Normalised revenue up 13%, EBITDA up 23.8% as net debt/EBITDA falls to 1.4x

On a normalised basis the underlying revenue line grew roughly 13%, which is the more meaningful read.

EBITDA rose 23.8% to $25.6m and operating cash flow jumped 75% to $20.7m. Capex eased to $12.8m, taking free cash flow to a near-breakeven $0.2m outflow versus a $2m outflow a year earlier. Net debt fell to $36m from $44m, so net debt to EBITDA dropped to 1.4x from 2.1x.

The earnings line moved the other way. PBT loss widened 33.3% to $4.3m and NPAT swung from a $0.6m profit to a $1.2m loss, a -200.0% move. Cash sits at $17m, up from $4m.

Once the HY23 acquisition revenue credit is removed, the underlying business grew about 13% and EBITDA grew 23.8% on top of that. Operating cash conversion (OCF/EBITDA) lifted to 80.8% from 57.1%, so the EBITDA expansion is showing up in cash rather than only on paper. This matters because it is the first clean period since the Coretex deal where post-merger cash economics can be read without the accounting overlay.

• Net debt to EBITDA falling to 1.4x from 2.1x materially improves financial flexibility. The deleveraging is being driven by stronger operating cash flow and steady capex discipline (capex/revenue 14.6% versus 16.5%), not asset disposals or equity. This matters for the company's ability to keep investing in the integrated platform without further drawing on debt.

• The NPAT swing to a $1.2m loss is mostly tax-driven rather than operating. PBT widened 33.3% on higher depreciation, amortisation and interest from the merger, but the gap between PBT growth (-33.3%) and NPAT growth (-200.0%) of 166.7pp reflects a smaller tax credit this period (effective rate 75.0% versus 100.0% prior). The cleaner operating read is PBT.

The shape context shows HY23 was 50.9% of FY23 revenue and 57.8% of FY23 EBITDA, so first-half weighting on EBITDA is modest and there is no implied second-half drop-off built into normal phasing.

Annualising the HY24 result gives roughly $178m of revenue, ahead of FY23's $174.9m reported and the $165.3m normalised base. Whether that pace holds depends on commentary on forward work and pipeline that is not in the supplied excerpts, which means the read on full-year delivery is light at this stage.

Operating cash flow growth of 75% outpaced EBITDA growth of 23.8%, so cash conversion is the genuine source of strength rather than an accounting boost. Capex fell in absolute terms even as revenue grew, which suggests post-merger investment intensity is normalising rather than being deferred — capex/revenue 14.6% is below the prior period's 16.5%.

The main quality caveat is working capital. Receivable days stretched to 70.4 from 58.2, a 12-day extension. The cash result still came through strongly, which implies other working capital lines (likely contract liabilities at $22m and payables timing) absorbed the receivables drag this period. That offset may not repeat, so debtor extension is a forward cash watch item rather than an immediate problem.

The NPAT loss should be discounted against the cash and EBITDA improvement: it reflects merger-related D&A and interest plus tax-credit timing, not a deterioration in trading. ROE of -0.4% versus 0.4% is too small to anchor a return story until the bottom line clears post-merger amortisation.

This briefing cannot assess forward work, pipeline conversion or any management guidance for FY24, because none is provided in the supplied release materials.