Thank you very much. Welcome everyone. As the moderator said, we're here for the Capital Limited 2021 results announcement and results presentation. Again, as the moderator said, I've got joining me on the call from London, excuse me, Giles Everist, the group CFO, and Conor Rowley, who's group investor relations and corporate development. We've obviously released to the LSE this morning. There's links on our release through to our website with both the RNS and the presentation. For today's call, I'll be referencing slides, will be in the presentation. Again, if you need that's on capdrill.com. I'm gonna kick off on slide three, which are the financial highlights. It's a year of broad-based highlights. We've already pre-reported our revenue back in January.
Revenues of $226.8 million, which was a 68% year-on-year increase on that, followed an 18% increase in the preceding year. Our EBITDA was up an extremely strong 116.9% to $73.3 million. Look, records all round. Our profit was $70.3 million, which is an outstanding number. What we've done for the purposes of our presentation is we've divided that into the adjusted net profit, which is another way to describe it would be the operating net profit for the operating businesses of drilling, mining, and labs. That was $36.6 million, up 227% on the preceding year.
We obviously had a very strong performance from our equity investment portfolio, where we recorded gains of $33.7 million. Very solid returns for the year. The return on capital employed increased moderately over the preceding year. We had a return on capital employed of 22.7%. I think it's important to note, however, that this was in the first year post a significant capital raising, which took place in December 2020, and the commissioning of a new significant contract. To keep that return profile, we're very pleased with. We finished the year with a very modestly geared balance sheet with net debt to equity of around 14%-15%.
We have reported our position with adjusted net cash because obviously we've got a significant $60 million investment portfolio. When you look at that in aggregate, we finished the year with adjusted net cash of $28.3 million. Very pleasingly, we increased our dividend. The final dividend that we've reported is for $0.024 a share. That brings the total 2021 dividend to $0.036. That's a 64% increase year-over-year. Just to round out the highlights we have today provided our revenue guidance for 2022. We've given a range of $270 million-$280 million guidance, and I'll go into a little bit more on that with the outlook.
Moving to slide four, I think the key thing that I would like to just bring to everyone's attention here is that had I done this call 2-3 years ago, we would have predominantly or almost exclusively been talking about Capital Drilling. We've made huge strides in the past 3 years in establishing what are now two very well-established operating businesses, as well as our strategy around our investment portfolio to provide much greater depth to the business in terms of its service offering, and value creators. The mining business, we'll go into more detail in the mining laboratory business, but clearly starting to contribute more to the group revenue profile. I'll draw your attention to the chart on slide four on the far right. We will...
The non-drilling revenue even back in 2020 was 9%. It expanded to 22% in 2021, and we're expecting further proportional growth in 2022. Very pleased that we've now got four pillars that are helping drive value creation for the company. On slide five, health and safety stats always at the forefront of Capital's business model. I think what I would like to really just bring to everyone's attention here is that we last year brought on stream 1,000 new employees. We also brought on stream a very large scale mining contract, which is a fairly new discipline for Capital. We've been doing some ancillary mining services since 2019, but the contract in 2021 at Sukari is a game changer for the company, and that involved 400 new employees.
It's very pleasing that with such a growth in employee numbers, we still managed to achieve outstanding industry-leading safety standards. It just speaks volumes to the culture that exists within the company. Very pleasing results. I'm gonna spend on slide six. I'm just gonna spend a little bit of time on six and seven, which talk about the macro, and I really can't emphasize enough just how supportive the macro environment is for a service provider to mining and exploration companies in the current market. We have for many years now talked about the disconnect that has been in the market between metal prices and the charts on the left-hand side of slide six.
Obviously, the yellow is the gold price, and that is back at or near record highs and certainly back to the highs of a decade ago. Metal prices, bottom left, again, exhibiting extremely strong conditions. Top right is the financings. Again, you're talking 2021, the capital available to mining and exploration companies is back at decade highs again. All the conditions have been extremely supportive, yet as you can see back on the top left, the exploration spend is still tracking 40% below where it was a decade ago. We had been banging the drum about this, seeing a disconnect, and in 2021, that disconnect started to correct itself. Now, as we move on to slide seven, it's just a bit more of that thematic. Again, the top left looks at exploration budgets.
