Mader Group Aktie

Goodbye, and welcome to the Made Group half year results announcement. If you would like to ask a question today via the webcast, please enter into the Ask Question box and click submit. I'd now like to hand the conference over to Mr. Justin Norwich, Executive Director and Chief Executive Officer. Please go ahead.

Thanks very much, Darcy, and good morning, everyone, and welcome to MadaGroup's FY '26 Half Year Results Presentation. Thanks for joining us this morning. And Jody this morning is our Chief Financial Officer, Paul Egoli. All right. Let's get underway. So with the first half of FY '26 completed, we're proud to have delivered a record half year revenue of $485.2 million, an increase of 18% compared to the first half of FY '25. This result positions us well as we enter the second half of FY '26 and approach our target of $1 billion of annual revenue.

These results are a testament to the alignment, hard work and dedication of the Meda team which has positioned the business well to successfully close out the final year of its 5-year strategic plan. This strategic plan has been a blueprint for our business to deliver continued growth and diversification of revenue base for the last 4.5 years.

We enter the final 6 months with confidence that we'll deliver to plan and lay a solid foundation for what lies ahead. I'd like to extend my gratitude to the entire Meta team for their commitment and determination that they have demonstrated day in and day out. Okay, with that said, let's jump into it. For those unfamiliar with our duty, Meda was founded 20-plus years ago in 2005 by our Executive Chairman, like mad, identifying an underserviced niche in the industry, Luke started providing flexible maintenance solutions to customers with a youth or truck for our North American listeners, some tools and a vision.

Today, that vision has led made to become a global business, delivering technical services across multiple industries and service lines in 10 countries backed by a team of more than 4,100 specialists around the world, we proudly support over 490 customers in more than 685 locations.

As you can see, we have successfully evolved into a truly global diversified company with our unique business model replicated across multiple industries and service lines across the world. By launching fully organic start-ups in new markets, expanding geographically and broadening our suite of trades, we have delivered an impressive average compounding annual growth rate of circa 30% over the last 10 years.

As I mentioned earlier, this achievement would not have been possible without the hard work and dedication of the major team. This leads me to our next slide, a snapshot of our specialized workforce. From the start, a core part of Luke's vision are made up was to build a workforce where people not only have pride in what they do, but they get the job done while working alongside their mates.

This idea has grown from 1 mechanic into a global business comprised of a highly skilled team technicians, all with diverse and specialized skill sets. This includes heavy mobile equipment technicians, auto and high-voltage electricians, road transport and light vehicle mechanics. Fixed plant trades, welding and fabrication, energy specialists, rail and rolling stock experts and so much more.

And while we strive to build meaningful careers for people at any stage of life, as you can see on the screen, more than half of our workforce is under the age of 35, which unfortunately rules Paul and I added that back at these days. This is largely driven by our culture and the flexible and adventurous career pathways in our roles offer. Made is unique offering typically attracts people who are looking for more than just a job but a career full of endless possibilities.

From flexible rosters, site variety and diversity across industries, locations and equipment, we invest heavily in our people so we can deliver opportunities that are truly unrivaled in the industries in which we operate.

The 2 core drivers for this are our bespoke culture lead programs, global pathways and 3 years. These have both been continuously refined to ensure alignment with the growth of business and the needs of our people and more on these later. This year, Meda also received 2 prestigious awards as WA Large Business of the Year as well as the overall winner of the WA business of the year at the Western Australian business awards.

This is an incredible honor among some stiff and worthy competition and great recognition for the entire team who have work portable injury frequency rate of 3.6 recordable injuries per million hours worked -- made a strong safety track record was supported by ongoing education, innovation and the investment in our gear for safety programs.

This included continued strengthening of Meda's engineered safety controls within its global service fleet evolving the Madorapp as well as hosting after safety-focused made to days across our global operations to further educate our teams on safety-related information.

Before we head into the financial review, I'd like to provide a quick snapshot of our half year highlights. We delivered a record half year revenue of $485.2 million, an increase of 18% on the prior corresponding period. This was coupled with a solid NPAT of $30.5 million, up 17% on the [indiscernible] . Further, our balance sheet was strengthened with net debt down 57% to just $3.6 million.

The labor markets in which we operate continue to exhibit extremely competitive conditions. However, through our multidimensional recruitment pathways, we delivered strong net headcount growth of more than 250 people during the first half.

This is evidence of our ability to continually attract and retain the best talent in the industries in which we operate as well as deliver value to our technicians with unrivaled growth and development opportunities. These include our global pathway initiative and trainer program that unlock career possibilities around the world as well as our 3-years program that promotes comradery and Advent, 2 venues that are at the core of everything made it does.

Demand remains strong across all regions with our core mechanical and other industry vertical service offerings consistently meeting customers' needs. The North American segment continued its steady growth profile, delivering its third consecutive half year period of revenue growth, delivering $90 million of revenue. This sets a solid foundation and positive outlook for the remainder of the financial year. We are more than ever focused to achieve our strategic plan with guidance in line with expectations for FY '26.

Now onto a more detailed look into our performance across our all market segments. Our Australian segment continues to move from strength to strength with revenue up 19% on the PCP for the half year. Demand for ancillary and infrastructure services continues to grow with both areas delivering strong revenue during the period. As mentioned earlier, our North American segment delivered steady growth.

Drilling down into the half the segment is showing positive upticks our workforce and customer base continues to grow. Our customer profile in this segment is very strong a large portfolio of blue-chip companies secured across both Canada and U.S. operations. This high caliber of customers supports a stable pipeline of work for the group as we move into the second half of the financial year. In terms of our Rest of the World operations, made delivered a 36% increase in revenue for the period.

This was achieved through our continued diversification in our global operations, including putting our first boots on the ground in New Zealand. This global growth is supported by made strong reputation for safety and technical excellence. Our team continued to deliver significant value to customers across the globe. We bespoke tailor-made solutions designed to improve equipment reliability, safety and upskill local workforces. I'll now pass you over to our CFO, Paul Agee, to run through the financials in more detail.

Thanks very much, Justin, and thanks to everyone who's taken the time to join us on the call this morning in what is a very busy results day. I'll be going over the half year financial performance for the group. .

To start with -- as Justin mentioned, we delivered $485.2 million in revenue, up 18% on the PCP. This growth rate exceeds the growth rate implied in our annual revenue guidance of 15%. Importantly, this revenue growth has been delivered with stable margins with NPAT being delivered at 6.3%, consistent with the PCP and in line with our historical first half versus second half metrics. Our second halves typically deliver a stronger NPAT margin as we scale into the operating base that is established in the first half.

Importantly, we are comfortable with the margin position as it stands today. There are several margin optimization projects in place as they always are in any services business, which are expected to improve our second half margins in parallel with operating leverage, as I referred to earlier.

North America continued its growth trajectory, delivering its third consecutive half-on-half revenue growth with it now representing almost 20% of group revenue. Excitingly, the visible workflow pipeline ahead is encouraging for this segment's second half. EBITDA increased by 9.2% versus PCP which is a little behind our NPAT growth rate of an increase of 17% versus PCP. The reason for this is with much stronger growth momentum and improved earnings our annual short-term incentive payments have scaled upwards, which reflects the much stronger position the business is in today compared to 12 months ago.

