Thank you for standing by, and welcome to the Vulcan FY 2024 Results. All participants are in listen-only mode. There will be a presentation followed by a Q&A session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Rhys Jones, Chief Executive Officer and Managing Director. Please go ahead.
Thank you, and welcome, everybody. Can we move to slide 6, please, to start? You can keep going. Okay. Look, what I'd first like to comment on is that the past twelve months has been a very challenging environment. This is reflected in our volume being down 9% and also our gross profit, the dollars per ton, being down 7%. These two statistics demonstrate the severity of the market downturn. Despite that, we made NZD 148 million EBITDA, and an adjusted net profit after tax of NZD 40 million. One of the positives we had in the past year is we reduced operating costs by 1.7%, given the fact that we had 11 months of aluminum in 2023 versus 12 months of aluminum in 2024.
We also included in our costs all our expenses and development of our new sites for expansion. So the total reduction in operating costs, given the inflation environment, we believe was a credible result. In addition, ATAs for the second half 2024 versus second half 2023 was up 3.6%. Again, we believe that is worth noting. The operating cash flow of NZD 169 million was a highlight. We believe it was a reflection of both reduced inventory due to the slow market, but also the average cost of material was down. That year, overall, produced a return on capital employed pre-IFRS of 20%. We believe that's a credible result in an environment which is probably the harshest we've had for many years. If you could move to the next slide, please.
This slide talks about our different verticals. We've got six verticals, three in steel, three in metals. In terms of geography, we're widespread right across Australasia, from Tasmania to Western Australia, to the South Island, North Island, Queensland, New South Wales, et cetera, so we're very widespread geographically, therefore exposed to the different economic environments in each parts of Australasia, which do vary. In terms of market segments, as you can see there, our different product range enables us to service a wide variety of segments, from mining, engineering, manufacturing, construction, roll forming, the food segment, wine, transport, a wide variety of segments. Lastly, I'd like to comment that we're not dependent on a small number of clients. Of our top 20 clients, they represent 9% of our sales. That compares previously to 13%.
So since the addition of aluminum, we've become less reliant on a core number of large clients. Therefore, thereby, we've got good geographic spread, good market segment spread, and a very widespread group of clients buying off us. The next slide, please. Just to summarize our growth strategy and update. As we've indicated previously, we've got a strategy of ongoing growth within our existing businesses through targeting new clients. We've also expanded into new geographies, and we've talked about the platforms we have. Aluminum, stainless, and engineering services are all new platforms we've developed in the last five to 10 years. We've acquired 11 businesses since 1995, most recent of which was Ullrich Aluminium, and we see opportunities for further consolidation in coming periods.
In terms of our business improvement initiatives, very big focus on offsetting cost inflation, as I've already referenced, with productivity gains. We also highlight the fact we're getting growth and, well, revenue out of 17 different growth initiatives we identified in FY 2022. We're also focusing heavily on geographic spread and product footprint, so we have stainless and aluminum, for example, in new geographies. Lastly, customer engagement, absolutely ensuring, particularly in aluminum, the customer experience, product availability and DIFOT all matches that of other Vulcan products. The next slide, please. What you'll notice in this slide, it gives you a good sense of our wide network of operations, but also it's gone down from 72 to 66.
This really reflects the fact that we've had co-located some sites onto one, thereby, reducing cost and improving efficiency and ensuring customer service and one-stop-shop availability is improved. You'll note also we've got 22.5 thousand clients. This includes aluminum over the last six-month period. The next slide, please. This slide talks about aluminum. The aluminum business is a core part now of our metals division. We've got a good team in place, and we've introduced our core competencies from our business model into aluminum. Certainly, the cost and logistics side, stock availability, the principles and ethos, focus on health and safety. The idea also that we always want to do a fantastic job for the client, no matter what. That's enabled by the IT system that's now well and truly embedded in.
