EBITDA swung to $22.1m on a 1,000bps gross margin gain, but OCF fell 31.4%

Revenue grew 16.2% to $216.2m, gross margin expanded roughly 1,000bps to 23% (from 13%), and EBITDA reached $22.1m against an $11.6m EBITDA loss in FY20. NPAT recovered to $9.6m from a $17.3m loss, with PBT growth of 151.2% closely tracking NPAT growth of 155.5%.

Operating cash flow nonetheless fell 31.4% to $13.4m despite the EBITDA swing. Working capital absorbed $6.3m as operating working capital rose to $52.4m from $46.1m, mainly through a 17.3% lift in trade debtors to $27.5m.

The balance sheet strengthened: cash rose to $12.2m from $7.7m, and the group moved to a $1.3m net cash position from $3.4m net debt. A 4.0 cents final dividend takes full-year dividends to 6.0 cents per share, against nil in FY20.

1. Moving from 13% to 23% on a 16.2% larger revenue base is the central economic event of the result. EBITDA of $22.1m against a prior-year loss is largely a function of this margin reset rather than volume alone, which means the strategy is producing visible run-rate evidence rather than one-off recovery.

2. Cash conversion at 60.7% (OCF/EBITDA) sits well below the earnings recovery. For a project-based industrials business this matters because the gap is funded by a $6.3m working-capital absorption — mainly debtors — at a point when contract assets stand at $24.5m and contract liabilities at $22.7m. Accounting profit is being recognised faster than cash, which is consistent with a growth-phase project mix but warrants close tracking.

3. Australasia carried the result; Europe and North America de-weighted. Australasia revenue grew to $112.1m and now represents 51.8% of the group (from 38.4%), with a $17.5m segment result at a 15.7% gross margin. Europe shrank 19.9% to $54.0m at an 8.6% gross margin, the weakest segment, while North America fell to $37.2m. Group-level margin gains partially mask a sharper geographic story.

Comparing HY21 ($104.5m revenue, $11.2m EBITDA, $4.7m NPAT) against the full year implies a second half of $111.7m revenue, $10.9m EBITDA and $4.9m NPAT — modestly second-half-weighted on revenue but slightly first-half-weighted on EBITDA, indicating a flatter project-delivery profile than typically seen in this sector.

Without a forward-work disclosure or stated FY22 target, the release supports continuity of the FY21 margin shape but does not evidence acceleration. The investor read is whether the gross margin holds once segment mix normalises.

PBT growth (151.2%) and NPAT growth (155.5%) are materially in line — the small -4.3pp gap reflects a -20.6% current effective tax rate (a net tax benefit) against 25.4% prior. PBT is therefore the cleaner operating read, and it confirms the turnaround rather than relying on tax. FCF (pre-lease) of $8.9m and a 92.6% FCF/NPAT ratio look constructive at first inspection.

The qualifier sits on cash. OCF/EBITDA at 60.7% reflects a $6.3m working-capital build, and the prior-year ratio is not analytically usable as a comparison anchor given the negative EBITDA denominator. For a project-based industrials business this is timing-sensitive: contract assets of $24.5m against contract liabilities of $22.7m point to a roughly balanced milestone position, so the receivables increase is the swing factor. The 4.0 cents final dividend is covered by FCF pre-lease at a 52.7% payout, so capital return is funded from cash, not balance-sheet capacity.

This briefing cannot assess management's FY22 trading outlook, contracted backlog composition, or the durability of the gross margin uplift, because no forward-work figures or FY22 targets are provided in the supplied release context.