For those shareholders familiar with our performance-driven growth-focused incentives these payments accelerate in line with NPAT growth. And given NPAT has increased by 17% versus PCP. Our incentive payment accruals reflect this. From a shareholder perspective, EPS increased to just over $0.15 per share, reflecting an increase of 16% versus the PCP. Finally, the interim dividend was suspended this half year following the review of the capital management strategy by the Board.

Typically, capital management reviews and alterations like this point to something less positive happening in the business. But in our case, it points to something much more exciting ahead and I'll touch on capital management on the next slide. Let's move on to the financial strength of the business. Cash collection and free cash flow generation improved during the half year, and days sales outstanding reduced by 10 days down to just 50 days compared to 60 days at 30 June 2025.

This in conjunction with an increasingly capital-light service delivery model contributed to a reduction in net debt by 57%, down $4.7 million which meant we closed out the half year with net debt of just $3.4 million. This translates to net leverage of just 0.03x which is as close to new net debt that we can get without actually getting there.

We continue to be well supported by our lenders with our primary lender Nav in Australia and also have strong working relationships established in the U.S. and Canada. This leads nicely on to an update to our capital management framework, as I mentioned earlier. The Board has adjusted its capital management framework and elected not to pay an interim dividend for the first half. This action, in combination with improved free cash flow, which I'll expand on in a few minutes, we'll accelerate the group's pathway to net cash and strengthen our liquidity to support a more aggressive approach to organic and inorganic growth opportunities.

In the past, the group's dividend payments have been modest with a dividend yield of circa 1%. Given this, the group's primary focus remains on optimizing capital allocation to fund growth. This approach is intended to enhance overall shareholder value through higher earnings capacity in the future, improved returns on capital and increased financial flexibility whilst, of course, maintaining a growth-focused business direction.

Now on to the cash flow. Our net cash flow from operations was $30.9 million. Our intense focus on EBITDA conversion was maintained throughout the first half of FY '26. Operating cash flows before interest and tax as compared to EBITDA was 98%. This great result reflects the quality of our client base in the trade receivables ledger, as I mentioned earlier. Consistent with the lighter ratio of capital expenditure to revenue growth, Free cash flow increased to $15.8 million for the half year. And I'll expand on this point a little further to help paint the picture a little more clearly.

This is the sixth consecutive half year period of positive free cash flow and is being made possible by scaling non-vehicle based service delivery lines, meaning we can grow earnings without having to purchase the high lux Land Cruiser or Dodge Ram for every new employee we bring into the business. Whilst we have always considered our business model to be capital light, it is becoming more so as we scale into new verticals with lower capital requirements. That's probably enough for me on the financials. Jan, back to you.

Thanks, Paul. Let's keep it moving on to our next slide, the strategic plan. Almost 5 years ago, the Board laid the foundation for our future by setting out some key areas focus in our first strategic plan as a publicly listed business. Since then, this has been a blueprint to guide our growth. The strategic plan set growth targets and operational goals in 4 key areas: geographical diversification, service line diversification, expansion of industry verticals and of course, to scale the existing business.

Further, targets for NPAT were set out, as you can see detailed on the slide. With that said, we identified the need to establish a series of core building blocks to create a solid foundation for future growth, which leads us on to Slide 13 and 14, our building points. Over the years, we've built a strong foundation for growth and 1 that goes beyond just financial metrics. At the heart of it all is our culture, and our culture is the driving force behind everything that we do.

Programs like Global pathways and 3 years bring this to light, offering our people incredible opportunities to travel the world whilst working and spending their R&R creating memories with their team and families. These programs are now active across Australia and North America, and I would also add that these experiences are currently unmatched in our industries. We have worked diligently to expand both programs, so the opportunities are bigger and better than ever before.

This has seen more than 160 employees during the first half, take on both short- and long-term overseas comments as well as an extensive range of adventures cultivated for our global team. Of course, culture is just 1 piece of the puzzle. Another key driver of our growth is how we apply our proven business model across different industries. By expanding into new markets, we're creating a compounding effect by diversifying revenue streams and tapping into large addressable markets.

Resources and infrastructure maintenance remains a core focus of the business as we continue to demonstrate our quality service delivery offering. Over to Slide 14. We see 2 more large addressable markets energy and transport logistics. In the energy market, we have primarily been focused on delivering latence for natural gas compression stations in the United States. In the transport and logistics industry, we have expanded our efforts to provide maintenance for rail and road transport now operating across most of Australia. Given the critical role of transport and logistics in Australia's resources industry, there is significant growth potential that aligns well with our existing operations. Finally, our building block that is key to future growth involves deliberate entry into emerging markets. As necessary, we'll conduct market research into new industries and assess the suitability for the motor business model to be deployed with some very positive due diligence advancing.

An evolving business, Slide 15. We have a proven track record of organically replicating our unique business model across multiple industry verticals. Exploring opportunities outside of our core services will allow us to capitalize on extending across industry verticals and geographies, effectively creating more opportunities for our level and diversifying revenue streams sustainable growth while tapping into new labor and talent pools.

In addition to enhancing our service offerings, geographical expansion remains central to our growth strategy. We have multiple geographical beachheads and are always looking to enter new locations and diversify our commodity exposure. The Australian business continues to generate the largest portion of revenue for the group at 79%. We are confident in the stability of this segment and now we will continue to deliver strong results in this area. The North American segment continued gaining momentum and contributed 19% of the group's revenue.

There is a significant runway ahead for us in this region with a solid foundation laid. The outlook is really positive for the mid- to long term. Our Rest of the World segment contributed 2% to revenue across the business. And whilst this is still a modest number, it is an important offering for our most specialized technicians. As a business, we continually seek to improve the diversity of our revenue profile. This is a pivotal step towards achieving our FY '26 target of $1 billion in revenue.

Through the strategic enhancement of our service offerings, we can tap into new markets that allow us to expand the group's revenue streams. We are constantly assessing addressable markets where we can apply our culture led business model. This is key to driving future growth and ensuring long-term sustainability of the business.

Our diversified operations continue to create sustainable compounding returns for our shareholders with a continuing high-growth agenda ahead. Now if you can to wind back to Slide 12, where we first touch on our strategic plan, this slide here shows our progress against the NPAT target set on that plan. As you can see for the first 4 years of our strategic plan, we have not only achieved but exceeded our NPA targets.

This half year, we have retained 47% of the target today. We are pleased with this result and remain focused on achieving this goal as we close out FY '26.

With low capital intensity, a unique culture led business model and opportunities identified to drive growth we are pleased to reaffirm Made's FY '26 guidance of $1 billion of revenue and an NPAT of at least $65 million. We have delivered a 10-year compounding annual growth rate of around 30%, and as the business continues to mature, we are excited for what lies ahead as we deploy the compounding effect of the major business model to existing and new markets.

With the first half of FY '26 wrapped up, I'm filled with nothing but confidence as we complete the remainder of this year. The current and prospective investors made to present a robust investment opportunity with many prospects ahead. Backed by a nimble, adaptable business model, we have grown to have a market cap of around $1.8 billion.

