We will hand over now to Michael Shirley, our final presenter of the morning, and from Veris. Michael, good morning, and we're also joined by Michael, CEO, and by CFO, Steve Harding.
Morning, Mark. How are you?
Very well, thank you.
I'll just share this.
Yeah, it's just loading now, Michael. You have to just, yeah, click, yeah, play from the beginning, but, yep, there we go. Perfect.
You're all right?
You can take it away, Michael, whenever you're ready. Yes.
Right. Thanks very much, Mark, thanks, everyone, for joining us this morning. Well, Steve and myself will give a bit of an update on the progress Veris has made in the first half of 2026. We'll share this presentation sort of through the day. Okay, look, the power of Veris really is in how we can harness our strategy to unlock value for our clients and continue to grow. Our consulting and our advisory services are leaders in using spatial data to provide solutions for our clients, doing that across industries. We're able to lead digital transformation for our clients, while harnessing the power of spatial data through AI and our digital solutions.
This really allows us to unlock innovation and sustainable outcomes at scale. The vision for Veris is to deliver significant growth and margin using this as a unique value proposition, as distinct from others in the market or where we've been in the past. It's been really pleasing this half to be able to show continued progress, half-on-half, as we've done over the last couple of years. What I thought I'd summarize here are a couple of the key metrics for the year to date. If you look at our results, our revenue is AUD 50.9 million for the half. This is a 9% increase year-on-year. This is really showing that strong underlying growth that we've got in the business.
Our EBIT is AUD 2 million, which is 62% up on the prior comparable period. This is a good outcome. Our underlying profit before tax is AUD 1.7 million. This is an increase of 69% on that prior period last year. We've been able to show strong revenue growth, coupled with increasing margins, which are really are starting to translate through to the bottom line. We've always talked about the digital and spatial revenue as being a key indicator of the execution of our digital strategy. This digital and spatial revenue is now at 29% of the total Veris revenue. That's up from 20% at the same period last year. This indicator is showing strong execution of that digital strategy.
We've got at the moment, at the half, a cash balance of AUD 14.9 million. That's a robust balance sheet, really allowing us to accelerate the execution of our strategy going forward. Our outlook is positive. We've got AUD 65 million in secure backlog. That's a good, strong number and gives confidence in the outlook in the short term. On top of that, our weighted pipeline is in excess of AUD 195 million. I think if you look at where we've gone with our strategy in the first half, our digital solutions are really active in the market. We're able to start scaling these across different sectors, different geographies. Our advisory business is growing at a really accelerated pace.
In the last year, we've both successfully integrated both Spatial Vision and Mesh teams into Veris, and that's building a track record for both finding positive acquisitions and also then integrating them successfully, while at the same time, continuing to deliver strong, accretive growth. What I thought now is I'll hand over to Steve, who's going to talk in a more detailed way about the half year financials and an update there. Steve, over to you.
Thanks, Michael. As Michael will expand on shortly, the execution of our digital advisory and consulting strategy is resulting in our operating model increasingly evolving to focus on client engagements, where we have a point of difference in our data capture, storage, analytics, and insights. We execute on this strategy and gain further traction for the solutions and analytics, we're targeting to our target markets. We're transitioning to higher quality revenues and margins from a higher quality client base. Pleasingly, whilst we increased revenue 9% to above AUD 50 million in the first half, we also improved the underlying earnings margins as the digital and spatial advisory strategy that we initiated about five years ago continues to build momentum. In the first half, 29% of that total revenue was generated from our DNS consulting and advisory projects.
This highlights the ongoing execution of the strategy when contrasted against the full year, FY 2023 result, when just 10% of revenue was generated from these DNS projects across the full year. These improved underlying margins reflect the use of data-driven analytics, solutions, and platforms we've developed in-house, which are disrupting traditional industry methodologies. These are driving more efficient, insightful, and valuable uses of the data we're delivering to our clients, and then the margins we're able to create. These solutions are moving us away from a commoditized, highly competitive landscape that then, in turn, creates more value-adding opportunities in the future.
