Wagners Holding Company (WGN) H2 2024 earnings summary

Executive summary

• FY24 group revenue reached $481.4 million, up 1% year-over-year, with operating EBIT of $39.7 million, an 81% increase over FY23, exceeding guidance and driven by strong Construction Materials & Services performance.

• Net profit after tax was $10.3 million, up 229% compared to FY23, and gross profit rose 17% to $140.5 million.

• Significant debt reduction achieved, with net debt down 49% to $47.6 million as of June 2024.

• A final fully franked dividend of 2.5 cents per share was declared, the first since 2018.

• Improved market conditions in Construction Materials and Services, with strong Q4 performance and expansion of the SE Queensland concrete plant network.

Financial highlights

• Operating EBIT margin improved to 8.2% from 4.6% in FY23; gross margin increased to 29.2% from 25.2%.

• Operating EBITDA was $66.8 million, up from $50.0 million in FY23.

• Cash flow from operations increased to $72.6 million, up $55.8 million from FY23, driven by stronger earnings and working capital release.

• Capital expenditure rose to $23.9 million, focused on plant upgrades, expansion, and efficiency improvements.

• Total impairments of $8.8 million recognized, including $5.6 million for Earth Friendly Concrete and $3.2 million for Wacol facility.

Outlook and guidance

• Medium-term outlook expects continued strong demand for core products, supported by a robust order book and long-term contracts.

• FY25 is expected to see increased concrete volumes and growth in the steel business, with new plant investments driving capacity and efficiency.

• No major precast project will replace the Sydney Metro project in FY25, impacting earnings, but new long-term contracts in composites are secured.

• Margins in composites are expected to improve, with a focus on automation and efficiency.

• Project Services anticipates limited new project opportunities in FY25, with focus on bulk haulage and exiting the Wacol facility.