The resilience and hard work of our team shines through in many areas, and with them behind us, we will continue to deliver a superior service for our customers and value for our shareholders. Okay. That concludes today's presentation. So thanks, everyone, for joining us, and we'll be pleased to take some questions at this time.

Okay. Let's move into the question time. Normally, it's you asking me the Kelly question we quite like it being on the other foot. Let's start with Joe House from Belote, and we'll break this down probably by segment and go around the grounds. So what exactly is giving you the confidence in the outlook for the Australian segment in the sort of second half and moving into FY '27. And then we'll move into other segments after that.

Yes, good stuff Yes. Thanks, Johan. Thanks for joining us. I guess, look, starting with Australia, as you can see, that 19% revenue growth in the first half, it just shows really positive ongoing compounding growth in Australia. We're watching our verticals continue to scale, infrastructure maintenance, road transport, rail and the like, Joe, on top of an ever growing core business gives us that confidence that there's just a huge runway ahead for us in Australia as time goes by. .

But I think if we look across the rest of the business, North America, some decent growth of 13% there. Really quite I suppose, a building block has for us there in North America. We're seeing a lot of work come on, watching the flow of people both -- through both global pathways in sort of Jan 7 and beyond coming into Canada and the U.S. as well as internal recruitment on top of a very good customer demand in that segment. We're really excited about what's happening in North America moving forward.

And then Rest of the World continues to scale. We had some work come on in New Zealand some really good conversations in other parts of the world as well. And although it is a small part of our revenue sort of profile, we continue to made adding value in these parts of the world and continuing to get interest from customers to continue to scale in there.

So with all those things as well as some of the emerging stuff up and coming, it's a pretty exciting story ahead. I'm fairly excited about where we're at and where we're going, Joe.

Tough. Thanks, Justin, for that one. If Matt Josh from Manasquestion around the strategic plan, timing of its release, how are you feeling about all that, Justin?

That wouldn't be a question all with you without the 5-year strategic plan. But it's coming together really nicely, might where I'd say we're probably a couple of months away from sort of releasing that and mainly just to keep the business really focused on what we're delivering for this financial -- sorry, for this strategic plan.

But yes, pretty excited to deliver that when the time comes before end of financial year.

Thanks, Justin.

Question from Joe from Bell Potter again. Echoing back to my comments around the EBITDA margins being softer compared to prior years. And as discussed, Joe, it's really around -- the main driver is around those material annual incentive payments, which have scaled up in line with NPAT growth. They're a really important feature of us sort of driving growth and resetting every year. You only pay that incentive for that growth once baseline resets every year. So that's a really positive thing that the business is very comfortable with. Importantly, those bonuses are divided by 12 and amortized or expensed over the 12 months. So you actually get a little bit of operating leverage in the second half as the revenue base grows without obviously the incentive payments scaling up at the same time. So hopefully, that answers your question on that.

Another question from Joe. probably for you, Justin. Let's talk a little bit more about the organic and inorganic growth opportunities that we've talked about a little bit today. What do they look like? How close are they -- and what does it mean for the business going forward?

Yes. Thanks, Joe. Look, I guess the organic growth profiles, the opportunities continue to grow for us every time we sort of expand into a different area, a different region of countries we operate in currently as well as sort of the new ones that we spend into, yes, those are continuing sort of on a daily basis. Inorganic, we -- again, we're not sort of sitting here and so we're going to turn into this big M&A company. We're not. But we are looking at and opportunities that can really springboard us into new industries and areas that we haven't worked and don't have the current specialist sort of knowledge of.

So you're looking at how we potentially do a strategic M&A to push us into large addressable markets that are sort of here and now. So they are coming along really well, Joe. We're having some really positive conversations probably too early to let on more than that, but pretty encouraged by where we're at.

And yes, looking forward to the next few months as that unfolds.

A question here from Matt again, probably along the same sort of lines. With the dividend being held back or chats being built, -- when we talk about an acquisition, if that is in case -- that is indeed where the money is spent. Is it -- what's the scale like? Is it going into $100 million of debt? Like what does it look like from that point of view?

Yes. I think for anyone that's followed us for a while now, we're not -- we're kind of allergic to debt. We really don't like it. So we want to build that watches that gives us the optionality to really pursue things aggressively, but pursuit with cash or very low debt. We're not there to put hundreds of million dollars of debt on the balance sheet.

We really want to be strategic and deliberate but take small deliberate steps towards where we want to go next.

Question from Khalid from Bluestem. Of the 250 plus net head count globally, how many were field deployed technicians generating revenue versus corporate and support staff. So a good ratio there, Colitis sort of 7% to 8% of that number is in the support function, workforce coordination recruitment, et cetera, with the rest being in field technicians.

We'll move down to Sam Pittman from Taylor Collison morning, Sam. Thanks for joining us. Probably just let's circle back to the Rest of the World segment, small. How do we think about growth there?

Yes. I mean I think if you have a look at the on the slides there, Sean, the addressable market in those areas is undeniable. I guess, with the rest of the world, we're quite cautious around how we approach that and where we work. But we do look for Tier 1 clients in safe and stable jurisdictions to deploy our technicians into. And yes, there's plenty of that going on around the world and we're in sort of various stages of sort of business development as we enter there. So look, it's certainly exciting. It's certainly 1 that we see a massive sort of growth platform ahead but we're very cautious, deliberate and just safety and security focused, really pointing our efforts towards Tier 1 global clients where we enter those. Good stuff.

Thanks, Justin. A question here from Mitch from Macquarie. Can you give us a little more detail or color on the initiatives underway to improve margins? Was there any other factors impacting first half margins, AG mix of work, scaling up new regions Petra. I'll grab that one. .

There's a couple of things, Mitch. There's always things in a business and a services business like ours where we're looking to optimize margins. Those things include, for example, renegotiating flight discounts with the major airlines, which we have completed and is now in place to the second half. It's things like PPE sourcing and other initiatives of that nature. They're not designed to move the needle by 2% or 3% of the NPAT line, but incremental optimizations that we're always looking to eke out a little bit of margin.

The other factor is operating leverage. We have structured up, particularly in the infrastructure maintenance teams, for example, as 1 that comes to mind, structured with an overhead ahead of the revenue profile. And as we move into the second half and revenue continues to expand we expect we'll get operating leverage for that in the second half. I hope that answers the question there, Mitch.

Question from Sam Pittman from Taylor Collison for you, Justin. With the demand for trade being so high at the moment, -- are you seeing any change in what employees want from an employer?

Yes. Thanks, Sam. Look, from time to time, Sam, it sort of varies a little bit, but we really stick to the model that we that we've got sort of down patent as long as we're paying the teams well and providing these great opportunities sort of around the world and working with their buddies on flexible rosters and different mine sites and working on equipment that they love with their bodies. That's really what we can provide over and above sort of what competitors and essentially sort of 1 miners can. So we slot into that position, and that really keeps us as a as an attractive employment prospects to trade people.