As we turn to the detailed P&L, the 9% revenue growth that we saw year-over-year compared to the prior first half reflected the continued momentum in this growth of our digital and spatial services, as well as a full half of revenue contribution by the previously integrated team of data specialists from Spatial Vision that we acquired 12 months ago. This team provides additional capability in higher margin spatial consulting, GIS analytics, and digital solution delivery to our key markets. Offsetting this growth in DNS revenues was some market-related softness, primarily in Victoria, which was experienced within some of the business's traditional service lines during the first half. This was primarily reflective of project timing and regional market conditions. Whilst frustrating, these impacts are considered market-related and aren't considered structural in nature for the business. Veris's reported PBT was AUD 0.8 million.
However, this was impacted by a number of larger one-off expense items incurred during the half. When normalizing for these costs to reflect like-for-like performance between prior corresponding periods, we can see the continued improvement in our underlying EBIT and PBT margins. As Michael mentioned, our EBIT margin increased 62% compared to the prior year, whilst the underlying PBT result increased 69%. Pleasingly, the composition of our strong order book and project pipeline at 31 December gives us confidence that this trajectory will continue to be underpinned as we go forward.
If we move to the balance sheet now, I'd just like to highlight the maintenance of our strong cash position, which has been driven by a continued focus on delivery of these higher-margin projects, the crystallization of working capital through a continuing focus on our WIP and debtor balances, an ongoing focus on cost control, and minimizing the CapEx requirements via continued efficiency gains in the utilization and mobilization of our equipment fleet. I think, importantly, our strategic shift away from smaller clients to larger, key national and regional clients has underpinned the significant improvement in our working capital management over the last couple of years. The improved credit quality we can see resulting from the shift in the client base translates to improved visibility in our cash flows and has driven efficiencies in our WIP management and cash collection efforts.
The maintenance of our strong cash position was particularly pleasing, taking into account a couple of things, particularly the cash that we outlaid for the acquisition of Mesh and the 50% interest in the Parsel business during the half. The payment of the FY 2025 final dividend to shareholders, of which one wasn't paid in the prior year. Similarly, payments relating to staff incentives for FY 2025 results, which weren't incurred in the prior year, and significant non-recurring costs associated with the legal and M&A processes that we touched on above. Importantly, also, maintaining this robust capital base positions us strongly to pursue further strategic M&A initiatives that complement our digital and professional services strategy. We continue to be active in this space, but we'll also continue to remain highly selective in anything we choose to progress. Thanks, Michael. I'll hand back to you now.
Thanks, Steve. I'll give everyone a bit of an update on the progress in our strategy and some of the examples of it moving forward at the moment. We've been on a journey of transforming Veris from the legacy business into a spatial data and advisory firm, and this has been progressing well. We've been developing both our professional advisory capabilities and also building out a whole new digital solution capability and aligned revenue stream. The digital part of our capability is a real point of difference in the market. We've been able to embed our digital solutions and our platforms across a range of professional services, and this delivers faster, smarter solutions for our clients. Everything we do is anchored in that spatial data and in our capability.
We build on that deep domain expertise in spatial data, use that to deliver insights and a value proposition for our clients. We're really looking to provide solutions to complex problems for our clients and provide insights and value for them, and reflect that in the increased margins we're then able to generate as a business. The strategy is to diversify those revenue streams beyond our traditional surveying, build off that stronger base into a broader consulting and advisory service. These services are then supported and extended through those digital solutions that I'll drill into a bit over the next few slides. Fundamental to our strategy, though, has been scaling our high-margin business and providing growth across those sectors. Our survey business remains a really strong core offering, but if treated in a standalone context, it can be low margin and a really competitive proposition.
We've chosen, over the last few years, to leverage those relationships and that spatial capability to build a higher-value consulting business, where we're able to use the spatial data, the insights we generate through our digital solutions, to provide clients with high-value solutions to their problems. As part of that, we really aim to scale our digital and spatial business using our proprietary platforms, embedding a really strong digital-first model on our projects, and aiming to monetize the data, not just the time and hours of our people. We've grown from that, our consulting and advisory expertise and capability with some key recruits, really focused in the sectors we're choosing to focus, and through some early project stage wins, we've been able to leverage all of our capabilities, and we aim to be digitally differentiated and deliver a digital product by default.
M&A, for us, has been an avenue to pursue growth in this strategy. We've targeted accretive acquisitions that accelerate that strategy, and our integration approach for those is now delivering. We're building a track record of success in bringing people into our business and successfully growing from that. Our strategy is moving us up the value chain, building revenue and higher margins, and this higher quality revenue will be more sustainable, and that growth comes from depth and strength of those client relationships we've developed over the last few years. Our model is to intrinsically link our services and our solutions. The advisory business fuels our digital solutions, which at the same time are a differentiator for our strategic consulting.
