Kelly Partners Group (KPG) H1 2025 earnings summary

Executive summary

• Revenue for 1H25 reached AUD 64.9 million, up 22.8% year-over-year, driven by 4.0% organic growth and 18.8% from acquisitions, with a team of 594 members and 104 partners across 38 businesses in four countries.

• Statutory net profit after tax from continuing operations rose 18.1% to AUD 8.7 million, with profit attributable to members up 36.5% to AUD 2.5 million.

• Underlying NPATA attributable to shareholders increased 12% to AUD 4.9 million, and free cash flow per share was 11.0cps with cash conversion at 103%.

• The business has doubled six times in 18 years, averaging a doubling every three years, driven by a unique partner-owner-driver model and significant global expansion, especially in the U.S.

• Dividend payments ceased in February 2024 to prioritize capital allocation for growth, with ongoing share buybacks and a US listing process underway.

Financial highlights

• Underlying EBITDA (pre AASB 16) rose 12.5% to AUD 18.2 million, with group operating EBITDA margin at 28.1% and Australian business margin at 31%.

• Statutory NPAT (Group) increased 18.1% to AUD 8.7 million; parent entity NPAT up 36.6% to AUD 2.5 million.

• Cash from operations increased 26.7% to AUD 14.5 million, and free cash flow to firm after debt reductions rose 18.5%.

• Net debt increased by AUD 10.3 million to AUD 55.5 million, mainly to fund four acquisitions and partner loans, with gearing ratio at 1.49x.

• Owners' earnings for the group increased 26.2% to AUD 14.0 million.

Outlook and guidance

• Focus remains on programmatic acquisitions and organic growth, with additional investment of AUD 0.8 million (1.3% of revenue) to support future expansion.

• US listing process underway, with a 12-month timetable for SEC and ASX scheme processes.

• Targeted EBITA margin is 32.5%, reflecting increased depreciation from office fitouts.

• Organic growth expected at 3%-5%, with a long-term average of 6% after adjusting for client rationalization.

• Continued disciplined approach to acquisitions and partner recruitment to drive future growth.