Thanks, Jon. A question from Greg from Fattal Investment Research. Can you just talk us through this not a new truck for every new employee and how that is sort of transitioning -- or how that is continuing to reduce the capital intensity of the business?

Yes, for sure. Yes, Greg, I guess, earlier on in the the business field service operations and a lot of the, I suppose, the core business, the mechanics in trucks fixing sort of yellow and orange equipment was very I suppose, capital intensive around vehicles for -- it was probably 1 to 2.

Every 2 employees have started there be a truck required as we grew those different stores. What we're seeing now, and I guess probably getting back to that, the surge into North America, we saw a high peak or a higher sort of peak in capital as we -- we bought those expensive Dodge Rams and Ford F trucks with cranes and welders and heated bodies and all that sort of stuff for the North American teams -- what we're seeing now with things like infrastructure maintenance, rail, road transport, they're less capital intensive. Our infrastructure maintenance team would have a couple of buses and couple of dual abuts to sort of vary people around to shutdowns.

And so you're sort of seeing hundreds of people come into the business without a need for that equivalent ratio of capital to be spent on service vehicles. So as we're seeing that -- and that probably is true for other different verticals that we're moving into as well. We're just seeing the revenue versus CapEx profile of the business really sort of peel apart in a good way, if that makes sense.

Yes. Thanks, Justin.

A question from Gavin Allen from Euros Hartleys. -- as wouldn't be a half year results question with that question about North America more specifically. So Gates led this 1 off. We talk about the encouraging pipeline in North America. Can you give us a bit more of some insights into their present short-term opportunities, for example? What are we seeing?

Yes. Thanks, Kev. Look, yes, North America, I think we're seeing I guess it's probably the most encouraging growth profile across the business in North America at the moment. I would hazard a guess that there are close to 100 unfilled roles that we can get after in North America as it stands today, which is as good as it's probably been gone.

So we are really doubling down on both internal recruitment in North America as well as our global pathways programs to to get people up there and filling those roles and delivering value to our customers and obviously, building our revenue profile. But yes, I think the opportunity there, it's just I can't remember being as excited as I am about North America as I am sitting here today.

Just a question from Matt Chen from Matt. Again, thank you for joining us as well. Really that question around the EBITDA margins in the first half and in the incentives. There's not too much around incentives from a pretax perspective, that bonuses or incentives were set of $6 million plats was 1.5%. So there's the sort of the mix of cost into the business.

And then when you get to the NPAT line, obviously, there's about a $1.5 million delta to the interest expense with that net leverage coming down. So hopefully, that reconciles back to or your various models just working through a couple of things here Indy from Belo question on margins, comfortable with Australia, 12% in North America at 18% to 20% and Rest of the World circa 15%. I think that's a fair assumption moving forward. in the long term. So yes, no changes there.

CapEx question, what does that look like for the full year. We're thinking $35 million to $40 million for the CapEx forecast FY '26 Indy and then probably a question around the dividend and holding that interim dividend back.

With the focus on growth, does it mean the dividend policy has been reset.

I think it just means that it's been it's under review, and we've made a change to date, and we'll see how that goes into the future probably be the only thing I can add to that.

A question from Mitch and this looks like it might be the last question if anything else comes through. Mitch from Macquarie. -- probably back to North America, market conditions you've talked about what about customers and commodities, particularly in Canada? How do you see those conditions playing out for us into the future?

Yes. Thanks, Mitch. Canada in particular, our expansion, I guess, from the first year or 2, where we were very oil sands dominant, where we sit today our customer base has expanded incredibly well with both sort of Tier 1 customers as well as a really good variety of commodities. I'd say oil sands would probably be if it's not 30%, it's probably there or thereabout.

So from being probably 90% 2 years ago to 30% now. And not that oil sands are shrunk, we've just managed to really grow well over on the East and West Coast. So a lot of gold, a lot of precious metals, copper, there's some coal, there's some phosphates, there's aggregates the spread of commodity is, I would say, as good as Australia. And then our customer base continues to just get more and more robust.

So really, really happy and comfortable with where that sits today.

It's an interesting concept. We get a bit of conversation around the customer base in Canada, and there's probably a misunderstanding in the market out there about how good that customer base action is -- any thoughts on that?

Look, I mean, I think when you look at a lot of the global miners that operate here in Australia are absolutely our customers over there as well. You look at the likes of the text and the Arcelor Mattels and the Glencores and all the sort of certainly a name dropping, but they are. I mean, we're not sort of sitting there at night worried about an aged debt situation or customers that can't pay. I mean we're really yes, we're as comfortable with our Canadian customer base as we are here in a -- good stuff.

I think that's all the questions that I can see on the screen that have come through. We'll wrap it up there and move on to some broker calls. So yes. Thanks very much for joining us. I'll hand it back to you, Darcy. .

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Mader Group Full Year Results Webcast.

[Operator Instructions]

I would now like to hand the conference over to Mr. Justin Nuich, Executive Director and Chief Executive Officer. Please go ahead.

Thanks very much, Rocco, and good morning, everyone, and welcome to Mader Group's full year results presentation for FY '25. Also today with me is our Chief Financial Officer, Paul Hegarty.

All right. To get started, I'm proud to announce that we have exceeded our revenue and NPAT guidance targets of $870 million and $57 million, respectively, having successfully navigated several unexpected headwinds throughout the financial year. With record annual results of $872.2 million in revenue and $57.1 million in NPAT, this achievement marks a significant milestone for our business as we enter the final year of our 5-year strategic plan, and we do so with growth momentum and encouraging market conditions.

This year marks 20 years of operation for Mader, a milestone that speaks to the hard work, grit and determination of our people. These qualities were on display throughout our global operations in FY '25. Our team's commitment to getting the job done wherever and whenever it's needed is what drives our success, and I'd like to extend my sincere thanks to our entire team.

With all that said, let's jump into it. Okay. For those who are unfamiliar with our story, Mader was founded back in 2005 by our Executive Chairman, Luke Mader, Identifying an underserviced niche in the industry, Luke started providing flexible maintenance solutions to our customers with no more than a you or a truck for our North American investors, some tools and a vision. And 20 years on, that vision has certainly come to life. Today, Mader is a truly global business, delivering technical services across multiple industries in 9 countries. And backed by a team of close to 4,000 technicians with diverse skill sets, we proudly supported over 490 customers in more than 640 locations across the globe in FY '25.

Okay. As you can see, over the past 20 years of operation, we have successfully evolved into a truly global diversified business with our unique business model replicated across multiple industries across the globe. By launching fully organic start-ups in new markets, expanding geographically and broadening our suite of trades, we have been able to achieve an average compounding annual growth rate of around 30% over the last 10 years. This growth is significant and importantly, all organically derived. Our ability to tackle new markets and geographies successfully is a testament to the unique business model that Luke established back in 2005. And we also acknowledge that none of this would have been remotely possible without our passionate and hard-working team, which leads me to our next slide, our specialized workforce.