The relationships we build through our advisory and consulting business build confidence and a basis to deliver our digital solutions. It's a model based on cross-sell and leverage to really accelerate strong growth. This delivers both high-margin consulting and advisory services, plus the opportunity for new and different digital revenue streams. These include subscriptions, software sales, and pricing by analytics, all of which contribute to accelerate the growth in margin and in profit. Overall, our approach is client-centric, though. We don't sell a commodity tool. We're aiming to build high-value solutions that deliver deep, ongoing relationships and ongoing and repeat work. At Veris, we've developed a suite of proprietary, cloud-based, AI-enabled digital platforms. This enables our clients to visualize their assets. We can provide value-added insights for their business. Our solutions operate across sectors and industries.
For example, Vantage is a property solution, whereas BridgeSight and RoadSight are optimized to transport assets from government and also to private sector clients. Whereas PhotoNavigator is a broad suite of applications that we've applied across industries. I'm gonna talk about a couple of those examples in a moment. Parsel is a new solution to our suite of applications. Coming as part of the Mesh acquisition, it's an application to optimize development contributions in the property sector. All of these solutions are in the market, delivering and gaining traction as we speak at the moment. We're in this period of acceleration and implementation, no longer in the development phase. I thought it's worth today addressing something that's been in the press a lot recently about the potential impact AI is having on more traditional businesses and the cost and risk in that.
I thought it'd be good to think about it from a Veris perspective. Our view, very strongly, is that AI, well-managed, well-directed, is a significant benefit to Veris, and we do not see it as a threat. We embraced the opportunity of AI a couple of years ago, and now it has delivered and will continue to deliver significant benefits to our strategy execution. Our digital solutions have AI at their core. We're providing unique insights and application. In addition, AI has then generated additional capacity in our teams without having to add further headcount. It's not a cost to our business, it's not impacting, it's an opportunity for further growth. Our advisory business, even, in there, AI is also a high-value tool, enables us to deliver alternate revenue streams and grow beyond where we started.
We see that for Veris, AI is not a threat, it's an opportunity, and it's one we've already embraced. I thought now what I might do is just give a couple of examples of our newer digital solutions in application in the market. First of all, we've been able to work with one of the major port authorities here in Australia to deliver a dilapidation survey, which is a really traditional piece of work, using it, though, through our PhotoNavigator solution. We've collected and completed 3D reality capture data with accurate spatial referencing, and then we've then used AI-assisted analysis to create a comprehensive digital asset record for our client. Our platform provides a faster, more accurate dataset.
It's accessible through a cloud-based platform, and we're now at the point of supporting that asset handover and the ongoing asset management for our client. This is a really practical application of the PhotoNavigator platform in a real-world asset management scenario. It's quick, accessible, and accurate data, easily shared for critical asset management applications. In a different context, we've been able to apply PhotoNavigator to solve an issue on a large-scale transport asset. In a short timeframe, just a matter of weeks, we're able to collect over 30,000 images, create descriptions and inspection reports using our AI-developed application. This has then provided significant productivity benefits and embeds us now in the ongoing asset management with this client. The asset record is now provided in our secure, cloud-based platform, PhotoNavigator, and able to extend out as that asset is used.
If you think about our application development team, it's been a real avenue for us to accelerate our digital strategy. They've developed a series of different applications targeted at a range of sectors. This team was part of the legacy Spatial Vision team, and it's an example of how we've been able to use our acquisition strategy to accelerate where we are with our digital strategy execution. They have a scalable model that lets them develop and build applications for a range of clients. Although the current focus has really been on government clients, we're now able to broaden this out to other clients through this, the wider Veris network that they've joined. An example of this is the QLD Fishing 2.0 app, and it's a demonstration of the power of our AI implementation, allowing us to build a unique solution, including real-time updates and reporting.
It's this style of application development that has huge opportunities as we consolidate and grow our business. If we look now at the pipeline and the outlook for the future, you know, we've got a secure future backlog of AUD 65 million. This is a stable platform that underpins the growth of the business. Our backlog's been strengthened by some key wins, such as Suburban Rail Loop and a number of the key digital and spatial projects. This shows a real strength of future revenue to come in the business. The longer-term outlook is very positive, with a weighted future pipeline in excess of AUD 195 million. This is key projects across industries and geographies and strongly aligned to our strategy.
