now we are in the process of concluding our exit of building post-tensioning both in Australia and the Middle East. That's very much progressing to plan, and we'll conclude by the end of this financial year. I think overarching for the three operating segments, you know, a really positive performance within each area of the business. I'll sort of look back again to strategy and where we're going as a business, and if we move to slide 23.
You know, we've had a very clear strategy for a long time. You know, we are very much gonna morph from the growth phase into the leadership phase of our strategy. You know, I will touch on the ALS acquisition in a moment. You know, probably a couple of key things I'd like to highlight is, you know, clearly in the leadership horizon, you know, products is an area that we wanna continue to grow. You know, I really like this space. We've got a growing business in the engineered structural products space. These are all specified products. You know, the sales force are engineers. And it's one that I'm quite bullish on in the sense of, you know, products, you make it, you sell it, you get paid.
I really like the risk profile of it and the fact that we can do it with our engineering DNA, with sectors, clients and geographies that we know. It's really just another avenue in to spaces that we know. Look, I think ultimately over time, you know, I would like this to become the fourth operating segment of the group in time. That's probably a five to seven-year lens. And we'll just sort of, you know, continue to grow that in a very measured and disciplined way as we move into the future. Probably other point to note, and I'll touch on strategy in the second presentation, but, you know, selective acquisitions to complement either our capability or footprint. You know, I've talked about that before, and I'll touch about it more in a moment.
Clearly, you know, what we've done today is really evidence of us, delivering on what we said we were going to do. We've got a really strong platform, as you can see on slide 2024. Terrific work in hand. Really the focus is on, you know, in the next couple of years, is really leveraging existing contracts and the platform to really cross-sell different parts of our business. We very much have a cross-sell culture within the group, and we've got a terrific platform on which to really grow, the business into the future, both with our work in hand, but the opportunity pipeline that we have in front of us. Which leads to a very positive outlook.
You can see from an operating segment perspective, asset maintenance really in that step change growth in diverse sectors with blue-chip clients and mining services operating high demand, high quality growth commodities, engineering, construction, positively linked to significant infrastructure investment and engineered products is really starting to gain some momentum, both domestically and now internationally as well. That's driving positive momentum in the group. Clearly, we've increased guidance today, which is a terrific sign of where the business is going. We are generally sort of 45, 55 split first half, second half. Really important to note that guidance is guidance on the base business. It is independent of any contribution from the ALS Asset Care business.
Strength of diversity is really giving us protection against, you know, any labor or cost challenges that are happening in the broader macro environment. We've got a good balance sheet to fund our growth. The earnings profile of 2/3 annuity is continuing, and it will step up even further. I'll touch on that in a moment. I think ultimately the strategic transformation to a diversified industrial services company is really delivering results and will continue to deliver results. I think as you move to slide 26, and that is the investment proposition of SRG Global, and I think that's why everyone's on this call, and they look at us. We do have, you know, very deep end-to-end asset lifecycle capability. We play in diverse market sectors and geographies.
I always say that gives us both a natural hedge as different entries cycle, but also a very broad platform on which to play. A high level of annuity earnings profile, which brings predictability, we've added to that today. A highly scalable business model, I think you're seeing further evidence of that today. A capital light investment profile and a high dividend yield stock. I think that, you know, balancing that growth and dividend is something we've done well to date and we will continue to do. Look, you know, from my perspective, the business is in a very strong position. There's real momentum, and we're well on the way to being the company that I know we can be. I guess that's the first half of the presentation.
You know, really strong first half and ultimately, you know, both today it's getting back and delivering on expectations for the, for the full year. I think again, you can see, clearly see that the base business is in a very, very strong position and it's about continuing that discipline of execution and growth as we, as we move into the future. I might now move, and I'm gonna take five seconds if you don't mind, have a quick sip of water because there's quite a bit to get through, as you could imagine. We'll now move on to the acquisition of ALS Asset Care and the equity raising. Look, I think before I start, I just wanna give people some background on the transaction. This is a business that we've tracked for five years.
It's one that I think for those that are invested in us and know us, you know, we've had a very clear strategy in terms of inorganic acquisitions and what we like. And probably, you know, for us, I've always talked about like that front end element of asset maintenance where you're inspecting, monitoring, certifying, testing the assets, and then the back end's about executing the work. Now, clearly, we have very deep capability on the back end of asset maintenance execution, and I'll touch on that. That whole front-end piece, it's a piece I like. The market's very much more now to wanting to deal with less players to do more. That front-end piece, you know, takes you even further up the curve from a smart technical engineering style focus.