So touching briefly back on Luke's vision. He had a dream to build a workforce where people not only had pride in what they do, but they got to get the job done working alongside their best mates. Now that camaraderie echoes loudly to this day, and we're proud to lead the market when it comes to investing in our people and our culture. As you can see, 66% of our workforce are under the age of 35. Now while we're an equal opportunity employer that provides options for those at any stage of life, our adventurous career pathways typically attract the demographic that are looking for more than just a job. From tailored rosters, site variety, wide equipment exposure, international secondments and more, we invest heavily in our people to provide opportunities that are unparalleled across the industries in which we operate. At the core of this are our 2 culture-led programs, Global Pathways and Three Gears, which have both been continuously refined to provide the best employee experience possible, and we'll touch a little bit more on these later. And last but not least, our commitment to safety remains at the center of everything we do.

With a TRIFR of 3.71 recordable injuries per million hours worked at June '25, we acknowledge that safety is a continuous journey, and the work here is never done. Ongoing education, innovation and investment in our geared for safety programs and culture are key to driving further improvement. Coupled with our investment in technology-based tools, Mader remained at the leading edge of safety across the industries in which we operate. So before heading to the financial review, I'd like to provide a quick snapshot of our FY '25 highlights. We delivered yet another record annual revenue of $872.2 million, an increase of 13% on the prior corresponding period. This was coupled with a solid net earnings of $57.1 million, up 13% on the PCP. Further, our balance sheet was strengthened with net debt down an impressive 73% to finish the financial year at $8.3 million. Amongst current competitive conditions and a destabilized talent pool throughout Western Australia, particularly in the first half, we continue to deploy our multidimensional recruitment and retention programs to deliver net headcount growth of circa 600 throughout the year. Demand remains strong across most regions with our core mechanical and other industry verticals consistently meeting our customers' demands.

Pleasingly, North America returned to growth in the second half, expanding its revenue base by half -- by 8% half-on-half and positive customer sentiment and new customer acquisition are continuing, and we remain extremely optimistic around what the future holds throughout the U.S. and Canada. And we're more focused than ever to achieve our 5-year strategic plan, which I'll touch a little later on. So flicking over to Slide 5, we'll drill down into each segment's highlights for the financial year. In Australia, revenue increased by 17% versus the PCP, delivering $686.2 million. Our core mechanical services remained strong nationally, growing by 14% despite a softer customer demand profile, particularly in the first half. Importantly, that customer demand profile has corrected and is now on an upward trajectory with very strong momentum. In addition to this, our key growth platforms continue to perform. Our Infrastructure Maintenance division increased its revenue profile by 30% versus the PCP and our road transport team, while still small, expanded their revenue profile by an impressive 64% versus the PCP.

In North America, revenue increased by 8% on a half-on-half basis. And this is a really important data point as this segment returned to growth in both revenue and headcount in the second half. Operating in 25 states across the U.S. and 8 provinces and territories in Canada, we significantly broadened our reach during the financial year. New customer acquisition remains at the heart of our growth strategy with the number of active customers in this segment increasing by circa 20% versus the PCP. And jumping over to our Rest of the World operations. We provided specialist services and technical support for customers in 9 countries across Asia, Africa and Oceania. This segment has returned to pre-pandemic activity levels with positive growth opportunities ahead. And whilst it's still a small portion of our revenue base, it remains a strategically important career pathway for some of our most talented technicians.

Okay. I'll now pass you over to our CFO, Paul Hegarty, to run through the financials in some more detail. Over to you, Paul.

Thanks, Justin, and thanks to everyone who has taken the time to join us on the call this morning in what is a very busy results week. I'll be going over the full year financial performance for the group, and Justin has pretty much stole my thunder on most of these points, but there is some additional color I'd like to add. As mentioned, we delivered $872.2 million in revenue, an increase of 13% versus the PCP. Importantly, this revenue growth has been delivered with a consistent margin profile year after year. In fact, at the 4-year mark of our 5-year strategic plan, having expanded the business' revenue profile by an average of 30% over the last 4 years, our NPAT margins have remained steady, varying by not more than 60 basis points from the highest to the lowest financial year.

Whilst this stability is impressive, it gets more exciting when you consider our North American segment returning to growth, up 8% half-on-half. With North American EBITDA margins close to double that of our Australian segment, as this business continues to scale, it represents real margin leverage for the future earnings profile of the group. From a shareholder perspective, EPS increased to $0.2835 per share, an increase of 12% versus the PCP. Total dividends relating to FY '25 were paid or declared totaling $0.088 per share, fully franked, of course. This represents an NPAT payout ratio of 31%, in line with the PCP.

Now moving on to our financial position on Slide 7. As you can see, our asset base primarily comprises cash on hand, trade receivables and PPE. We don't have contract positions or any intangibles to be concerned about. And therefore, we think we have a relatively simple balance sheet. Property, plant and equipment increased over the year as we invested in growth. We added around 450 service vehicles to our fleet, taking our global fleet to over 850 service vehicles deployed across multiple continents. Our trade receivables position is largely with Tier 1 principals and large mining contractors. And due to this, we don't generally need to manage poor credit risk profiles in the debtor book.

Pleasingly, average DSO for FY '25 came in at 69 days, an 8% improvement versus the PCP. This improvement in collection activity, coupled with an increase in free cash flow, which I'll talk a little bit more about on the next slide, enabled the group to report a net debt reduction of 73% versus the PCP, closing out FY '25 with net debt of just $8.3 million. With forecast CapEx in FY '26 expected to be in the range of $35 million to $40 million, we expect the business to transition into a net cash position during FY '26.

This reduced leverage will allow greater flexibility and freedom to make strategic decisions around future growth. We remain well supported by our lenders, in particular, by our primary lender NAB, here in Australia. In addition to this, we have strong working relationships established across all regions in which we operate, in particular, with UMB in the U.S. and JPMorgan in Canada. The flexibility that has been established within our finance facilities will allow us to respond quickly as opportunities present themselves.

Now on to every CFO's favorite slide, the cash flow. Our net cash flow from operations was $76.8 million, an increase of 12% versus PCP. Our intense focus on EBITDA conversion was maintained throughout FY '25. Operating cash flows before interest and tax as compared to EBITDA was 101%. This reflects the quality of our client base and trade receivables ledger, as I mentioned earlier. Now this next data point is perhaps my favorite for FY '25. Free cash flow generated during the year was $42.7 million, a 52% increase versus the PCP. This is the second full financial year in which Mader has generated positive free cash flow or fifth consecutive half year period. As the group continues to scale its revenue profile into non-vehicle-based services, the Mader business model is transitioning into an even more CapEx-light setting. This means we can continue to grow top line revenue without purchasing a service vehicle for every new employee. The result of this is twofold. The business can pay down its debt facilities, reducing our interest burden, which in turn leads to improved net margins. And perhaps more importantly, it positions the group in such a way that we can build a war chest to tackle new growth opportunities in the future. As I mentioned on the previous slide, this will allow greater flexibility and freedom to make tactical decisions around future growth. Now everyone can wake back up as I hand it back to Justin to talk about the strategic plan.

