Duratec (DUR) H2 2024 earnings summary

Executive summary

• Achieved record FY24 revenue of $555.8m, up 13% year-over-year, with strong growth in Mining & Industrial and Building & Facade segments; EBITDA rose 22.6% to $47.6m and NPAT increased 11.6% to $21.4m.

• Gross profit margin improved to 17.3% from 16.7% in FY23, reflecting operational efficiency.

• Order book at $405m, tenders at $1.4b, and pipeline at $3.8b, supporting future growth.

• Strong cash position of $65.2m and cash conversion rate of 84% in FY24.

• Annuity style contracts contributed $145.8m, representing 26% of revenue.

Financial highlights

• Revenue grew 13% to $555.8m; NPAT up 11.6% to $21.4m; normalised EBITDA $47.6m, up 22.6%.

• Gross margin improved to 17.3% (from 16.7%); normalised EBITDA margin rose to 8.6%.

• EPS increased to 8.66¢ from 7.91¢ in FY23; fully franked dividend of 4.0¢ per share declared.

• Net assets increased 28.3% to $59.1m; cash at year-end $65.2m.

• Strong cash conversion at 84%; $27.3m net operating cash flow.

Outlook and guidance

• Solid revenue growth anticipated in 1H FY25, with medium-sized project win rate more than doubling in 2H FY24.

• Large projects and increasing MSA works to drive FY25 revenue; strong order book and tender pipeline.

• Defence sector opportunities expected to increase, with $8b spend at Garden Island Stirling base and further prospects in the Pacific.

• Medium to long-term outlook supported by $8b infrastructure investment in WA and strong tailwinds in Mining, Energy, and Building Maintenance.

• Funded for future growth with potential for strategic acquisitions.