We've exited seven aluminum sites, of which six were integrated into our existing sites, and also we've created a brand-new hybrid site, which will be aluminum and stainless in Campbellfield. The real next step in our aluminum plan is to ensure that we start introducing our other disciplines of sales force effectiveness and improve customer service levels. That is really starting to take effect in New Zealand. Early days in Australia, but we're certainly making some progress, and we believe that will be beneficial in the coming periods. We want to grow our customer base, improve our depth of our, and our customer engagement, and we want to absolutely lock in the benefits of having an improved logistical and freight handling system in Australia. Next slide, please. In terms of health and safety, we're working hard on health and safety.
As a business that's opening up new hybrid sites, new greenfield sites, and acquiring businesses, we have an ongoing challenge in introducing health and safety systems and standards to the new environment. We've introduced a safety step change program, where our senior leaders are actively engaged, and we make it part of our core principles and ethos, and we talk to all employees about the need to improve health and safety, get their genuine engagement, and record near misses, identify hazards, and really focus on root cause analysis to improve health and safety. Separately, in the environmental space, we've measured Scope 1 and Scope 2, and you'll see there that in FY 2024, we've increased by 9.15% per ton of output.
This really reflects our volume decline and the fact that a lot of our emissions come from our trucking fleet, and our trucks are not as fully loaded as they would previously were, due to the slow economy. What should be noted, however, that our total overall emissions are down 1%, and that, that is compared a twelve-month period with aluminum versus an eleven-month period the previous year. So actual underlying improvement is above 1%. So we believe we're on the way to improve further in that area. Next slide, please. This is the operating backdrop during FY 2024, and if I start with New Zealand for a moment, I would say that this is one of the most challenging economic environments we've had in New Zealand, well before the GFC. A very, very tough environment.
Within our current environment, Australia as well has been very subdued. So we've had really quite a difficult environment in the last twelve months. A lot of destocking, overstocking due to rapid slowdown. All of that led to very much reduced activity and a lot of inflationary cost pressure as well. So in total, a very negative environment. Broader, across the global scene, we saw steel pricing in New Zealand Australian dollars decline by 4%, stainless steel by 14%, which is a significant number, and aluminum, the only bright spot, improved by 3%. So as you can see, the puts and takes in FY 2024 were very much skewed towards the negative and challenging. Now, I'd like to hand over to Kar Yue, to start on the group financial performance.
Thank you, Rhys, and good morning to everyone on the call. Just echoing Rhys's comment in regards to the 9% year-on-year decline in volume and 7% drop in our group gross profit dollar per ton. That translated to a 33% decline, year-on-year decline in our EBIT, the earnings before interest, tax, and depreciation. With strong effort from our team in containing costs while still investing for our future growth, we were able to mitigate some of these negative impacts on our financial year 2024 net profit after tax to a 55% year-on-year decline in financial year 2024.
As a result, we were still able to deliver a sound return on capital employed of 13%, but if you adjust that to exclude the impact of right-of-use assets and capitalized lease obligation, on this measure, our return is equivalent to 20% for financial year 2024 . Turning to the next slide, on slide 15, please. In terms of the earnings bridge from financial year twenty-three to twenty-four, volume contributed to a NZD 14 million decline in EBITDA, while margin, as measured in gross profit dollar per ton, contributed to approximately a NZD 30 million decline or drop, on a year-on-year basis. As you can see on the next slide, in terms of segmental, firstly, on steel, revenue fell by 21%, combination of selling price and volume.
EBITDA, as a result, fell by 37% year on year, as I mentioned, reflecting lower volume, which fell by 11%, and gross profit dollar per ton, which was up approximately 13%. On the next slide, in relation to our metals segment on Slide 17, revenue fell by 9%. Again, combination of slightly softer selling price and a drop in volume. As a result, EBITDA fell by 22%, driven by, as I mentioned, a 3% decline in terms of volume and some weakness in gross profit dollar per ton. On our OpEx, look on the next slide, regardless of market or inflation landscape, cost efficiency, as Rhys mentioned, is an ongoing core competency and discipline that we practice.