I love it when you get excited, Paul. Right. Let's move on to the next slide, our strategic plan. So 4 years ago, the Board laid the foundation for our future by setting out some key areas of focus in our first strategic plan as a publicly listed business. Since then, it has served as a blueprint to guide our growth. The strategic plan set out growth targets and operational goals in 4 key areas: geographical diversification; service line diversification; expansion of industry verticals; and of course, to continue scaling the existing business. Further, NPAT targets were set, as you can see detailed on the slide.

With that said, we identified the need to establish a series of core building blocks to create a solid foundation for future growth. And this leads us into Slides 10 and 11, our building blocks. Over the years, we've built a strong foundation for growth and one that goes beyond just financial metrics. At the heart of it all is our culture, which remains the driving force behind everything we do. Programs like Global Pathways and Three Gears bring this to life, offering our people incredible opportunities to travel the world while working, then spend their R&R with our internal adventure division Three Gears. This kind of experience is currently unmatched anywhere in the industries we work.

We have worked diligently to expand both programs, so opportunities are bigger and better than ever before. This has seen more than 380 employees take on both short- and long-term overseas comments as well as an extensive array of adventures delivered. And of course, culture is just one piece of this puzzle. Another key driver of our growth is how we apply our proven business model across different industries. By expanding into new markets, we're creating a compounding effect, diversifying revenue streams, while tapping into large addressable markets, for example, in resources and infrastructure maintenance. And the best part about it is we're only just getting started.

Moving over to Slide 11. We see 2 more large addressable markets, energy and transport logistics. In the energy market, we initially focused on delivering maintenance in the natural gas compressor stations in the United States. However, this industry represents a large untapped potential for future global growth. In the transport and logistics industry, we have expanded our efforts to provide maintenance for rail and road transport maintenance now operating across most of Australia. Given the critical role of transport and logistics in Australia's resources industry, there is significant growth potential that aligns well with our existing operations. And finally, a building block that is key to future growth involves deliberate entry into emerging markets. And as always, we'll conduct thorough market research into new industries and assess the suitability for the Mader business model to be deployed.

We have a proven track record of organically replicating our business model across multiple industry verticals. Exploring opportunities outside of our core services will allow us to capitalize by extending across further industries and geographies. This is effectively creating more opportunities for our people and diversifying revenue streams for sustainable growth. In addition to enhancing our service offerings, geographical expansion remains central to our growth strategy. We have multiple geographical beachheads and are always looking to enter new locations and diversify our exposure.

The Australian business continues to generate the largest portion of revenue for the Group at 79%. We are confident in the stability of this segment and know we'll continue to deliver strong results in this area. Pleasingly, our North American segment returned to a growth setting, increasing revenue and headcount in the second half FY '25. Today, it represents 19% of Group revenue with significant runway ahead in this region. Established in 2018, this segment has expanded significantly over time. And with this solid foundation laid, the outlook is positive for the mid- to long term. Our Rest of the World segment contributed 2% to revenue across the business. And while this is still a modest number, the annualized revenue exit rate for the rest of the world is now at pre-COVID levels. As a business, we continually seek to improve the diversity of our revenue profile. This is a pivotal step towards achieving our FY '26 guidance of $1 billion in revenue. Throughout the strategic enhancement of our service offerings, we can tap into new markets that allow us to expand the Group's revenue streams. We are constantly scoping addressable markets where we can apply our culture-led business model. This is key to driving future growth and ensuring long-term sustainability of our business.

Our diversified operations will continue creating compounding returns for our shareholders with strong growth rates into FY '26 and beyond. If you cast your mind back to Slide 9, where we first touched on our strategic plan, this slide here shows our progress against those NPAT targets set. As you can see, for the first 4 years of our strategic plan, we have not only achieved but exceeded our NPAT targets. We're pleased with the FY '25 result, all things considered, and now we have set our sights on closing out FY '26 in line with the strategic plan set 4 years ago by the Board. With low capital intensity, a unique culture-led business model and opportunities identified to accelerate growth, Mader has the confidence to set FY '26 guidance to at least $1 billion in revenue and NPAT of at least $65 million. We have delivered a 10-year compounding annual growth rate of circa 30%. And as the business continues to mature, we are excited to continue to deliver the compounding effect of the Mader business model to existing and new markets. In doing so, not only will we deliver continued growth into FY '26, but we'll continue to build a solid foundation for future growth well beyond that.

With the FY '25 wrapped up, I'm filled with nothing but confidence as we enter a new financial year. For current and prospective investors, Mader represents a very robust investment opportunity with many exciting prospects ahead. Backed by a nimble, adaptable business model, we have grown to have a market cap of close to $1.7 billion delivered over the last 20 years on an entirely organic growth platform. And these consistent results should also see us considered for the ASX 300 in the near term. The resilience and hard work of our team shines through in many areas. And with them behind us, we'll continue to deliver a superior service for our customers and value to our shareholders.

So that concludes our presentation today. And I'd like to thank everybody for joining us, as Paul said, in such a busy results period. And we'd be pleased to take some questions at this time.

[Operator Instructions]

Thanks, Rocco. Okay. Into questions. Jonathan Higgins from Unified Capital Partners. Over to you for this one, Justin. North America, well played back to growth. Can you give us an idea of the interplay of the recovery, V-shaped as we've spoken about previously? Noting headcount at a record, must be some better utilization to come also.

Yes. Thanks, John. Yes, look, it's been certainly a pretty exciting time in North America the last little while. I guess getting that election behind us, I think the whole market has really settled and everyone's sort of head down and back to business. which has been a great thing for us. And as we've spoken about in previous results periods, the business development efforts targeting sort of some of those key markets are really starting to come to fruition. So we're seeing that growth happen. We're seeing a really exciting, particularly gold and copper over there and starting to see that business development really come alive and looking forward to a big FY '26 and beyond. Canada as well, continuing to expand into new regions and new areas. And remembering we're only 3 years old in that space, it's a pretty exciting growth profile moving forward for that region as well.

Thanks, Justin. Another one from John at Unified. Australian verticals continuing to grow, big business. How should we think about growth moving forward?

Yes. Good question. Thanks, John, and I appreciate your questions there. Look, the verticals, we've been talking about the verticals for quite some time now. And I guess the exciting news about that is those things are starting to become of substantial size and really tipping into to move the needle on the group numbers. So things like infrastructure, we've set up both sides of the country in Australia to really take advantage of those opportunities and essentially the same customer base as what we deal with in the mobile space.

So we see that as a huge growth platform. And again, infrastructure on its own could be somewhere near the size of the core business in Australia. So when you think about that, it's a really exciting sort of runway ahead of us. And we feel like we've got some really strong teams in place to deliver those results. Road transport is another one, still far smaller. But again, we're pretty excited about the results we've seen so far. We know it's a huge industry, and we know our business model can really relate and reflect on it. So yes, good things to come.

Thanks, Justin. A question here from Anish Trivedi online. Will the Rest of World region be a focus in the next 5-year plan? Or will the focus continue to be North America?

Look, the focus will definitely be both to be able to scale that as we did last year, it sort of went up about 80-odd percent in FY '25. We still look for great opportunities. Tier 1 clients in safe regions is where we want our people to be working. It's still, as I said in the call there, it really remains a strategic focus for some of our really talented trades people that want to go and work in those areas and support local workforces. So definitely a focus for us as is North America, we see that as a huge growth platform, and we'll continue to put the horsepower into growing that.

