INTERIM FINANCIAL REPORT
31 December 2024
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Tasmea Limited Review of operations 31 December 2024
Review of operations
On behalf of the Board of Tasmea Limited ("Tasmea" or "the Group"), we are pleased to present the Tasmea Interim Financial Report for the period ended 31 December 2024.
31 Dec 2024 | 31 Dec 2023 | Change | Change | |||||||||
Results Summary | $'000 | $'000 | $'000 | % | ||||||||
Revenue | 246,651 | 193,318 | 53,333 | 27.6% | ||||||||
Gross Profit | 75,118 | 56,168 | 18,950 | 33.7% | ||||||||
Earnings before interest, tax, depreciation and amortisation | ||||||||||||
(EBITDA) | 42,393 | 31,041 | 11,352 | 36.6% | ||||||||
Operating profit before finance costs (EBIT) | 35,642 | 24,809 | 10,833 | 43.7% | ||||||||
Finance costs (net) | (3,891) | (2,321) | (1,570) | 67.6% | ||||||||
Profit before income tax expense | 31,751 | 22,488 | 9,263 | 41.2% | ||||||||
Income tax expense | (3,886) | (6,706) | 2,820 | (42.1%) | ||||||||
Profit after income tax expense for the half year (NPAT) | 27,865 | 15,782 | 12,083 | 76.6% | ||||||||
Cash generated from operations | 33,390 | 26,247 | 7,143 | 27.2% |
Financial results
Revenue: Our total revenue for the half year was $246.7 million, representing a 27.6% increase from the prior year comparative period. This growth was primarily driven by strong performance in our core sectors-mining, resources, energy, and infrastructure and as a consequence of the integration of recent acquisitions for part of the half year.
EBIT: Tasmea's EBIT for the half year was $35.6 million, reflecting a 43.7% increase from the prior year comparative period. The EBIT margin of 14.5% was driven principally by the highly specialised and critical services we provide to our blue-chip fixed plant customers. Our focus on delivering high-value, essential specialist services has enabled us to achieve this exceptional level of profitability, even in a competitive market environment.
Net Profit: Tasmea's net profit after tax (NPAT) for the half year was $27.9 million, reflecting a 76.6% increase from prior year NPAT. This was driven by revenue growth, efficient cost management, the positive impact of our acquisitions and the recognition of a deferred tax asset in respect of carried forward tax losses, previously off balance sheet, given the certainty of their realisation.
Operating Cash Flow Conversion: Tasmea achieved a high Operating Cash Flow before interest and tax conversion to EBIT rate of 93.7% for the half year. This strong conversion rate is attributed to our business model, where the majority of work is conducted on a schedule of rates with a maintenance focus, allowing us to invoice regularly for work completed each month.
The Group's trading results reflect the ongoing strategic focus on recurring revenue generated from providing specialist maintenance, shutdown and skilled labour services to "Essential Industry" asset owners. The year on year growth is driven by a combination of growth by acquisition and the scaling up (organic growth) of those businesses.
Financial position
The Group's financial position has significantly improved during the year, on the back of the strong financial performance, cash collection and debt repayments.
At 31 December 2024, net debt excluding property leases was $83.8 million. Net debt has increased due to the $50 million loan drawdown for the purchase of Future Engineering Group.
At 31 December 2024, Tasmea's net debt to last twelve months EBIT ratio is 1.1x. The Group has increased its borrowings to enable investment in new businesses in this half.
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Tasmea Limited Review of operations 31 December 2024
Business acquisitions
The Group acquired West Coast Lining Systems (August 2024) and Future Engineering Group (September 2024) during the first quarter. These acquisitions were specifically targeted to increase the Group's specialist service offerings in the Electrical, Mechanical and Water & Fluid services cash generating units. The acquisitions have been successfully integrated into the Group.
Dividends
Reflecting our strong financial performance, on 24 February 2025 the Tasmea Board declared a fully franked interim dividend of 5.0 cents per share (up from 2.5 cents per share in the prior comparative period). The dividend will be paid on 15 May 2025, with the date for determining entitlements being 30 April 2025.
All Australian and New Zealand resident Tasmea shareholders are eligible to participate in the Dividend Reinvestment Plan (DRP) for shares held on the relevant dividend record date. The Tasmea Executive Directors have confirmed their intention to participate in the DRP for the interim dividend.
People
The Group's subsidiaries have managed their direct and indirect employment levels in line with project demands. Recruitment efforts have enabled headcount to increase by 14.3% since the last financial year, primarily due to the employees transferred from recent acquisitions. Tasmea's skilled workforce now totals in excess of 1,600 employees. The Group has invested in developing our leadership team and service delivery teams, to ensure they have the skills required to deliver on our growth strategy.
Safety and care
Safety remains a key focus for the Group.
Tasmea management and employees share a mutual responsibility to deliver work in a manner which does not harm either the employee or those who work alongside them. The Group's subsidiary employees maintained their attention to this essential obligation last financial year and once again we are proud to announce there have been no lost time injury's during the period with the Group extending its overall LTI free record to now more than 4,200+ days.