As outlined on this slide here, OpEx was broadly flat if you include the full twelve-month impact from our aluminum business, but on a like-for-like basis, the underlying decline delivered around NZD 4 million worth of savings, or 1.7% lower in terms of year-on-year comparison. Before I hand it back to Rhys, I just want to touch on a couple of more slides. First, on cash generation on the next slide. We delivered NZD 169 million in financial year 2024 in terms of operating cash flow, up 16%. A significant portion of it, obviously, is to do with the discipline that we continue to practice and manage in terms of our working capital and stock level. Net capital expenditure in financial year 2024 reached NZD 24 million.
In financial year 2025, we expect to spend somewhere between 30-35 million. Approximately 17-18 million of this will be maintenance CapEx. The balance will be for a combination of cost reduction initiatives as well as growth opportunities going forward. Final point, on the following slide, on slide 20, in regards to dividend and balance sheet. Based on a NZD 40 million net profit after tax, it has been determined that we would pay a final dividend of NZD 0.12 per share, bringing our total dividend for the year to NZD 0.24 per share. The final dividend will be fully franked for Australian tax resident and 30% imputed for New Zealand tax residents. Balance sheet-wise, we think we're still in a very strong position to fund any future growth initiatives ahead of us.
I'd like now to turn it back to Rhys, to conclude our presentation. Thank you.
Thank you, Kar Yue. As I mentioned earlier, Vulcan's geographically spread, and we've got a wide variety of customers and market segments we operate in throughout six verticals. So we do anticipate, as the economies of both New Zealand and Australia in time improve, we'll have direct exposure to that improvement. The recent Reserve Bank of New Zealand decision to bring forward the easing of the interest rate by point two five will definitely have a positive mindset improvement in the New Zealand market, but we don't anticipate to see any real change in volume until the new calendar year. Similarly, in Australia, they've still got a restrictive monetary policy, so we do not see any change in demand in Australia in the near term until those restrictions are eased.
So, to be specific, we anticipate the first half of FY 2025 to have similar volumes as the second half of FY 2024. In the new calendar year, FY 2025, we do anticipate some improvement. We're also seeing the rate of inflation come down, but the underlying element of inflation is that it's still embedded in most costs, so we're still gonna be very focused on reducing costs. And also, we'd also like to highlight that, rental adjustments, as they come up, are on the high side, so we're getting significant cost increases in inflation into rent. In terms of our business improvement program, as I've indicated earlier, we're pleased about the 3.6% year-on-year improvement, second half 2024 versus 2023 on ATAs. Ongoing focus on improving our ATA and customer focus.
We're also gonna really focus hard on ensuring we gain new customers, particularly in aluminum, as we improve in that area. As I've referenced, several times, productivity and cost improvement, we have absolute focus and we'll be unrelenting in that area. Our aluminum integration program is moving into the revenue generation phase through our salesforce effectiveness, so we believe that will have some benefit for us in coming quarters. We also plan to expand our coverage of our hybrid sites through existing, replacement and new locations. And now just to finish on the next trading update, the company has not provided earnings guidance for FY25 in light of the ongoing uncertain market conditions, but we will update on our trading at the annual general meeting in November 2024. That concludes our presentation. I'd now like to invite anybody with any questions.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Lee Power with UBS.
Hi. Hi, Rhys. Hi, Kar Yue. Rhys, just your outlook commentary around similar activity levels in first half 2025 versus second half 2024. Can you just maybe talk a little about what you're seeing in July, August so far? I mean, obviously take your comments around recovery, not coming to a CY 2025, but I'd just be interested to know if you're kind of already running at that second half 2024 run rate, or does it assume some recovery into the back half of the year? Obviously, someone of your peers yesterday mentioned a very tough July.