Thanks, Justin. A question here from Gavin Allen from Euroz Hartleys. How might we think of the next 5 years? Are you in the midst of generating a new strategic plan by any chance? And I can say that question has been asked about 3 different ways by about 5 different people. So Justin, the next 5-year plan?

Yes. Thanks, Gavin. Yes, look, most definitely, we're well and truly in the midst of creating that next 5-year plan. not to be disclosed just yet, but yes, putting some finishing touches on that. And yes, needless to say, we're pretty excited about releasing that and delivering that in due course.

Good stuff. Thanks, Justin. A question here from Jon Ferguson from the Australian Shareholders' Association. Given our global operations, how are you managing currency fluctuations? The first question there, Jonathan, relates to currency FX. The way that we manage that is we create a natural hedge in country. So our operations are funded through working capital, which are established in the local currency. So Canadian dollars in Canada, U.S. dollars in the U.S. and the revenue from those operations pays down the leverage in those each -- in each corresponding region. So it creates a natural hedge.

Another one here from Joe House from Bell Potter. Provide some color on the Rest of World margins in the second half. How has that played out? And what are we thinking for Rest of World in FY '26?

I'll take that one, Joe. Look, essentially, we started a new contract in the late first half of FY '25, which meant that, that contract was in full force for the second half. And it's a contract of scale with a Tier 1 principle in Africa, and it's good work for our people, and that's what's driving that margin expansion. Into FY '26, we expect that contract to continue. so those margins are expected to hold at around those levels.

A question from Matt Joss from Maven Funds. Free cash flow growth was huge. Tell me about it, Matt. Can you talk more about what the main drivers were? There's 2 key factors there, Matt. As I talked about, the business is transitioning to an even more CapEx-light setting. Some of our new verticals like infrastructure maintenance, road transport, maintenance, rail services, et cetera, these are service lines that are almost CapEx free. Other than some tooling containers and some light vehicles, there's not a 1:1 ratio of new employees to service vehicles. So we're getting top line revenue growth without having to invest in the capital. So that's the main contributor to where free cash flow landed for the full year, which we're pretty happy about. And obviously, as we scale those new verticals in FY '26, we're expecting that to that to continue.

A question from Stephen Matt from the Australian Shareholders' Association. Thanks, guys, and well done on another good year. Just for your comment about potential ASX 300 inclusion. What are we thinking about that? How do we get to the $300 million, Justin?

Stephen, Good to see you online. Yes, look, certainly, as our market cap has grown, free float is there or thereabouts. And we continue to grow into FY '26. I think those numbers will take care of themselves over time. But yes, it certainly seems that we are close to consideration. Obviously, not a massive focus for running the business. We'll just continue delivering the numbers, but that will happen in due course.

Thanks, Justin. A question from Melinda White from Longwave Capital. To win work in Australia infrastructure or road transport, who are you typically winning work from? And what differentiates your offering versus competitors?

Yes. Thanks, Melinda. I appreciate your question there. Look, infrastructure and road transport initially are really off the back of the customers that we're doing the mobile equipment work for. So most companies that are running sort of large mining equipment are also running some sort of process plant. And many of them are also running road transport style trucks for long haul of -- to whether it be to plants or to port facilities. So definitely leveraging the vendor numbers and customer base that we have. And then also, as we build that capability, then we can also start to roll that out to others within the transport and logistics industry as we have done in the rail space.

Thanks, Justin. A question from Matt Chen from Moelis. Any parameters we can talk about, about inorganic opportunities moving forward, Justin?

Look, Matt, as always, they're certainly on the radar. We take everything that comes across our desk into consideration. Certainly, sort of sitting on the verge of net cash, that probably becomes more of a reality as we go forward. But as we said before, we're still formulating or finalizing that next 5-year plan, and that is certainly in consideration there as well.

Thanks, Justin. A question from Frank Valante online. Can we comment on what losses in FY '25 were generated on Acorns or start-up initiatives? I'll take that one, Justin. It wasn't too much, Frank, it was fairly consistent with FY '24, circa $1.5 million to $2 million for Acorn investment, as you say.

Another one from Frank around North America. Maybe talk to the splits in Canada and U.S.A. more broadly because there's a couple of questions, one from Frank on that as well as another one from Tony Shields around, I guess, customer numbers, staff numbers and locations. staff numbers increased by 21%. Locations up from 540 at December '24 to 640 now. So maybe just some color on that, Justin, around the U.S.A. and Canada.

Yes, no problems. I guess as far as headcount numbers in the North American region, I think we're sitting circa -- we'd be close to sort of 400-odd in Canada now, probably 350, 370 at the end of the financial and the remainder in the U.S.A. would be our splits there, coming close to 100-odd for the Rest of the World.

That's good. A question from Joe House from Bell Potter. How is the sales cycle going in the U.S.A. now compared to the first half, perhaps? Is it shorter and easier to win new work?

Yes. Thanks, Joe. I wouldn't say it's ever shorter or easier to win work in the U.S. But certainly, I think we're reaping the rewards of a really heavy BD cycle that we were doing sort of through that whole election period and turning that into tangible work was pretty difficult at the time. But I think once that election happened and the market sort of freed up and everyone sort of knew what was happening business-wise, we've really seen it return back to a business as usual there in the U.S. would probably be the easiest way to put it.

Good stuff. Another question from Anish Trivedi online. As we expand in the U.S. and into other modalities like rail and road transport, will we see gross margin strengthen over the next few years? Or will it be more of the same?

Yes. I guess we're early -- very early days into other industries in the U.S. and Canada industries, we still see some huge growth opportunity that we're putting all of our focus on at the moment. But look, we would expect so. We've seen that typically in the markets that we do work. So we would be looking for similar markets or similar returns on sort of new business ventures over there for sure.

Question from Andy from Bell Potter. Two-part question. I'll take the first one. You can take the second one. You talked about current capital intensity of the business and CapEx FY '26, we're guiding $35 million to $40 million. And the second question here is around capital management. With the balance sheet returning to net cash in '26, Justin, will we be exploring inorganic growth or looking at increasing payout ratios?

Yes. Thanks. Yes, certainly, with the balance sheet returning to that or getting to net cash. I guess it gives us a lot of opportunity to explore both, Andy, to be honest, and we will do both. We're definitely looking at some inorganic growth opportunities. We always have. We're just not very good at actually executing. We sort of typically get back to that organic model because it's sort of what we do well. But no, it's definitely something that we'll be considering going forward. Increased payout opportunities. I guess that's probably more of a Board question at the time.

Good stuff. A question here from Simon Carter online. Well done on improving your receivable management. I'm curious as to how far you can take this. What are the standard payment terms you offer your clients. I'll take that one, Justin. I guess, Simon, it's sort of the 30 to 60 days is typical end of month. So sitting -- DSO sitting at 69 days is pretty much where I think we'll land. We might be able to squeeze that 3 or 4 more days lower, but where we sit today is pretty optimal, to be honest.