Our acquisitions of Spatial Vision, Mesh, have consolidated our future workloads, strengthened the future margin with a mix of work in industries we're now aligned with. We've been reporting this backlog pipeline consistently over the last few years. Should have confidence now in how that translates out into revenue and continued growth for Veris as we go forward. In closing, you know, we think Veris are really well progressed in transforming into an integrated digital and spatial advisory and consulting business. We've got a clear strategic direction. We're demonstrating strong execution on that strategy, as we've articulated. Our model is going to market with a digitally differentiated approach that's building momentum with our clients. The Veris digital platforms and our approaches are accelerating our growth, building our digital revenue streams for the future of the business.
The first half results that we've articulated show a strong growth, building on the last year, and it's another step forward. We've got strong confidence to continue and consolidate on that growth over the second half. We do appreciate everyone's interest in joining us today. Mark, we're happy to take any questions that might come along the way.
Thanks, Mike. Today, we've had a few questions come in while you and Steve were presenting there. First one I'll take is, can you talk to maybe some of the downside risks of delivering the current pipeline of work? You know, whether we get a bit of softness in traditional property surveying, or is, I think, you know, a relevant risk, delays in, you know, major infrastructure programs kind of kicking off on time, whether, you know, it might slip from one half into another half. It is going to kick off, but inevitably, you know, these delays do tend to crop up. Maybe just touch on where some of the risks might be in that pipeline.
Yeah, look, I think, if you think about how we've built the model out, we've really tried to focus on diversifying our business streams, both into a range of industries that are growing and across geographies. One of the benefits of that in the Australian market is that when, you know, at a geographic basis, when some states are down, so Victoria at the moment, you've still got good strength in New South Wales, real growth ahead of us in Queensland, and still a pretty strong resources sector in WA. We're aligned across those sectors. We've also worked pretty hard, and Steve touched on this earlier, to get out of those small projects and small clients that are more exposed to those ups and downs in the sector.
You think, you know, there are challenges in the property sector, particularly, say, in Victoria, but in working with the bigger clients who are seeing that the housing crisis is going to generate long, ongoing need for future housing, we're aligned to that, aligned to key areas there. A key part of our strategy is trying to be different to others. Our digital differentiation strategy is all about being different in the market. We're not getting in a cost-based focus, chasing work for the wrong reasons. We've been trying to pivot out of that. One of the opportunities we do see is a lot of the bigger competitors, with other challenges in the market, have moved out of this space and leaving a bit more room for us in that space.
That's why we really want to accelerate on that strategy into the gaps in the market that are there for us. I think the diversification geographically and sector-wise really covers those ups and downs you see around in the country. We've aimed to be a differentiated provider using this spatial data and the insights. We're not trying to compete the same as everyone else in this sector.
Another question. You mentioned, you know, Melbourne's Suburban Rail Loop. There's, you know, a major infrastructure project you're involved in. Any others that provide a long line of work that you're in the pipeline bidding on or have, you know, already got in play?
Yeah, look, there's a couple of good transport projects in the pipeline still coming through in Western Australia. We're seeing good growth for us on the associated infrastructure with the Queensland growth there off the back of the Olympics. There's a number of We're working on Gold Coast Light Rail, some other projects there that continue to grow and evolve there. You know, we're seeing that albeit that peak of big infrastructure jobs in New South Wales has flattened a bit, there still is good work, and we're still continuing to support the rollout for Western Sydney Airport and some of the associated travel, transport infrastructure there.
You know, across those sectors, we're seeing lots of work, and we're also seeing lots of investment by government sector in broadening out into how they use the private sector in the digital applications. Strength for us, I think, particularly in the energy sector. We're supporting a number of renewable energy projects at the moment, using a number of our digital solutions to help them in that development phase, but then the construction phase that'll come after that. We see a really strong bow wave of work coming out of that sector.
Then a question about, you know, further M&A. You know, there's a lot of, there's a few providers doing, you know, digital twins and, you know, are quite similar, maybe same, but different, if I, if I can use that expression. Further M&A, would it be in the, in the digital space or more, you know, continuing to build out the consulting and analytics space? Maybe if you can just touch on that.