Okay, look, I would just, Lee, just very quick comment. The last few quarters is up and down between months. I wouldn't read anything into one particular month. If you look at the average volumes for the last two quarters, they've basically been flatlined. Would you agree with that, Kar Yue? So we don't really anticipate that to pick up until the new year at the earliest, Lee. I think the New Zealand environment, people are saying, "Okay, the interest rate cut is gonna lead to a stimulation of the economy." I've got no doubt that it is, and we're certainly getting some customers talking about projects that are going to be, you know, repriced and likely to go forward.
But the reality is these things take time, so it takes quite a long time for that pipeline to fill, orders to actually be placed, et cetera. So we believe the New Zealand uptick will be, you know, starting sometime in 2025. But in Australia, we've still got restrictive environment there, so we've still got a high level of uncertainty. So net-net, we probably see that just carrying on the same volumes as what we had in the first half of this financial year, and it'd be very similar to the second half of last financial year. I invite any comment from you, Kar Yue or Adrian?
... Sure. Thanks, Rhys. Yeah, so good morning, Lee. Thanks for the question. So I would say in the context of sentiment among our customers, it certainly has turned positive from what was quite a negative sentiment in New Zealand. As to when that sentiment actually translates to actual work on the ground, that remains to be seen. Yeah.
Okay, thank you. And then just on cost, like, you obviously did a great job in the second half. You also call out potential rent adjustments and then that kind of ever-present inflation. Do you wanna give a little bit more color on that? And are you-- do you think you'll be able to offset them in first half 2025, given cost or productivity improvements?
Okay, so, I'll have a crack at that, Lee, and this is somewhat speculative, but I'll give you my best effort. Look, the reality is we've got some rent increases occurring, so you just can't avoid that. As the anniversary comes up, there's a rent increase. But on the other side, we've been consolidating some sites, so we've been reducing rent. But on the other side, again, we've had... We've expanded some sites, so we've increased more costs. We're actually increasing our potential, coverage. So that needs to be taken into account. But for pre-existing businesses, excluding that expansion, I would anticipate to us to offset those costs. So we're specific about it. We have a very detailed sessions within the company by unit, with detailed cost programs managing that appropriately. We don't make redundancies.
They're quite rare, but what we do is we have a sinking lid policy and looking at moving people across or between businesses, so we're certainly focused on that. The other comment I'd make, Lee, which is a bit beyond the question, but any uptick in volume, we won't be increasing our costs. We've got plenty of slack capacity there, so we'd benefit directly without any cost increase. Do you want to comment, Adrian, because you're strong in this area?
Yeah. Hi, Lee. So look, just to endorse Rhys's comments, it becomes a little bit complex giving you an exact answer to this. Yes, we do have rent and outgoing increases, but when we form the hybrid sites, we go from two sites to one, typically. So there is a saving there as well. So as they come on board, that negates, to a certain degree, some of the rent increases. And from a cost point of view, as Rhys had mentioned, the detailed program, that's just ongoing. So everything's looked at, and it's a very detailed project. So managing cost, we are hopeful of retaining the progress we've made this year into the forthcoming year.
Yep. Great. We'll take the next question. Thanks.
Your next question comes from Sharia Bison with Bank of America.
Morning, Rhys. Morning, Kar Yue. Thanks for taking my question. Look, one question on your balance sheet. So, could you talk us through what level of leverage are you comfortable with? And if you could just talk about a few numbers, right, and thinking about, say, net debt to EBITDA two point six times. I think in the past you've told us that you're sort of comfortable in that one to two range. So to answer the question, firstly, do you think that the range has gone up? And secondly, as you say, you know, markets remain quite uncertain. Have you considered working on the covenants to make them more flexible? Thank you.
Sure. I'll have a go at that question. Thanks, Sharia. So if you think about our overall where we are in the economic cycle, we would like to think we're near the bottom, if not at the bottom, of the economic cycle in both Australia and New Zealand. In the context of two point six times, yes, it's higher than what we would like it to see, but our view is that the improvement will come. Typically, what ends up happening, as you can appreciate, we are a stock and debtors business. So working capital changes in management and initiatives typically lag by up to six months. And so whilst we've been successful in reducing our debt level and continue to do so, the...
