COSOL (COS) investor relations material

Executive summary

• Revenue declined 14.1% year-over-year to $49.6m in H1 FY26, ending a previously strong growth trajectory due to decreased economic activity, contract losses, and subdued demand in natural resources and mining sectors.

• Underlying EBITDA dropped 57% to $3.5m, reflecting lower demand, restructuring costs, and investment in Americas sales.

• Major contract losses, underutilization of staff, and delayed project starts were key drivers of the downturn.

• Leadership roles were expanded, operational reset and restructuring implemented, with cost reductions (~$1m annualized from H2) and a renewed focus on sales and operational integration.

• Early signs of stabilization and recovery are emerging, supported by new US managed services contracts, SaaS ARR growth, and accelerated integration of Toustone AI/data business.

Financial highlights

• Revenue: $49.6m (down from $57.8m year-over-year); Asset Management Services revenue declined 26% to AUD 5.7m/$15.9m, mainly due to weaker coal sector demand.

• Gross margin compressed to 28.8% from 31.5%; underlying EBITDA margin fell to 7.1% from 14.1%.

• Underlying NPATA dropped 73.9% to $1.3m; underlying EPS NPATA fell 85.2% to 0.70 cents.

• Cash position stable at $6m; operating cash flow (excluding interest and tax) up 294% to $7.7m due to improved debtor collection.

• Net debt reduced by $5.9m to $20.7m, with $14.3m available headroom in the Westpac facility.

Outlook and guidance

• Revenue and earnings are expected to grow in the second half, with improved utilization, new contract wins, and cost discipline underpinning the outlook.

• Managed Services is projected to achieve 10% annualized growth in 2027, with margins approaching 40%.

• Continued investment in digital and data services, especially in public infrastructure and Americas markets.

• Further guidance will be provided in early Q4 as momentum builds.