It really gets you in at the front end and embeds you with the client. That's, you know, that profile of business is what we've been looking for. Certainly ALS is a business that we've tracked five years. I don't think it's any secret that it's, you know, it's been a non-core asset of ALS Limited for some time, and it's one that there's been some, you know, a couple of processes that haven't concluded for various reasons. In reality, we've, you know, we haven't been in a position or a size to participate in those opportunities. You know, I'm really pleased that, you know, we've got ourselves into a position to participate and actually transact on this business because it fits right in the profile of what we were looking for.
It's the absolute market leader, really complements what we do today and how we take our growth into the future. Probably if I just start here with on slide two, which is the acquisition overview, which is really the nuts and bolts of the acquisition. I'm not going to go through this line by line as I will touch on it throughout the presentation. Clearly today we're acquiring the ALS Asset Care business for AUD 80 million on a cash-free, debt-free basis with a normal level of working capital. You know, it's coming out of ALS Limited, you know, AUD 6 billion global market cap business. You know, it implies an acquisition multiple of just over 5 x EBITDA before any revenue or cost synergies.
I'll touch on that further on in the presentation. We will fund it through a combination of new equity debt and existing cash reserves. In terms of the overview of ALS Asset Care, I will touch on that probably more in the presentation. An absolute market leader in asset integrity and reliability services. We have more than 65 years of history throughout Australia. A really comprehensive service offering of that front-end asset monitoring, inspection, testing and certifying space. A national presence with a geographical split of 70% East Coast based, 30% West. Long-term blue-chip client base across sectors that we know, mining, oil and gas, energy, infrastructure and utilities, and really stable and predictive earnings, which I'll touch on more.
It's all maintenance-based work and sort of a, I guess, a profile of, you know, circa AUD 135 million of revenue and just over AUD 15 million EBITDA. Most importantly, as I said earlier on in the presentation today, you know, people are the key to any business. Look, a really experienced leadership team, all with more than 10 years tenure at ALS Asset Care and deep industry experience. From a funding perspective, you know, as I mentioned, it'll be a combination of equity, debt, and cash, and we've got a fully underwritten institutional placement of AUD 46.4 million and an SPP of up to AUD 5 million. We have created a new debt facility with a NAB of AUD 30 million, and we'll also be using existing cash.
You know, it's EPS accretive and really what it also allows us to do is maintain a conservative balance sheet, which, you know, we're very keen to do. This business is continuing to grow and we wanna keep funding that growth into the future. If I move to slide three, which is, I guess, the strategic rationale. This is probably some of the more granular detail of the strategic rationale. I mean, they are the absolute market leader in asset integrity and reliability in Australia. The market leader with, you know, over 65 years of experience. You know, a lot of deep customer relationships that span for long, long periods of time. I've already sort of touched on some of the key sectors that they play in.
The market leader, you know, we would call it the most sought after, that is ALS Asset Care in the Australian market. Highly complementary service offering, and I think that's really key to understand here is that services that Asset Care provide are completely complementary to what we do. Very much talk and speak our language in terms of very much a technical engineering based service, but more of that front-end asset maintenance element. You know, probably the only slight crossover is, you know, in that dam monitoring space is an area that we do know well today. What that gives us is just really a great platform both ways to really leverage the complete platform and cross-sell what we do.
You know, I think that's really the key theme out of this and the opportunities is the cross-selling opportunity, both, ALS Asset Care into the SRG platform and vice versa is significant. We have a cross-selling culture within the group and this will really drive success moving forward. Highly experienced management team and a highly skilled workforce. I've touched on the management team. It does come with 600 employees, you know, skilled technicians. You know, that's an absolute asset in the current environment. You know, what for me, I'm most looking forward to is going to create opportunities. This is very much core to us.
It's coming out of perhaps in some ways an unloved asset in a, in a major global companies will very much be core to us, and it will open up great career opportunities for the Asset Care people. All key management will transition across with the business. It really accelerates our transition to recurring earnings. You know, 99% of their earnings are maintenance based. You know, a high proportion of revenue is contracted with, you know, typical contracts, sort of two-five years. They're very sticky contracts and very predictable earnings, which is really positive. I think from a combined group perspective, you know, the business mix very heavily skewed now to revenue, recurring annuity style earnings. Sort of, you know, nearly 3/4 of their earnings now are annuity recurring based.
It's accretive on a range of financial metrics. It's EPS accretive, it's margin accretive. That's pre any cost or revenue synergies. Look, in reality, this opportunity is very much about the revenue synergies and the growth. You know, there'll be some, you know, some cost synergy opportunities. But this is not about headcount reduction. You know, all 600 people will transact with the business. They will all come across and they will all have a role moving forward within the group and it's how we grow it from here. It's very much been operated as a standalone business unit set up for sale and it will really plumb straight into our, into our business as a separate business unit and the corporate support will be there from above.
