Trajan Group (TRJ) H2 2024 earnings summary

Executive summary

• FY 2024 revenue was AUD 155 million, within guidance, with underlying/Core nEBITDA of AUD 17.2 million, exceeding the top end of guidance, and consolidated EBITDA more than doubled from H1 to H2.

• Net revenue finished within 5% of the prior year, reflecting resilience despite industry-wide destocking in H1 and pharmaceutical sector slowdown in H2; H2 saw a return to growth and improved cost management.

• Commercialisation in Disruptive Technologies progressed, with microsampling demand up ~30% in H2 and breakeven nEBITDA targeted for FY25.

• Net debt reduced by over AUD 4.7 million, strengthening the balance sheet and returning the net debt to EBITDA ratio to the target range of 2:1.

• Statutory EBITDA was impacted by a non-cash impairment of AUD 26.7 million on intangible assets.

Financial highlights

• Net revenue for FY24 was AUD 155 million, down 4.4% year-over-year, with declines across all segments; H2 revenue up 2.9% sequentially from H1.

• Core/normalized nEBITDA was AUD 17.2 million (FY23: AUD 23.9 million), exceeding guidance.

• Pro forma gross margin for FY24 was 41.1%, with H2 margin improving to 42.6%.

• Operating NPATA was AUD 0.6 million (FY23: AUD 5.8 million); free cash flow improved to AUD 9.9 million.

• Cash balance at June 2024 was AUD 11.2 million; net debt reduced by AUD 4.7 million to AUD 32.9 million.

Outlook and guidance

• FY25 revenue expected to exceed AUD 160 million, with group nEBITDA forecasted at AUD 17–19 million, consolidating all segments.

• Components & Consumables expected to resume historical growth; Capital Equipment to remain soft in H1 FY25, with recovery anticipated in CY25.

• Disruptive Technologies (microsampling) targeted to reach nEBITDA breakeven, with only a AUD 1 million investment/loss projected.

• Pro forma gross margin anticipated to return to a growth trend as stocking/destocking cycles subside.

• Continued focus on balance sheet strength and launch of Project Neptune Phase 2 for automation and sustainability.