Austin Engineering (ANG) Trading update summary

Trading and Guidance Update

• Revenue for May and June is shifting into the next financial year due to schedule drift, mainly in North and South America, with AUD 8 million in North America and AUD 10 million in South America affected.

• APAC is also experiencing a minor revenue drift of about AUD 2 million, mostly due to timing and accounting recognition rules.

• FY26 revenue guidance lowered to approximately $325 million from over $350 million, and EBIT guidance revised to $10–11 million, both excluding FX movements.

• Revenue and EBIT reductions are attributed to operational challenges in North and South America and deferred product deliveries to FY27.

• Trading conditions improved in May and June 2026, but operational improvements progressed slower than planned.

Regional Performance and Operational Improvements

• North America productivity improved to 83% in recent months, but margins are impacted by a less profitable contract dominating volumes.

• South America’s order book is robust, with a major OEM contract renegotiated at a 30% price increase, but revenue recognition will occur in the next financial year.

• APAC operations, mainly Australia and Indonesia, continue to meet expectations, with Indonesia at capacity and strong order books for the next six months.

• Additional operational expertise and senior management have been deployed to Chile for process improvements, with a senior manager stationed there for two months.

• Operational improvements focus on planning, scheduling, and standardizing work instructions, with ongoing efforts to embed these changes, especially in Chile.

Financial Position and Outlook

• The balance sheet is stable, with refinancing discussions underway for later in the year and positive engagement with bankers.

• Free cash flow remains positive, supported by improved inventory management and upfront client payments, especially in Asia Pacific.

• FY2024 is expected to be profitable, with EBIT guidance of AUD 10–11 million.

• Both North and South America are expected to be profitable in the next six months, with Chile’s profitability supported by the new OEM contract.

• Margin improvements in North America are evident, with gross margin on a key contract rising from 9% to 18% due to operational enhancements.