Kelly Partners Group (KPG) H2 2024 earnings summary

Executive summary

• FY2024 revenue reached AUD 108.1 million, up 29.2% year-over-year, driven by organic growth and acquisitions.

• Underlying NPATA attributable to shareholders rose 52.3% to AUD 8 million, with underlying EBITDA up 53.1% to AUD 30 million.

• EBITDA margin improved to 27.8% (29.6% excluding parent investments), up from 22.7% last year.

• Group ROE reached 40.7% and ROIC improved to 24.8%, reflecting strong profitability and capital efficiency.

• The group expanded to 35 office locations across 4 countries, with US operations now contributing up to 15.2% of group revenue.

Financial highlights

• Operating expenses increased at a slower rate than revenue, supporting margin expansion.

• Net debt increased 13.1% to AUD 45.2 million, mainly to fund acquisitions, but net debt to underlying EBITDA decreased to 1.28x.

• Cash from operations was AUD 20.2 million, up 30.7%; free cash flow rose 44.1% with a 96.9% cash conversion rate.

• Earnings per share (underlying NPATA): 17.84c (+48.6% YoY); owner earnings per share: 17.44c.

• Return on equity (ROE) was 40.6%; group ROIC at 24.8%.

Outlook and guidance

• Management expects continued strong growth, with a focus on sustainable, long-term compounding.

• US expansion is progressing rapidly, reaching AUD 20 million revenue in 18 months.

• Targeting further EBITDA margin expansion to 35% over time.

• Focus on programmatic and opportunistic acquisitions, especially in the US, to drive future growth.

• Strategy to become a top 10 accounting firm in Australia and expand global presence.