Tasmea subsidiaries maintained their workers' compensation self-insurance status for its South Australian operations.
Exceptional skill and service
Tasmea subsidiaries continue to foster essential skills and harness innovation and experience within their niche service lines. Acquisition opportunities are strategic with a strong bias towards remote maintenance and recurring services to essential asset owners. Tasmea continues to achieve high levels of customer satisfaction and maintains a strong pipeline of recurring work delivered via Master Service Agreements and Facility Agreements.
Systems and processes
A continuous improvement focus has been applied to the back office and the Group has invested in system upgrades, system rollouts and integration of business acquisitions. Significant improvement has been made in the current year, which will continue through to the end of financial year.
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Tasmea Limited Review of operations 31 December 2024
Outlook for the second half of FY25
Tasmea is strategically positioned for continued growth in the second half and has upgraded statutory NPAT guidance $52 million (after allowing for the forecast expenditure in the second half related to the Employee Share Ownership Plan, Long Term Incentive Plan and Option Incentive Plan) up from $48 million previously provided at the Company's Annual General Meeting held in November 2024.
The Group's integration of its largest acquisition Future Engineering Group remains ahead of plan. The outlook for key commodities across iron ore, copper, and gold remains sound with large iron ore miners looking to maintain or increase volumes. The energy transition and electrification thematic continues to provide significant opportunities for Tasmea's Electrical Segment subsidiaries as well as a number of Tasmea's Mechanical and Civil Segment subsidiaries.
Tasmea is progressing several programmatic strategic business acquisition opportunities which, if completed, will be earnings accretive from the date of acquisition, consistent with prior acquisitions.
On behalf of the Board, we thank our customers, suppliers and employees, who have contributed to the continued success of the Group.
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Tasmea Limited
Contents
31 December 2024
Directors' report | 5 |
Auditor's independence declaration | 7 |
Consolidated statement of profit or loss and other comprehensive income | 8 |
Consolidated statement of financial position | 9 |
Consolidated statement of changes in equity | 10 |
Consolidated statement of cash flows | 11 |
Notes to the consolidated financial statements | 12 |
Directors' declaration | 33 |
Independent auditor's review report to the members of Tasmea Limited | 34 |
General information
The financial statements cover Tasmea Limited as a consolidated entity consisting of Tasmea Limited and the entities it controlled at the end of, or during, the half-year. The financial statements are presented in Australian dollars, which is Tasmea Limited's functional and presentation currency.
Tasmea Limited is a listed public company limited by shares, incorporated and domiciled in Australia.
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors' report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 24 February 2025. The directors do not have the power to amend and reissue the financial statements.
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Tasmea Limited Directors' report 31 December 2024
The directors of Tasmea Limited present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity' or 'Group') consisting of Tasmea Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the half-year ended 31 December 2024.
Directors
The following persons were directors of Tasmea Limited during the whole of the financial half-year and up to the date of this report, unless otherwise stated:
Mr Giuseppe Totaro | Non-executive Director and Chairman |
Mr Michael Terlet | Non-executive Director |
Ms Kristie Young | Non-executive Director |
Mr Stephen Young | Managing Director |
Mr Mark Vartuli | Executive Director |
Mr Jason Pryde | Executive Director |
Mr Trent Northover | Executive Director (appointed 3 February 2025) |
Principal activities
During the financial half-year the principal continuing activities of the consolidated entity consisted of the provision of engineering and maintenance services to the following industries:
- Mining and resources industry;
- Oil and gas industry;
- Water industry;
- Defence and infrastructure industry; and
- Power and renewable energy industry.
Review of operations
The profit for the consolidated entity after providing for income tax and non-controlling interest amounted to $27,813,000 (31 December 2023: $15,782,000).
Further information regarding the Group's results and operations during the half year is included in the review of operations on pages 1-2 of the Interim Financial Report.
Dividends | |||
31 Dec 2024 | 31 Dec 2023 | ||
Dividends paid during the half-year were as follows: | $'000 | $'000 | |
Final dividend for the year ended 30 June 2024 of 4.0 cents per ordinary share | |||
(30 June 2023 Final Dividend 2.0 cents) | 9,081 | 3,912 | |
Tasmea has a Dividend Reinvestment (DRP) which enables all shareholders to elect to have all or some of their dividend reinvested in additional Tasmea shares. The DRP was applicable for the FY24 Final Dividend.
Matters subsequent to the end of the financial half-year
On 23 January 2025, Tasmea Limited issued an additional 100,000 ordinary shares, with a fair value of $295,000, to a senior employee who has elected to salary sacrifice for ordinary shares in the company.
On 3 February 2025, Trent Northover was appointed to the Board of Tasmea Limited as an Executive Director.