I think ultimately, and I'll touch on it more in the presentation, is there are multiple avenues to grow, not only Asset Care business, but the broader group with this transaction. I mean, it's the cross-selling opportunity, the capability, the platform will really accelerate our growth ambitions and market share. Look, I think there's no doubt Asset Care under our ownership is a very core business to us to really benefit from, you know, I guess that investment and love and care and attention that we will provide it. Look, I'm, you know, I'm really delighted that we've been able to make this happen.
I know there will be, a number of Asset Care people on this call today and I really want to acknowledge them and the experience and expertise that they bring to the table and really welcome them in to the SRG Global family. What I want to pare it back now on slide four, just for a moment, just to really pare back to how this fits in the business. I touched on our business earlier on in the presentation of diversified industrial services. You know, the engineering mindset, the critical services, the entire asset lifecycle of engineer, construct and sustain and being the most sought after in what we do.
I think when you hear that language and we move to slide five and you see how ALS, how the Asset Care business now fits within the group, it very much fits in the sustain bucket. It's very much a business that brings an engineering mindset. These are absolutely critical services to our clients. You're talking about structural integrity monitoring, testing, inspection. These are critical services to our clients. It very much fits in the sustain bucket, and it's all about that front-end element of asset maintenance in terms of monitoring, inspection, testing, certification, and then the SRG existing capabilities for that back end, maintenance, execution, style work. It really does allow us to provide a complete end-to-end solution.
You know, there are a few companies globally like us, now with this complete service offering and I think it is a very, very neat fit. It's very, very complementary. It's one that clearly, you know, the cultural fit, you know, this type of business, you know, the engineering focus, it very much, it's a really positive, matching of bringing two very complementary companies, together. It really aligns with strategy on slide six.
You know, I won't labor the point, but you can see our strategy and you can see the number of boxes that it ticks us within our strategy in terms of not only how we grow the ALS Asset Care or the Asset Care business, I'm gonna take the acronym out now, but the Asset Care business within our broader group, but also how we can take our broader group and grow it through the Asset Care business as well. I think probably a couple of points, you know, to really highlight here is just this is an acquisition that is completely complements our capability, but also our footprint. I've talked a lot in the past around wanting to increase our East Coast presence. You know, we're building momentum within the core SRG Global business in that regard.
This really fast-tracks that, is very much aligned to what we were trying to do, Clearly the capabilities I've touched on in the previous slide is highly complementary. I think ultimately, our ambition of 80% annuity, 20% project-based earnings profile, it takes us much further down that pathway, and I'll touch on that a little bit more in a moment. Probably now into a little bit more detail on the Asset Care business and the transaction overview. If we move to slide eight, you can sort of see the business at a glance, and I've touched on most of these points.
It is the number one player in the Australian market. Probably some of the key competitors, you know, global billion-dollar companies such as Bureau Veritas and Atlas are probably some of the key competitors that Asset Care is the number one player in Australia. Long history of operation. 600 highly skilled engineers, technicians, and practitioners that come into the group. Really stable and predictable cash flow and earnings. It throws off really good cash generation and basically 99% of the revenue is generated through maintenance work. Already touched on the profile in terms of revenue and the EBITDA margin circa 11%.
You can kinda see the geographic split there of east versus west, and you can see how that really complements the SRG Global national footprint and also our New Zealand footprint as well, and then the clear geographic opportunity this transaction presents for us. If we move to slide nine, this is perhaps some of the more technical detail, and I won't sort of, you know, I won't sort of labor the technical element too much, but you can really see the technical expertise and the breadth of what this business offers from an integrity and reliability engineering perspective. You know, inspection, testing, monitoring, and some of that training and certification. You know, it's very much a complete offering and really rounds out the capability of SRG Global in the asset maintenance space.
As I mentioned, these are critical services for our clients, which is really enables us to be really embedded with them in terms of the services that we're providing. If we move to slide 10, which what it comes with is a really experienced and highly skilled team of technicians. Management are very, very experienced, both within the Asset Care group but also in industry as well. Really takes the profile of personnel within SRG Global to now over 3,200 people within the group, which is an absolute asset for SRG Global. A lot of really experienced people and again, it will open up some terrific career opportunities for the Asset Care people that are joining SRG Global today.
