Capital (CAPD) H1 2024 earnings summary

Executive summary

• Revenue grew 9.8% year-over-year to $169.4m in H1 2024, driven by contract extensions, new contracts, and MSALABS growth, with expansion in North America and Africa.

• Adjusted EBITDA was $42.9m with a 25.3% margin, slightly down year-over-year due to ramp-up costs and investments in new regions.

• Net profit after tax fell 45.5% to $9.6m, impacted by higher interest and tax expenses.

• Major contracts in Nevada, Zambia, Tanzania, Gabon, and Egypt are ramping up, with significant investments in new geographies and technologies.

• Interim dividend of 1.3 cents per share declared, unchanged from last year, with a continued focus on shareholder returns and growth.

Financial highlights

• Revenue: $169.4m (up 9.8% year-over-year); adjusted EBITDA: $42.9m, margin 25.3% (down from 28.5%).

• EBIT (pre-exceptional): $26.6m, down 6.3% year-over-year; adjusted NPAT: $11.8m, down 29.8%.

• Net debt: $86.4m at June 2024, mainly to fund new contracts in the USA; net debt/EBITDA: 0.95x (pro forma 0.61x post-Predictive sale).

• Capex in H1 2024: $44.3m; full-year guidance $70–$80m.

• Working capital inflow of $8m in H1, with elevated accounts payable due to U.S. investment.

Outlook and guidance

• 2024 revenue guidance maintained at $355–$375m; MSALABS: $50–$60m; capex guidance at $70–$80m.

• Adjusted EBITDA margin expected at the lower end of 25–30% due to business mix shift and Sukari contract wind-down.

• H2 2024 revenue growth anticipated from ramp-up at Nevada Gold Mines, Belinga, and new contracts at Lumwana and Nyanzaga.

• Labs business targeted to reach 15–20% adjusted EBITDA margin by next year.

• Proceeds from Predictive share sale will be used to reduce debt, strengthening the balance sheet.