PPC (PPC) H2 2025 earnings summary

Executive summary

• FY2025 marked the first full year under new leadership, with a strategic turnaround plan delivering early and sustainable operational improvements, including the "Awaken the Giant" strategy.

• Delivered results ahead of plan for the year ended 31 March 2025, with strong margin, profitability, and cash improvements.

• Organisational changes and turnaround initiatives led to improved performance in a flat market, launching a platform for long-term growth.

• The company shifted from a period of underperformance to a trajectory of growth, focusing on competitiveness, efficiency, and a performance-driven culture.

• Significant progress was made in cash generation, asset utilization, and organizational restructuring, with a focus on core business drivers and operational best practices.

Financial highlights

• Group EBITDA grew 28% to ZAR 1.593 billion, with EBITDA margin up 3.8 percentage points to 16.1%.

• Free cash flow from continuing operations rose to ZAR 1.049 billion (FY24: ZAR 260 million).

• Headline earnings per share increased to 17.6 cents (FY24: 13.7 cents).

• Ordinary dividend payment resumed in South Africa for the first time since 2016; total ordinary dividend to shareholders was ZAR 274 million or 17.6 cents per share.

• CapEx spend was ZAR 373 million, mainly for maintenance; FY2026 CapEx budgeted at ZAR 450 million plus ZAR 1.18 billion for the new plant.

Outlook and guidance

• The turnaround plan is expected to deliver incremental improvements through FY2027, with a step change anticipated from FY2028 as new projects come online.

• EBITDA margin targeted above 17% by FY2027, with potential to exceed 21% by FY2028 if market conditions improve.

• ROIC improved to 10.6% (FY24: 6.5%) and is expected to surpass WACC by FY2028, driven by disciplined capital allocation and efficiency projects.

• Plans are based on a scenario of low to no growth in demand, but the company is positioned to capture opportunities if the construction cycle turns.

• Capital allocation discipline and balance sheet management to be maintained, especially with higher CAPEX for RK3 investment.