It breaks it up by region. Again, you can see well off its previous highs. On the bottom right, this is another important point to note, and this is the reserves of the gold industry. As you can see, from 2012 to 2019, from peak to trough, you saw a 19% decline in the reserves, and that's the asset base of the companies. Now, that started to move in a positive direction in 2020 and 2021, but some of that obviously is gold price related as reserves have restated. The key point is that over the past decade, exploration spending has been absent from the market while companies have been running their existing assets for cash, and that has led to a decrease in exploration spend and led to a pipeline deficiency.
What we saw in 2021 was a surge in demand as exploration spending came back. As you can see from these charts, still a long way off previous peak cycle levels. The bottom left looks at the CapEx, which is the lagging indicator, and this is obviously the one that really affects our mining business. As the market demand is picking up, it's flowing first initially to the exploration and laboratory business. The number of companies at the moment that are going through advanced studies, DFS studies before moving to financing and then project commencement commissioning or pro-project commencement, that pipeline has grown very strongly over the last 18 months, and that's a very strong leader indicator for the mining business. Look, all the macro indicators are really positively aligned at the moment.
Yet, as I said, you know, we've really only seen 2021 as the first signs we've seen as a service provider of that demand translating into, or of those macro indicators translating into a surge in demand. We're very positive on the outlook. Moving on to slide eight. I'll just give a brief overview of the operating businesses. Drilling, it is the strongest demand in a decade. The bottom left tells the story of utilization, which had obviously been gradually picking up since the trough in 2015. We saw a surge in 2021, and that has continued into 2022. Top right is the size of our fleet, which, again, you can see between January 2013 and January 2021, we had no fleet growth.
In 2022, we've gone from 94 rigs in January 2021 to 109 in January 2022, and we're gonna be adding further rigs this year. Demand is well and truly back on the table. Utilization is increasing, productivity is increasing, pricing is improving, and contract terms and conditions are improving. The header says it all. Strongest demand in a decade, and we see a very good run rate moving forward. Moving on to slide nine. Mining business. I'll spend just a little bit of time talking about the Sukari waste mining contract. We announced this to the market in December 2020. We've kept the market updated over 2021. It's an outstanding achievement. Largest contract the group has ever won.
As I said earlier, it involved us onboarding 400 new employees and bringing to site just over $65 million worth of capital. We commenced in Q1. We've delivered ahead of contract schedule. We've done it safely, and the contract is now running at steady state. It's important to note that 2022 will be the first year where there is a full year's contribution from this contract. The pipeline is improving. We've built a lot of capability in our mining business. Now that Sukari commissioning team has completed their job, we've got the flexibility to look at other jobs that are in the market. Our balance sheet, as I said in the opening, is kept running gearing of about 14.9% on a pure debt to equity basis, not allowing for the investments.
Certainly we've got balance sheet capacity to help fund further growth. As I said, with that macro overlay, increasing number of mining projects that are moving through to the DFS stage, which are gonna require a lot of new mining equipment. The demand profile for this business, as I said, moves with a little bit more of a lag to drilling and labs, but very strong outlook. Slide 10 is the laboratories business. We're getting a little bit more detailed in our disclosures here. The business, as you can see, is starting to get some critical mass. Revenue growth in 2021 of 76%. We've guided the market to revenue of $30 million in 2022. The platform is very well established now.
It was originally an Americas platform with the head office in Langley, in Vancouver. However, in the last 18 months, we've grown this business very strongly through Africa. Now Africa is a key contributor to the business. We've got a very good footprint through Europe, the Americas and Africa. We also have a strategic arrangement with Chrysos, which is a revolutionary new assaying technology that was developed and commercialized in Australia. We have done a deal with Chrysos, and we have been taking their technology into the international market. We announced last year that we'd commissioned the first-ever international Chrysos unit at the Bulyanhulu Gold Mine in Tanzania with Barrick Gold.
There's 2 more units due to be commissioned in the first half, which is in the top right in the commentary section. We plan to have 6 of these units in operations by the end of 2022. Each of these units has got the potential to generate up to $5 million a year in revenue. We are in advanced discussions for the rollout of further units in 2023 and 2024, and what this is giving us is a USP and really propelling the growth of our lab business. Look, a very pleasing year. It's moved to profitability and the platform very well established. Slide 11 is our investments. We have had an outstanding year, which I'll cover in the results.
The pyramid shows you the strategy which is really working with a number of predominantly juniors. We have done some funding for producers such as Allied and Firefinch, but working predominantly with juniors. As they develop, we can see the opportunities, work with the team, provide our services. We tend to follow our investments. We have gradually concentrated our portfolio. As you can see, our investee companies, we generated $41 million of revenue from investee companies in 2021, which is up very strongly from $5.2 million in 2019. On slide 12, we include a sustainability slide. The team in London have been working tirelessly with a number of consulting groups around the group's reporting framework around ESG.