A question here from -- where is it? Joe House from Bell Potter. Maybe some general commentary, Justin, around the various service lines, excluding heavy mobile equipment and how they're contributing to the Australian segment. Are these service lines at critical mass and contributing meaningfully compared to, I guess, the core business?

Yes. Good question, Joe. I don't have the exact percentage numbers there in front of us. But yes, look, certainly, with our electrical divisions and particularly with, I suppose, the focus from mining and other companies on electrification of things on green energy and the like that we see that as a huge continued runway ahead of us, welding and fabrication, light voltage or low-voltage electrical and then as well as things like the heavy road transport, rail and the like. They have all got massive runways ahead. They would be plus 20% of our revenue for sure. I'll double check that number and get you a more accurate one. But yes, they are definitely tipping in, in a meaningful way, and we see those with huge runways ahead.

A couple of questions here from Melinda White from Longwave. As you expand into new verticals, is the nature of the type of skills in your workforce changing?

Yes. Good question, Melinda. And it probably just gets back to that last comment around sort of electrification of many things like companies going to battery-operated mobile equipment, renewables on site and all the rest of it. So certainly, that electrical scope of work has been continuing to grow. It definitely doesn't change the need for the heavy-duty diesel mechanic. I mean that is things with tires and wear parts and suspension and final draws, all that sort of stuff is still very, very relevant. It's probably just an additional upskilling of those trades and a bigger opportunity for the electrical trades as we move into the sort of new world, I guess.

A follow-up question to that. How difficult is it to recruit skilled technicians and maybe talk to that between Australia and North America.

Yes. I would -- I don't think that's really changed too much over the years. I mean it's always been a bunch of trades that are typically very hard to get hold of. I don't think there's anywhere in our business that we're not recruitment constrained, but that is the way we like it. So our opportunity is to create those great opportunities for employees as we spoke about with our Global Pathways and our Three Gears. We pay our people very well. We look after our people. We give them huge opportunities. So it's probably really accentuating that point of difference that our business has to attract employees to come and work with us.

Another question -- a follow-up question on that. How do we see wage inflation that we're facing versus prices you can charge the end customer for work? I'll take that one. Look, wage inflation has been steady, Melinda, for the last 5 to 10 years, to be honest with you. It sat in that sort of 3% to 5% range. Over the last 12 months, we've seen that moderate slightly in Australia and be consistent in North America. And in terms of how we pass that on to our customer, we've been able to secure price increases at least in line with inflation over the last 2 or 3 years, in particular, where we have seen wage inflation at that sort of 3% to 5% range. So we're keeping up, I guess, with how wage inflation is coming through to us. And I guess that's confirmed by the margin stability that I talked about earlier.

A question here online from Tony Shields. Looking for a bit more detail on the increase in staff. Total staff increased over the year by 21% and revenue increased by 13%. What's the difference there? Tony, it really comes back to the ramp in headcount growth. First half was a little bit softer from a demand perspective, particularly in Australia, and we saw that return in the second half. So a lot of the headcount growth comes through in the second half, but you only get 6 or less than 6 months' worth of revenue out of that headcount. So that's the, I guess, the difference there between revenue growth and headcount growth. That's where that headcount growth landed in the cycle.

Another question from Andy from Bell Potter. The verticals you mentioned, they are currently offered in Australia, right? So is it something that you can take to services outside Australia as well in due course?

Yes. No, good question, Andy. And yes, it definitely is. And I guess we try and build our capability, particularly in new verticals sort of on home soil and then sort of take it away. I think with the U.S. and Canada, in particular, it's really sort of how much leadership horsepower you have to point at certain things at any particular time. And yes, at the moment, we just see a huge runway ahead of us in sort of the core business, which is where our focus is. And as -- definitely as we build that capability and leadership capability across the globe, then we'll point it at the sort of next verticals as we see fit.

Good stuff. A question online from Alex Chang for you, Justin. How is the localization of the teams in the U.S. and Canada progressing? And is skill availability a constraint on growth at all?

Yes. Thanks, Alex. Look, localization of the team, definitely happening across various parts of North America. And I think largely received well. I think we've sort of seen the benefits of a lot of that through the back end of '25, and we'll continue to see that in '26. Look, it's definitely not a silver bullet, but it's something that we'll continue to sort of apply in markets where we see it suitable. And sorry, what was the second part of that question?

And expanding them into the -- outside of Australia. And the other one? Sorry.

Constraint on growth.

Constraint on growth. No. Look, it's probably more having so many things on the table at one time. So really around us, we want to pick the markets that we want to belong in. We want to give those -- our time and effort to make sure that our customers are getting a great experience, our people are getting a great experience and sort of grow responsibly and sustainably and make sure it sticks is the real priority for us, Alex.

Question from Justin online. Just curious about the stated dividend policy. What is the logic of the targeted payout ratio? Justin, I guess the way that we structure our payout ratio is 1/3 is -- approximately 1/3 is returned to shareholders and 2/3 is reinvested in growth. And I guess that's a metric that we've held true for the last 20 years. We're a high-growth business. We're a growth-focused business. And so that 2/3 of NPAT reinvested in growth is sort of the benchmark that we think we need to be at in order to keep the growth rates up as a business. So it's always under review, obviously, but that's where it sits currently.

Question from Marcus Burns from Spheria and we're probably going to have to wrap it up very shortly. The question was how is skilled recruitment going in North America?

Yes, Marcus. Yes, look, it's going well. And I guess when we talk about North America, we've got sort of 2 streams there. And one is the global pathways of our Australian expats that go and spend their time over in the U.S. or Canada, and that continues to be a really strong stream in putting into those markets. Even more so now into the U.S., given we're back into a nice sort of growth profile there, we'll look at expanding that global pathways opportunity to those over there. And then local recruitment, still very good. I think as we're building a brand over there and becoming more well known, it's becoming an exciting opportunity for Canadians and Americans that want to sort of work outside a region and do the things that I guess the Mader model allows them to do, which is sort of travel around their own country and see lots of different things and work in different regions, different commodities on different rosters. And as that's becoming more and more well known, it's definitely an attraction piece for employees wanting to work with us.

Good stuff. Last question because we do have to get on to another couple of calls in just a minute. Last question from Marcus. Can you make any callouts in terms of the minerals exposure and the growth in various areas in North America, gold versus coal versus nickel, et cetera?

Yes. Thanks, Marcus. Look, definitely seeing a lot more buoyancy in gold and copper in the U.S. in particular. Coal, showing some signs, but early days. We thought it may switch on a little earlier, but definitely making the right noises, but probably just yet to see that sort of transform into any real sort of headcount growth in those areas. A little bit of met coal over on the East Coast, but the rest of the aggregate is still going really strong. That probably the main ones.

All right. There are still a few unanswered questions, but I can get back to those individuals in writing throughout the course of the day just to make sure we close them out. But we do have to end it there at 15 minutes too because we do have to jump on to another call. So I'll hand it back to you, Rocco, to close the call.

Yes, sir. Thank you. That does conclude today's call. You may now disconnect your lines, and have a wonderful day.