We move to slide 11, which is the profile of business mix. You know, probably I think the key things to highlight here, it really does accelerate our shift towards annuity revenue and earnings. You can see from the Asset Care business, 99% of it is in the asset maintenance recurring space, you can kinda see the profile from both a revenue and earnings perspective in terms of recurring versus project-based. You know, it does take the group to, you know, 74%, you know, annuity recurring style earnings, which is, you know, quite a major step forward for us and very much on the pathway to the sort of profile of business mix that we want. Again, my apologies, I think we dropped out for a moment there.
My apologies, but I think we were just commencing slide 12 of the presentation. You can see here it's a step-change accretive acquisition. You know, if you look at the profile of the business, you know, for the sake of the example, increased guidance to AUD 72 million-AUD 75 million. I've taken the midpoint of that guidance for the sake of this exercise. You can see the contribution of Asset Care and how the combined group looks. I think from a financial highlight perspective, it is EPS accretive pre any cost or revenue synergies. As I mentioned earlier, it's not a cost synergy play. It's very much. Yeah, there will be some opportunities around property consolidation and optimization, but clearly it's all around revenue synergy. It is margin accretive. It's very much a capital light business.
You know, CapEx is sort of 2%-3% of revenue, and it throws off really, really good cash, which is a positive for our business. Kind of I think if we sort of close with slide 13, which is really, you know, I think the key of this acquisition. It's bringing two together two highly complementary market-leading business that will really accelerate our growth ambitions. What it really allows us to do is to leverage the platform from the combined platform from services, customers, sectors, geographies, and really cross-sell this diverse capability that we have. It allows us to leverage our market position, you know, really good technical capability, that one-stop-shop model, and, you know, our, you know, certainly, our view and experiences of customers are morphing more to wanting to deal with less players that do more.
You know, it allows us, you know, brings with it a market leadership, most sought-after position and brings more scale into the group, which will be an advantage against smaller competitors. Ultimately, the third bucket is, you know, how the opportunity to do to grow and leverage technology, you know, in terms of, you know, a lot of smart stuff this business does around Data, Operational efficiency, you know, in-house software that this group has and specialist equipment. I think for me the most pleasing thing here is when you hear me talk about the Asset Care business, you could easily just change Asset Care out and put SRG Global in because it sounds like I'm talking about the same company. I think for us, you know, this transaction very much stacks up as a steady state business.
You know, we think we'll be able to grow this business significantly as we move into the future. That's kind of, I guess, the, you know, the detail of the transaction. I'll probably move now just quickly to slide 15, which is all around the offer, the offer summary. Look, I think probably, you know, the detail's there for everyone to read and participate and play their part. You know, we are looking to raise AUD 46.4 million through a placement which is fully underwritten and will be a share purchase plan up to AUD 5 million. I think probably the key takeaway also is from a ranking perspective, all new shares will be that are issued will be eligible for the AUD 0.02 dividend, which we've announced, which was announced today.
I think for more information, you know, I'd encourage you to contact your contact within the Joint Lead Management Group. You know, I think for me in closing, prior to any questions, you know, look, a really positive step forward for us. This is not the grand final. It's really another step in our journey of what we're trying to build as a business that, you know, I'm delighted today that we've been able to bring, you know, a really complementary business into the group that really aligns with our strategy and is a really strong cultural fit as well. It's really off the back of what I think's, you know, a really strong performance for the base business in the first half of this financial year.
I really wanna thank our shareholders for all their support, and then are really looking forward to rolling up the sleeves, getting back to work, and really keep continuing to take this forward, this business forward and keep doing everything that we said we were going to do. Thank you.
Thank you, David, for the excellent presentation. Just on to Q&As now. I'll sort of manage the Q&As as they come through. There's a few thematics here, which I'll try to group together for the interest of time. One of them, David, is around the ALS, being on the market and being non-core to, sorry, Asset Care being on the market and being non-core to ALS. What's the performance been since the, since the five-year period, I guess, since it's been on sale? Has it reached its potential through that period or is there more to come?
Well, look, for me, and I mentioned earlier in the presentation, it's been very stable earnings for the period. I think the Asset Care team has done a terrific job, you know, through that entire process. You know, do I think there are great opportunities to, you know, through the combined group on growing the business further? Absolutely. You know, I think for me, you know, that's the opportunity and I'm really looking forward to the business joining the group and really investing on how we grow this business. You know, I think it's no secret it was a non-core asset within the ALS Limited. For us it's very much core and we want to invest and really grow the business into the future.
you know, I think it's got enormous potential in that regard.
Yeah. Thanks. Question around the process, the acquisition process. Was it competitive? How did you find the opportunity?