A lot of the building blocks were already in place, but we didn't have quite the reporting framework, and that is being improved and communicated to the market. We have obviously enhanced our corporate governance. We've onboarded Cassie Boggs, who's joined our board, as the chair of the sustainability committee, increased disclosures around all of our policies. Look, our social responsibility, I think we remain a bellwether really. We've got 90% of our employees are national employees, and we're certainly doing a lot of work in the social sphere. Environmental, we have today with our annual report, announced our carbon footprint, and we're taking a number of initiatives to reduce and improve our performance moving forward. Okay, moving on to slide 14 on the results.
I won't read through all the numbers because obviously, we have covered it in the introduction. I think what was particularly improving is just the way the operating leverage fed through the profit and loss statement. We did have an improvement in our gross profit margin, and a lot of that related to a huge amount of asset movement, cross-border asset movement in 2020 and the first half of 2021. That really discontinued in H2. So we're no longer incurring the cost of that cross-border asset movement. Then other initiatives improved maintenance practices, reduced repair and maintenance from new assets, supply chain efficiencies drove improvements in the gross profit margin. As we improved asset utilization, that operating leverage fed through the profit and loss statement.
Again, outstanding results and records at every line for the company. Slide 15 is the investment contribution. Bottom left, you can see that the strategy really was enacted in 2019 in a meaningful way with cash outflows. Portfolio cash flows have been broadly neutral over the following 2 years. Look, we've consolidated down and focused on a number of core holdings. We had outstanding performances from Firefinch and Predictive in particular. I think against any benchmark, it is an outstanding performance. Now the investments are a substantial value contributor to the group with year-end value of $60.2 million. I'll move on to slide 16 and 17. We've got the net cash waterfall on slide 16.
I think the key things here are that we had an outflow associated with working capital as the business grew and as we ramped up the Sukari load and haul contract. The business still maintains a very healthy balance sheet. Moving on to slide 17, that's CapEx presented in the top left. So you can see just how much we spent between the Sukari and the move into mining in a significant way, as well as obviously increasing our drill rig fleet. We've provided guidance today for 2022 CapEx of circa $45 million. Obviously, a bigger business requires a bigger sustaining CapEx, and that's a decent portion of the guidance, albeit we are adding further rigs within our CapEx budget this year.
The bottom left is an important one because we had previously communicated to market that there were gonna be cash flows out, associated with the ramp up of the Sukari and the working capital and the growth of the business. We communicated that we would be over that hump at the end of the first half. If you can see cash flow bottom left, well, bottom right of the bottom left chart, you can see that that story came to fruition second half of the year. As we were over that hump, the cash flow started to come back in a positive direction to the business. Moving on to slide 18, balance sheet. I've mentioned already a few times, net debt to equity on a traditional measure, 14.6% actually. But with the investments we're in adjusted net cash position.
The balance sheet's in really good shape. We do have $62 million worth of debt, which is spread roughly about 25% of it to a revolving credit facility, 75% of it is asset-backed financing attaching to contracts and the debt amortizes over the life of the contract. We've also included a work in hand slide, which shows a very solid pipeline for the group with the majority of the 2022 guidance that we have put in the market today already locked away with existing contracts. Slide 19, the dividend. Look, I've already quoted the numbers. Solid increase year-on-year. It's toward the upper end of our payout ratio. The dividend timetable is on slide 19 in the bottom right. Moving on to the outlook, I'll take you to slide 21.
It feels a little bit bland, this one, but I have to say the continued services expansion is a key point to make here in that we've now established. We've got a very well-established drilling business. We now have established platforms for both the laboratory and the mining business. This year is really about adding and expanding those businesses and building on that platform, which is then consistent with the business' focus on adding further long-term contracts to the business. Good examples are across our new verticals of the Sukari earthmoving contract, 4-year contract. The Bulyanhulu lab contract, 5-year contract. We're adding more long-term contracts in different parts of the business. Look, we'll continue to maintain a strong balance sheet and unequivocally remain committed to delivering what is industry-leading health and safety metrics.
Finishing off on slide 22, outlook and guidance. Reiterating the point that the macro conditions are as supportive and as strong as we have seen in the company's history as a listed company. All of the key measures are aligned. As a result today, we've issued a guidance of $270 million-$280 million of revenue for 2022. With that, I will hand back to the moderator for Q&A. Thank you.