My expectation is that there'll be further improvement to come in terms of our working capital position. Part of it is also we are a growth company. We are positioning ourselves for growth, so at a low point in the economic cycle, we're sanguine, relatively sanguine in terms of where we are positioned from a leverage standpoint.
That's helpful, Kar Yue. And just the second part of the question, you know, just have you thought about, you know, working around the covenants, or you think you'll be quite comfortable below that?
That's right.
Sorry, I missed it. Sorry.
That's correct. Yes, we are comfortable with where we sit.
Sure. And Kar Yue, a very quick one. Just thinking about the freight costs, you obviously made some comments, you know, on some charts on freight costs. Some of the channel checks suggest that, maybe a sort of a surcharge on, you know, on goods coming from, say, China to Australia, like the surcharge was introduced a couple of months back. Can you just comment on that, and how do you see the freight costs over the last month or so?
Good thing. We'll get Adrian to respond. Thank you.
Yeah. So yes, yes, we have seen the increases, and obviously due to the Red Sea issues and freight through Singapore especially. So freight has increased over the last month or two. It's, it is by a couple of %, as you correctly point out. We do see the-
... it could increase further into the Q4. We're taking discussions at the moment, but from an overall point of view, it's not completely relevant to our complete business, so it depends what percentage comes from overseas, so we are comfortable with the increases that are coming through.
Great. Thank you very much.
Your next question comes from Rohan Koreman-Smit with Forsyth Barr.
Morning, guys, congratulations on a good result in a pretty tough period. Just going back to your revenue, and, you know, you talked about volumes down, and you gave some color there early on the run rates. You know, your comments on Aussie being weaker, are we to take that as, you know, Australia could be kind of backwards this year in terms of volumes comparing year on year, in twenty-five, and that's partially offset or mostly offset by an improvement in New Zealand?
Yeah, I can't provide specifics on that, but what I would say is that when we think of Australia, we think of the different parts of Australia. So if I just give you some general color on that, you would see that particularly Queensland, with the Olympic construction, should be a positive. Mining is still stable. There could be some downward pressure on mining, but Victoria is definitely quite weak as an economic environment, so we see there's quite a struggle. Then New South Wales have probably got some upside. So I think there's ups and downs across all of that, Rohan, so it's actually quite hard to estimate.
But our general comment was that Australia's lagging behind New Zealand in terms of when it's gonna start cutting interest rates, so we're quite dependent on that. And I think when that interest rate cut starts coming in Australia, you will see some improvement in sentiment and then demand later.
Do you think there's a risk that Australian volumes, you know, are softer in the twelve months ahead than they've been in the past twelve months and, you know, given the RBA?
I think just the general comment we'd make, look, the general comment I'd make is that, in this coming six months, we think it's probably gonna be some of the last six months, and in the new calendar year, depending on what happens with interest rates and the like, you could get an uptick, or you may not. We just don't know.
Okay.
Yeah, just to add to Rhys's comment, Rohan, and to the rest of the call, I appreciate that you want more sort of quantitative guidance, whether it's volume, margin, or overall earnings, but we're dealing with a turning point in the economic cycle, both in Australia and New Zealand. Depending on one's view on each of the monetary policy and what impact, lasting impact it has in the next six to twelve months, it is very hard to generalize. You know, if you're asking, could it be softer? Yes, it possibly could be, as one of the scenarios. We're not providing any specific comments on that front at this stage.
Yeah, I appreciate that. Just on the gross profit dollars per ton, you know, it looked like it kind of came off quite a bit in the second half of the year across most of them. Can you just give us some color on, you know, there's obviously been the Whyalla mill outage, and now you've got imports and long steel, Whyalla's back on board. Yeah, can you just give us some color on pricing on both sides of the Tasman and maybe a little bit of color by product and where you're seeing pressure?