On 24 February 2025 the Tasmea Board declared an interim fully franked dividend of 5.0 cents per share (up from 2.5 cents per share in the prior comparative period). The dividend will be paid on 15 May 2025, with the date for determining entitlements being 30 April 2025.
No other matter or circumstance has arisen since 31 December 2024 that has significantly affected, or may significantly affect the consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial years.
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Tasmea Limited Directors' report 31 December 2024
Rounding of amounts
The company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.
This report is made in accordance with a resolution of directors, pursuant to section 306(3)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________ | ___________________________ |
Stephen E Young | Mark G Vartuli |
Managing Director | Executive Director |
24 February 2025 |
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Tasmea Limited
Consolidated statement of profit or loss and other comprehensive income
For the half-year ended 31 December 2024
Note | 31 Dec 2024 | 31 Dec 2023 | ||
$'000 | $'000 | |||
Revenue | ||||
Revenue from contracts with customers | 5 | 246,651 | 193,318 | |
Cost of sales | 7 | (171,533) | (137,150) | |
Gross profit | 75,118 | 56,168 | ||
Other income | 6 | 5,634 | 1,218 | |
Expenses | ||||
Administrative expenses | (38,359) | (26,345) | ||
Depreciation and amortisation expense | (6,751) | (6,232) | ||
Operating profit before finance costs | 35,642 | 24,809 | ||
Finance costs(net) | (3,891) | (2,321) | ||
Profit before income tax expense | 31,751 | 22,488 | ||
Income tax expense | 8 | (3,886) | (6,706) | |
Profit after income tax expense for the half-year | 27,865 | 15,782 | ||
Other comprehensive income for the half-year, net of tax | - | - | ||
Total comprehensive income for the half-year | 27,865 | 15,782 | ||
Profit for the half-year is attributable to: | ||||
Non-controlling interest | 52 | - | ||
Owners of Tasmea Limited | 27,813 | 15,782 | ||
27,865 | 15,782 | |||
Total comprehensive income for the half-year is attributable to: | ||||
Non-controlling interest | 52 | - | ||
Owners of Tasmea Limited | 27,813 | 15,782 | ||
27,865 | 15,782 | |||
Cents | Cents | |||
Basic earnings per share | 27 | 12.32 | 8.07 | |
Diluted earnings per share | 27 | 12.32 | 8.07 |
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes
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Tasmea Limited
Consolidated statement of financial position
As at 31 December 2024
Note | 31 Dec 2024 30 June 2024 | |||||
Assets | $'000 | $'000 | ||||
Current assets | ||||||
Cash and cash equivalents | 9 | 26,411 | 25,125 | |||
Trade and other receivables | 10 | 54,954 | 53,911 | |||
Contract assets | 5 | 27,803 | 32,737 | |||
Inventories | 11 | 18,465 | 15,421 | |||
Other assets | 12 | 5,693 | 5,113 | |||
133,326 | 132,307 | |||||
Non-current assets classified as held for sale | 13 | 790 | 790 | |||
Total current assets | 134,116 | 133,097 | ||||
Non-current assets | ||||||
Right-of-use assets | 14 | 6,887 | 6,889 | |||
Property, plant and equipment | 15 | 69,874 | 57,613 | |||
Intangible assets | 16 | 170,917 | 89,394 | |||
Deferred tax asset | 8 | 6,924 | 3,113 | |||
Other assets | 12 | 391 | 759 | |||
Total non-current assets | 254,993 | 157,768 | ||||
Total assets | 389,109 | 290,865 | ||||
Liabilities | ||||||
Current liabilities | ||||||
Trade and other payables | 17 | 42,810 | 57,896 | |||
Contract liabilities | 5 | 7,019 | 4,920 | |||
Lease liabilities | 18 | 2,983 | 3,189 | |||
Borrowings | 19 | 21,575 | 21,614 | |||
Derivative financial instruments | 20 | 1,192 | - | |||
Provision for income tax | 16,636 | 14,066 | ||||
Provision for employee benefits | 21 | 12,018 | 10,794 | |||
Other provisions | 22 | 8,511 | 1,850 | |||
Total current liabilities | 112,744 | 114,329 | ||||
Non-current liabilities | ||||||
Lease liabilities | 18 | 3,608 | 4,141 | |||
Borrowings | 19 | 88,641 | 36,728 | |||
Provision for employee benefits | 21 | 628 | 627 | |||
Other provisions | 22 | 14,919 | 3,683 | |||
Total non-current liabilities | 107,796 | 45,179 | ||||
Total liabilities | 220,540 | 159,508 | ||||
Net assets | 168,569 | 131,357 | ||||
Equity | ||||||
Issued capital | 24 | 140,132 | 121,795 | |||
Reserves | 25 | 91 | - | |||
Retained profits | 28,170 | 9,438 | ||||
Equity attributable to the owners of Tasmea Limited | 168,393 | 131,233 | ||||
Non-controlling interest | 176 | 124 | ||||
Total equity | 168,569 | 131,357 | ||||
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
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