It was a competitive process. You know, I think as I mentioned earlier, it's a business we've tracked for five years. I think four or five years ago, the, you know, the expectation was probably more than our market cap as a business. Look, we've been tracking it. You know, I think what we brought to the table was, you know, I guess a corporate structure and a real footprint to cross-sell that gave us some advantage. It's one that, you know, I'm really pleased with the transaction and that we've been able to secure the business.
Okay. Perfect. Question around the client base of Asset Care. Is there an opportunity to work with them and is there significant client overlap?
Well, there's a bit of client overlap, but not extensive. What I think it really opens up is opportunities to really go to the combined group's clients and really take the complete offering. I think if you refer back to the map in one of the earlier slides, you know, that East Coast presence will really help, Built the footprint from an asset maintenance perspective on how we on how we grow the business and vice versa.
Okay. Terrific. Question here around the recurring nature of earnings and project-based earnings. I think, you know, obviously in our mind, there are strategic horizon leadership phase. You talked about an 80/20 phase from this, 2/3, 1/3. What, what's that timeframe?
Oh, look, I think, you know, it's. We'll ultimately get there when we get there. I mean, I, you know, to me, you know, we're continuing to morph further down the path. I mean, we've done a, you know, I think a terrific job over the last three or four years, really taking this sort of two-thirds annuity recurring earnings profile. You know, we're now at sort of 74%. You know, it's very close, you know, whether it's 74%, 78%, 80%, 82%. I'm not gonna get too hung up on that.
Yeah.
I mean, you can sort of see the profile that we're growing towards.
Yeah.
You know, we expect all three operating segments, including our project-based business, to continue to grow and, you know, probably on the, you know, over the next three to five years, the more inorganic opportunities will be more in that sort of, annuity recurring style, areas which will probably naturally get us to that point.
Yeah. Good. Just a question on Asset Care's contracts. How much fixed price contracts are there within Asset Care's business?
It's all schedule rates, time and materials. Very much the, you know, a good risk profile, contractual, terms with clients.
Some of these questions came up earlier in the presenter, David, before he talked about contacting the Joint Lead Managers and talking about the allocation. I think just to reiterate David's point around contacting the JLMs.
Yeah
... in the placement.
Yeah. It seems like a very long list of questions, Roger, and so conscious of time and so forth and look, you know, maybe stick to themes.
Yeah.
If you can.
I think a lot of questions here around M&A and are you done with M&A for a while?
Well, look, I think our focus in the short term is really bedding this business down and integrating it well. It's one that's, you know, we've, you know, we've got some external partners that we've used previously. That's one that, you know, we're already commenced that planning. The business will come across to us on the 28th of, you know, the transaction will conclude on the 28th of February from a completion perspective. You know, the integration to me.
You know, I'm very big on this, is that when you acquire a company, the first three, six , 12 months is about integrating the business well, getting the people embedded into the culture and feeling valued and really delivering that base case which we've put forward, and then look at how we grow it from there and do it in a very measured and stepped way. That's really my focus over the next six-12 months.
Okay. Just jumping around a little bit. Question on the result itself. Another solid result for the half, full year guidance. What's it gonna take to get there? The assumption is that that AUD 72 million-AUD 75 million does not include Asset Care's contribution.
Correct. It doesn't include Asset Care's contribution. That will be over and above that. Look, I think for us, you know, we've clearly put out upgraded guidance. It's a reasonably tight range and, you know, I think for us it's all around execution and, you know, probably converting a couple of things that may contribute a little bit. I think, you know, if we execute and execute well, we think we'll be in a very strong position to deliver against our guidance and our track record is of doing so.
Okay. Terrific. Just very conscious of time. There is one more on Asset Care. Dave was, how, you know, who are some of Asset Care's major competitors and what are their place in the-
Yeah, I think I might have touched on them and Bureau Veritas are one of their $12 billion market value business globally. Atlas are another, again, a multi-multi-billion dollar company. They play all around the world.
Yeah.
you know, clearly the Asset Care business is focused on the Australian market and that's, you know, that's our ambition for now and possibly New Zealand as well.
Okay. I think there's a couple of questions on dividends going forward. I think we'll just as a final question here to round it off. Do you see Asset Care continuing to be a dividend paying stock into the future?
That's why, you know, we have no set policy. You know, we wanna balance the growth and dividend elements of the business. I think our track record is of doing so. We wanna continue to do so into the future.
I think that's probably most of the themes, Dave. Yeah.
Okay. Look, really appreciate everyone coming on the call. There's obviously quite a bit to go through and absorb today and, you know, I think today's a really positive day for us as a company and, you know, we wanna roll up the sleeves and get back to work and keep delivering for all of you. Thank you for your time today and I look forward to catching up with you in the future.