Kelly Partners Group (KPG) H2 2024 earnings summary

Executive summary

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

• Underlying NPATA attributable to shareholders rose 52.3% to $8.0 million, with underlying EBITDA up 53.1% to $30.0 million.

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

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

• Dividend payments ceased in February 2024 to prioritize capital allocation for growth opportunities.

Financial highlights

• Revenue: $108.1m (+29.2% YoY); underlying EBITDA: $30.0m (+53.1% YoY); EBITDA margin: 27.8%.

• Underlying NPATA: $8.0m (+52.3% YoY); statutory NPAT: $13.5m (+24.2% YoY).

• Cash from operations: $20.2m (+30.7% YoY); free cash flow to firm: $11.4m (+44.1% YoY); cash conversion ratio: 96.9%.

• Net debt increased to $45.2m, mainly to fund acquisitions; net debt/EBITDA reduced to 1.28x.

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

Outlook and guidance

• FY25 revenue run rate expected to reach ~$130m, including full-year contribution from recent US acquisitions.

• 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.

• Margins are expected to remain robust, with a 10% NPAT conversion target over five-year periods.