Thank you. If you do wish to ask a question, please press zero and one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero and two to cancel. There will be a brief pause while questions are being registered. The first question comes from Oliver Prückluck, Berenberg. The line is now open. Please go ahead.
Hi, guys. Congrats on a great set of results. Just got a handful of questions, please, if that's okay.
Sure.
Firstly, what's the ARPU assumption you build into your revenue guidance? How are you finding equipment and parts availability, lead times, and pricing at the moment? Is the ESG reporting expected to be ready by the 2022 annual results? Thank you.
Okay. I'll tackle the equipment and parts, and then I might hand to the team in London on the reporting framework and the ARPU assumptions. Look, equipment and parts, we reacted very quickly in 2020 on the parts side. We've got very well-stocked regional centers looking after our operations. The parts really continue to flow. We've had disruptions as there has been globally with supply chain, but nothing clearly as the numbers demonstrate that has had any meaningful bearing on the business. Not much to comment on the parts side. Equipment, look, availabilities are unequivocally moving out. Really, you know, if I look at, use an example, the previous peak cycle, I was choosing RC rig. At trough you could get one within three months.
Previous peak cycle took it up to 15 months. At the moment, to get an RC rig, you're now looking at about six months. Certainly lead times on equipment is pushing out. What we are doing, with the scale that Capital now has, we can obviously have arrangements with the OEMs, which includes putting deposits down, booking slots to make sure you've got that pipeline. That's that is unequivocally a challenge on the horizon, and unequivocally pushing lead times is starting to push out. We, we're comfortable we can manage that. I'll hand over to London for the ESG reporting and the ARPU, please.
Okay. Conor, do you want to take the ESG comment first of all?
Sure thing. We are reporting our Scope one and Scope two emissions, which will be in our annual report, which should be out in the next couple of hours, certainly today. I think the important thing to note with those emissions is we've done a very bottom-up exercise. Taking on board, you know, every engine that we operate ourselves, regardless of the fact that some in most cases, clients will give us the fuel as part of the contract. We've taken very full ownership of our emissions across the board. We'll continue to report that. We'll also work to set a target in terms of reductions through this year at some point.
Okay, thanks, Conor. In terms of the ARPU, so the ARPU for 2021 was $181 thousand. That is up from $171 thousand last year. We didn't include a slide this time in terms of the historic ARPU. That 181 is, you know, solidly towards the top end of the range. Clearly, the ARPU is also a blended mix of depending on the types of rigs that we bring in. You know, something in that sort of range, that 170-180 is probably a fair assumption.
Perfect. That's very helpful. Thank you very much.
The next question comes from Peter Mallin-Jones, Peel Hunt. Your line is now open. Please go ahead.
Good morning, gentlemen, and again, congratulations on some fairly spectacular numbers. I just had one quick question. Obviously, 2H cash costs were lower than perhaps I and others had anticipated. You sort of slightly touched on some of the reasons why that might be the case over lower maintenance costs and the like. I was just wondering, as we look into 2022, how we should start thinking about cost pressures impacting that very strong 2H margin, you know, be it fuel, energy, labor, parts availability, so on and so forth.
Thanks, Peter. I'll comment on part of it, and then I'll hand over to Conor in terms of margin guidance. Fuel often gets raised in questions, but frankly, predominantly, it's borne by the customer in most of our contracts. As a general rule of thumb, it's as a percentage of cost, as a percentage of our revenue, it's less than 5%. It's not something that will have a big impact. The biggest thing that we're gonna have to manage is labor inflation. Certainly it's been a massive factor in the developed markets, and particularly in my hometown of Perth in Western Australia, they've had huge labor shortages and wage inflation. The point that I'd bring to bear there is two big points.
That, you know, the bull market for us is 12 months old, whereas in a lot of places like Australia where they've had a low currency and therefore high local currency metal prices, they've been in a bull market for about five years. We've got a slightly different dynamic. In saying that, we're unequivocally getting wage inflation. We are managing that, particularly making a lot of it incentive-based. You know, look, we just have to manage that. We're also operating in a rising rate environment as well. Also a lot of our long-term contracts have rise and fall mechanisms built into them, which actually account for inflation-adjusted inputs into the cost assumptions on the contract. In terms of margin guidance, Conor, I might just hand to you.
I tell you what, Jamie, I might take a chance.
A chance. Yeah. Sorry.