Again, I'll get Adrian to comment as well. There's no question that steel distribution in Australia has been quite challenged in the recent past with the Whyalla disruption, imports coming in, and obviously, the Gupta business very focused on cash generation because of the big outage, which presumably cost them tens of millions of dollars in Whyalla. So that definitely had a disruptive effect, no question about that. I don't believe that's sustainable, but we just don't know. In terms of aluminum, we've been working very hard on maintaining and improving our market offer in aluminum, so we believe that our margins and the like are, and our pricing outlook is pretty good. Engineering, ups and downs there, quite a challenging market on occasion, but overall pretty steady.
Then in the New Zealand market, we've certainly seen some erratic pricing behavior, and you've probably picked up on it, Rohan, with the results of some of the other listed companies. You've probably recognized that some quite serious levels of desperation are out there with a very, very slow market in New Zealand. Now, whether that's sustainable or not, I'm not sure. Our overall margin decline, we believe, has been quite well managed, and we're actually relatively happy with it. And I'll invite Adrian; he's been through these cycles many times, and he'll have a good view on it as well.
Yeah, so Rohan, just your comment on Whyalla. Obviously importing, there's three or four options into Australia and New Zealand. From a pricing point of view, they're net even, so there's no disadvantage importing from a price point of view compared to buying locally out of Whyalla. They're very even. So from affecting GP dollars per ton, that doesn't come into it.
Okay. Next, questions, thanks.
Your next question comes from Owen Birrell with RBC.
Yeah, good morning, guys. Just a couple of questions from me. First one is just on the CapEx, you know, the NZD 13-18 million of growth and cost initiatives. Just wondering if you give us a sense of, I guess, more specifically, what those are and whether that CapEx is going into, I guess, sort of hard infrastructure or more systems and so forth?
... Sure, I'll have a go at that question. Thanks. Good morning. So on that NZD 13-NZD 18 million, roughly, of growth-driven initiatives and cost reduction, approximately 30% of that relates to cost reduction. The balance is on growth. The growth really is a combination of trucks, a combination of hard assets. We're talking about crane, we're talking about laser machine, and that type, that nature of investments.
And new sites as well.
And new sites, and as we continue to either refresh or expand on preexisting biofuel sites.
That's perfect. And just second question from me, just looking at the competitive landscape, by, I guess, by state in Australia and across New Zealand, can you just give us a sense of, I guess, how your competitors are acting? And also give us a sense of what degree of channel inventories are in the system? You know, or where we are in the cycle, I guess, from a channel inventories perspective.
Okay, I'll have a crack at it then I'll get Adrian to have a go as well. But if I just start with long steel products, so distribution steel. What we're finding in New Zealand and in Australia, both places, is there's a high level of desperation amongst our competitors, so we've seen that. In New Zealand, the economic environment is very tough. We have seen a deterioration of stock availability and service levels. You know, we've got a pretty sticky client base, and we're very much focused on service and the like. The irony is, when things are tough, you've got to be 100% reliable, otherwise your client has staff hanging around with no steel. There's a perverse reverse on what you expect in terms of benefit in that environment.
In Australia, what we're seeing is the Gupta business often selling for just pure cash generation purposes, and it's certainly creating a lot of stress and tension within the Australian market. That's the general comment. The landscape is highly competitive in Australia and highly competitive in New Zealand. If I go to coil, probably in New Zealand, we've got a very big decline in manufacturing, so that's quite tight, but the clients tend to be more tied to people, so not so challenging. Plate processing across Australasia, very reliant on transport industry, and forestry, particularly in New Zealand. That's holding, but it's certainly had some significant decline. We're seeing a number of players really struggling to make ends meet, we believe. We're not certain about that, but we think so.