Look, I've got to argue with you, Mark, about whether they're same, it's different, but let's answer the question you actually asked.
Go ahead.
The point there is, look, I think there's a good pipeline of opportunities in front of us with M&A, and having the track record we've got, people are looking at that and saying, "Look, that seems like a reasonable group to join." We're really focused on small to mid-size acquisitions to build that pipeline and build that continuity again after some of the things that had happened with others in the past. We're focused predominantly in three areas. The consulting advisory skills, there's still some areas we can continue to fill geographic gaps there. There's a number of digitally focused businesses that we'll continue to acquire, look at through acquisition, and continuing to see how we fill out those geographic gaps. You know, I think that both Mesh and Spatial Vision demonstrated a mix.
Mesh, albeit an advisory professional services business, had the digital application with Parsel and Spatial Vision, application development team we've now been able to build from, has really accelerated that digital strategy. We'll continue to do both elements that's let us build that scale and also accelerate that digital strategy. There's some good opportunities in front of us. As everyone would understand, these things sometimes take a bit longer than you want, and there's a bit of growth there, but I think we've got some good pipeline of things in front of us.
Just in the, in the essence of time, I'm gonna combine these two questions into one, 'cause they're kind of two sides of the one coin. The market, you know, the environment you're operating in terms of, you know, competition, ability to, you know, get pricing that you want, and then, kind of the flip side to that, you know, input costs, retention of staff, trying to get staff, maybe just, yeah, the kind of operating environment, generally.
Yeah, look, I think it, you know, remains a real competition for, you know, good people and talent in the industry. We've worked really hard on our retention and attraction strategies because of the cost of recruiting people, and I think over the last few years, our attrition has really dropped significantly, particularly in that professional services and digital part of the business. Because a lot of people are looking at us and saying that strategy is core to what they do, rather than being in a bigger business, I want to be core to that. I think we're doing reasonably well in that competition space. You know, you'll continue to have pressures around salary and other things, particularly with the cost of living issues that are around at the moment.
We continue to move our model to a value pricing model wherever we can do, so we can incentivize and reward our staff and not be chasing margins down. That is an ongoing challenge. I think we've got good strategy around it, but I wouldn't dismiss the fact that we've got to continue to focus. I think in terms of competitors out there's a mix of competitors that continues to shift and change. You know, five years ago, we wouldn't have been competing with the Big 4 and the big engineering groups, and we are now doing that, and that gives us a really different position to be in.
It changes the pricing model, and that's a huge opportunity for us because we're no longer fighting down with very small businesses that we might have done six, seven years ago. We see upside in that, but it's part of exit, staying focused on the strategy and not reverting to where the business might have been in the past.
One quick final one, just on the debt I saw was down half a million, AUD 600,000 over the prior period, just a tad under AUD 3 million now. Kind of thoughts on where that should settle out long term? Do you want to get to debt-free balance sheet and just, you know, have lots of firepower for, you know, bigger projects, and, you know, acquisitions and being able to, you know, go at those hard if you want to?
Steve, do you want to.
Yeah, I'll touch on that one.
Yeah, thanks, Mark.
Yeah, sure. Historically, that debt line has been used to refresh and invest in some of that leading-edge technology and equipment that we've been able to sort of use to underpin these, both the, I guess, the benchmarking of our offering at the higher end of the scale in terms of the industry on the surveying and data capture side, but also the some of the technology around laser scanning and, you know, so drone fleet that are really underpinning some of the BridgeSight and RoadSight sort of applications. It's all been used to sort of invest into that technology, I guess, aspect that we've got within the business.
We'll just continue to, you know, fund the repayment of that out of the cash flow that generates from, those project margins. I guess we've. Yeah, other than that, it's a pretty clean balance sheet, which has, you know, capacity to really leverage up if we, if we find the right, larger acquisition opportunity. Yeah.
Okay. Perfect. Michael, Steve, thank you very much for joining us this morning from WA. It's been good to get an update. I will say that concludes our session for this morning. Just a reminder, we have another one, two, three, four. I think 14 companies presenting next week across three sessions. Please join us then. We will be putting the recording of this session up on the YouTube channel on Monday morning for anybody who maybe missed some of our early presenters. I will leave it there. Michael, Steve, thank you very much. I wish everybody a good weekend. Thank you.
Thanks, Mark.
Thanks, Mark. Thanks, again.