Okay. Just building on what Jamie said, you know, we, the margins, particularly in the second half are, you know, pretty phenomenal. I do think that, you know, we unpacked that a little bit, so we've in terms of the. If we look at from an operational perspective and look at the gross profit margin, and particularly things like repairs and maintenance, I believe that we will come back into a more sort of steady state, repairs and maintenance in FY 2022. You might see a little bit of a reduction in margin, 2022 compared to 2021 on that side. Having said that, you know, I think that in terms of the overhead costs or admin costs, I think that, you know, we.
There was a big step up in that in 2021. I wouldn't anticipate much of a growth in the overhead rate H2 2021 compared to 2022. I think that again, obviously it also depends on the asset utilization. You know, as our fleet increases, the utilization may come down a little bit as well, which would also impact on margin.
Thank you very much.
Thank you. There are no further questions at this time. I hand back to you.
James, are we facing?
Thanks, Emma.
Yeah. Sorry, go James. Thank you.
No worries. No, thanks. Thanks for that, Jamie. Now, we've got a few questions from the webcast. The first is regarding the MSALABS labs, how big and far can this business get in the next three years? Sort of what kind of margins are you modeling? And then how much of this will be the relationship with Chrysos?
How big can it get is a really good question. We've previously, you know, been a little bit cautious in our outlook, really saying, "Oh, this could be a $50 million business." I think the momentum that it's gaining and the number of long-term mine site-based contracts it's signing to see this business triple its revenue from here, I think is very achievable. So, you know, 30 is the forecast for this year. To turn this into a $90 million business, I think it's achievable. I mean, certainly the bigger commodity laboratories in the world are turning over, I think, $500-$600 million. So MSA has got a fair way to grow on that trajectory. In terms of margins, we typically just sort of guide that they're broadly consistent with the broader business.
In terms of the growth, well, most of 2021's growth, and we did grow revenue by what? 75%, that was non-Chrysos related. We only commissioned our first Chrysos unit in October in Bulyanhulu. Even this year's, we'll get a full year contribution from Bulyanhulu this year. But what we also get this year is Morila, the mine site lab full year contribution, Bulyanhulu full year contribution, the lab at Thor Explorations in Nigeria full year contribution. Then we're commissioning Chrysos units in Q1 and Q2 in Canada and Morila. Look, Chrysos will become an increasingly important part of the growth driver, just due to the huge technological edge that it's providing over traditional fire assay.
The relationship is a very important one to the growth of the business.
Thanks, Jamie. Another question we've had, is there likely to be further working cap build to support revenue growth in 2022? Or is some reversal expected with mature contracts?
Giles, do you wanna field that one?
Yeah, sure. No, I don't think we would anticipate particularly working capital increase. I think, you know, based on the guidance that we've given, yeah, I think that a strong EBITDA to cash conversion would be anticipated.
Thanks, Giles. We've had another one in regards to the investment arm of the business. In terms of your investments, are they project finance instruments or equity ownerships at the parent company level?
Their equity ownership at the parent company level, typically, yeah.
Perfect. Then, one final one. Are there any plans for further buybacks, share buybacks? What would the criteria be for these?
Giles, I might let you answer that one as well, if you don't mind.
Yeah, sure. Look, I think that, you know, the share buyback was well received. I think that it may well be a lever that we use going forward, you know, particularly using it prudently. Predominantly though, we are focused on returning value to shareholders through our dividend payout. But it, I guess one might say, is relatively modest at a maximum of 20% of net operating profit after tax. Yeah, it's certainly something that we would look to use as and when it's opportune to do so.
Thanks, Giles. We've actually had one more come in. Is Chrysos technology being widely adopted among competitor labs? Will this lead to pricing pressure in this market?
It's being picked up by competitor labs, the big ones in the industry, SGS, ALS, Intertek. It's a technology that is being adopted. We're really first mover and we're absolutely first mover internationally outside of Australia. The rollout of Chrysos is probably in chapter one of a, you know, 15-chapter story. It's very early days. What it will do is disrupt traditional fire assay. I think we're miles away from it being a broadly embedded standard that will have pricing pressure attaching to it. I should also note that part of the transactions, you tend to get geographical protection. Like Chrysos don't want three units deployed within 500 meters of each other.
They're being strategic about rolling these units out, regionally, and globally.
Thanks, Jamie. There are no further questions from the webcast.
Very good. Well, I think that means it's back to me to conclude. Thank you everyone for dialing in. Thank you for the questions. With that, I'll sign off. Thank you very much.