Then I go across to aluminum across the board in Australasia. We're seeing quite a big decline in demand in New Zealand at the moment due to the fact that window ware-based products are really slowing down as residential construction stops, but we're overall pretty happy with that because we've basically improved the service and availability. And in Australia, we're certainly probably seeing a similarly competitive environment. But overall, in aluminum, we think it's stable. Stainless is relatively stable, possibly even improving somewhat with infrastructure and water and wine and food processing and the lower exchange rate, dairy industry, so and our expansion into hybrids. So we're making some progress there. And the engineering steels very much related to the mining segment and manufacturing. Manufacturing is definitely quiet.
We've seen no real change in competitor intensity, but there are the volume declines from one month, there's puts and takes from month to month, so it can be some erratic pricing on occasions, but it's not widespread. So if I summarize all of that, I would say steel long products are the main concern, and that's just through vertical construction is really at a low point in both Victoria, Auckland and Sydney and New South Wales and Brisbane at the moment. And until that comes back, it's going to be a real challenge. And on top of that, the Gupta-based businesses are really struggling for volume. Do you want to comment, Adrian? Because I don't, I don't think the competitive intensity is getting worse.
No.
I think it's principally located in long product steel.
Yeah. No, look, I agree. So, just to add to that, the one point I would make with Whyalla stopping production for a couple of months in Australia, a lot of importers come into Australia, so, there's an overstock situation for three or four months, which increased the competitive element, just in Australia, not so much New Zealand. So that's what I'd add to that.
Next set of questions, please.
Your next question comes from Grant Swanepoel of Jarden.
Good morning, team. Three quick ones from me. I see in the second half, your ATAs actually dropped from the first half. Is that just noise, or is that because your cost out program is reducing your competitiveness, or has the industry competitors picked up on that one?
Yeah, yeah. Oh, so Grant, that's entirely related to trading days. So the second half of the year has a lot less trading days than the first half of the year. That's why we do year-on-year, like-for-like half-year comparisons.
So, that means some people don't trade with you in half a year?
Correct. That's, that's right. So the way we measure these numbers to provide both year-on-year and sequential timeframes so that you understand in the second half the customers that trade at least once with us in the last six months is how we measure our active trading accounts. And so there are occasionally customers that would only actually end up trading with us once in the last six months. And they can be large chunky transactions, they're not just small transaction values.
... Thanks, Kar Yue. My second question, just, the last time we discussed acquisitions, you said you had three or four potential ones you were looking at. With your net debt now at two point six times EBITDA, are you still looking at acquisitions? How did those three to four progress?
Mm-hmm. Yeah. Okay. So, quick comment on that. We are definitely looking at more acquisitions, Grant, and we are working away diligently on several. They're still at early phase, but they're quite significant in size, so we're just working away, doing our homework, and in due course, we hope one or both come off. But I'll maybe hand to Kar Yue in terms of the balance sheet component of that, which I think part of your question hinted.
Thanks, Grant. So really, the gearing position in itself is not a cap or a limit to our appetite for growth, be it through organic or acquisition. I think if we do a good job in securing the right asset that fits with our model, in the right vertical, and we buy it at a fair price, yeah, I think our shareholders will provide support for us to doing exactly those.
Thanks. My final question, now that you've got six hybrids underway, I think the last time we chatted you were targeting 18. Is that still the case over the next couple of years?
Yeah. So the plan is to roll out and explore opportunities for more hybrid site. We're just mindful that we're focusing on doing what we do best, which is just continue to execute at our own pace and at our own cadence.
The quick observation I'm making, Grant, is that our goal is to do as many as we can, but we want to do them all to a high standard, is what we're saying. So we don't wanna put a timeframe on it, but we've certainly got a list.
Thanks for answering those.
Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Liam Schofield with Morgans.
Morning, guys. All my questions have been asked. Thank you.
Thank you.
Thank you.
There are no further questions at this time. I'll now hand back to Mr. Jones for closing remarks.
Thank you very much for attending this briefing, and certainly appreciate your support. Thank you.