Mitchell Services (MSV) H2 2025 earnings summary

Executive summary

• FY 2025 was a transitional year with significant investment in new projects to offset reduced utilisation, but all major contracts expiring in FY 2025 were successfully re-won.

• Entering FY 2026, the business has completed major mobilisations, with new projects beginning to deliver returns and a focus on improving net profit after tax.

• Over 80% of revenue is from global mining majors, with a balanced split between surface and underground drilling.

• Gold accounts for over 45% of revenue, and 80% is from production, development, and resource definition drilling.

• Successful entry into PNG and completion of a decarbonisation project signal new growth opportunities.

Financial highlights

• Revenue reached $196.7m, up 17% from FY24, but EBITDA fell to $25.7m from $40.4m due to lower utilisation and mobilisation costs.

• Profit after tax was $0.5m, a 94% decrease from FY24.

• Net assets declined, reflecting a modest FY 2025 NPAT and a $4.3 million dividend payment related to FY 2024.

• Operating cash flow was $17.9m, down 58% from FY24, with a 70% EBITDA to cash conversion ratio.

• Gross debt reduced by 46% to $9.7m, the lowest since June 2015, and net debt has decreased significantly.

Outlook and guidance

• FY 2026 is expected to benefit from completed ramp-ups, with improved profitability and normalised working capital.

• Maintenance CapEx is anticipated to decrease, barring significant growth opportunities, particularly from the Loop JV.

• D&A is expected to stabilise and remain similar to FY 2025.

• Utilisation for Q1 FY 2026 is trending flat to slightly up compared to prior years.

• Shareholder returns are expected to recommence upon normalisation of business performance, likely via share buy-back.