MND.AXMND.AXASX
Loading
Operator: Good day, and thank you for standing by. Welcome to Monadelphous 2026 Half Year Results Presentation. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to Kristy Glasgow, Company Secretary. Please go ahead.
Kristy Glasgow: Hello, and welcome to the Monadelphous 2026 Half Year Results Investor and Analyst Briefing. I'd like to begin by acknowledging the traditional owners of the lands on which we are joining you from today in Boorloo, Perth, the Whadjuk people of the Noongar nation and the traditional owners of country and her respects to elders, past, present and emerging and extend that respect to all aboriginal and Torres Strait Islander people. Presenting from Perth are Monadelphous' Managing Director, Zoran Bebic; and Chief Financial Officer, Phil Trueman, who are joined in the room by our Chair, Rob Velletri. Throughout this presentation, the speakers will guide you on when to click through to the next slide. The structure of this morning's presentation will be similar to previous results presentations with some further detail provided as appendices. Copies of today's presentation and associated materials are available on our website at monadelphous.com.au. I will now hand over to our first presenter today, Zoran Bebic, who will start on Slide 2.
Zoran Bebic: Thanks, Kristy, and welcome to our 2026 half year results briefing. Today, Phil and I will present our financial and operational performance for the 6 months ended 31 December 2025, as well as our outlook. We will then answer any questions you may have. I'll begin with our group performance and highlights on Slide 3. Monadelphous has had a fantastic start to FY '26, achieving a record revenue of $1.53 billion for the half year, which is a 46% increase on the prior corresponding period. We experienced strong operating conditions across all sectors with activity levels supported by the record level of work secured during the previous financial year. Our Engineering & Construction division delivered revenue of $677.8 million, up around 67% on the prior year, supported by service expansion and growing capability in end-to-end delivery, particularly from Melchor and Inteforge. Zenviron, our renewable energy business, also saw increased levels of project activity from larger wind and battery energy storage projects. Our Maintenance and Industrial Services division reported a record half year revenue result of $852 million, up 32% on the same time last year, reflecting an increase in energy sector activity and sustained strong demand in iron ore. Earnings before interest, tax, depreciation and amortization was $116.2 million, an increase of 46% on the prior year, delivering an EBITDA margin of 7.59%. Strong operational performance resulted in net profit after tax increasing 53% on the prior year to $64.9 million, delivering earnings per share of $0.652. The Board declared a fully franked interim dividend of $0.49 per share. We ended the half year with a cash balance of $322 million and a very strong cash flow from operations of $171 million, resulting in a cash flow conversion rate of 186%. Phil will talk about this more later. We continue to progress our markets and growth strategy. In late 2025, we acquired Perth-based Kerman Contracting, a design and construct business specializing in nonprocess infrastructure, with a long-established reputation for the successful delivery of site infrastructure and accommodation, bulk storage and materials handling facilities across a range of sectors. We also acquired Australian Power Industry Partners, APIP, a high-voltage electrical contractor based in Brisbane. APIP is a specialist provider of end-to-end high-voltage solutions, including design management, procurement, construction and renewals of power transmission, distribution and substation infrastructure. We also completed the acquisition of Perth-based high-voltage business, High Energy Service, further strengthening our electrical capability. These acquisitions support the broadening of our delivery capability and open new markets for us. Moving now to Slide 4. Monadelphous has secured a healthy $1.4 billion in new contracts and contract extensions since the beginning of the 2026 financial year. Strong demand for construction and maintenance services from Western Australia's iron ore sector continued, and we were awarded more than $1 billion of contracts with blue-chip customers. This comprised several major construction contracts, including a multidisciplinary contract for BHP’s Jimblebar Train Loadout replacement project with earthworks and civils to be delivered by Melchor and fabrication and procurement provided by Inteforge. We also secured a $175 million contract with BHP associated with the car dumper project at Finucane Island in Port Hedland as well as an integrated multidisciplinary contract with Rio valued at around $250 million associated with the Brockman Syncline 1 iron ore deposit development. We're awarded a 5-year maintenance services contract with Rio Tinto totaling approximately $300 million to continue providing fixed plant and shutdown services across Rio's Pilbara iron ore operations. We also secured a 3-year extension to our maintenance master services agreement across BHP's Pilbara operations and were appointed to the BHP WAIO Site Engineering Panel for another 2 years. In the energy sector, we expanded our customer base with the award of a 4-year contract with BW Offshore to provide maintenance services at the BW Opal FPSO facility, approximately 300 kilometers north, northwest of Darwin. We also secured a contract for the hookup and commissioning of Shell's Crux platform off the coast of WA, which forms part of the long-term backfill to Shell's Prelude facility. Zenviron was awarded a contract with Flow Power for the delivery of the Bennetts Creek Battery Energy Storage System in the Latrobe Valley, Victoria, which includes a balance of plant design, construction, installation and commissioning. Over the next few slides, we will cover the key areas of focus under our sustainability framework being people, safety and well-being, diversity and inclusion, community and environment. Moving now to Slide 5, People. Our total workforce at 31 December 2025, including subcontractors, was around 8,400, reflecting sustained high levels of activity across the business. We remain focused on investing in the development of our people and saw around 150 emerging leaders participating in our suite of leadership and mentoring programs and approximately 340 graduates, apprentices and trainees participating in our early career programs. Our registered training organization engaged with over 5,000 trades personnel with more than 6,500 training interactions during the period, comprising high-risk work license accreditation and verification of competency. We also continue to offer services such as skin checks and resources to support our employees' physical, mental and emotional well-being. Let's now look at Safety and Wellbeing on Slide 6. Our high potential incident frequency rate returned to historically low levels and the 12-month injury frequency rate at the end of December was 4.34 incidents, a slight improvement to that of 30 June 2025. In line with our guiding principle, the safe way is the only way, we continue to implement targeted campaigns to drive improved safety performance. Our ongoing fatal risk awareness program is focused on active hazard monitoring and verification of controls during high-risk tasks. As a part of this, we reviewed our forklift operations and implemented a range of improvements aimed at preventing loss of control of loads and making pedestrian interactions with mobile plant safer. We also reviewed the effectiveness and efficiency of high-risk work competency assessments and continue to use drone technology to eliminate the need for people to enter confined spaces. We again achieved recognition for our commitment to safety, wellbeing and innovation with awards and nominations from various industry bodies, including ARIA, the Crane Industry Council of Australia, Workplace Health and Safety Foundation and Demos. Moving now to Diversity and Inclusion, Community and Environment on Slide 7. We maintained our focus on leaving a positive legacy in our local communities, strengthening diversity and inclusion across our workplaces and progressing towards our goal of Net Zero. We continue to support employment pathways and development opportunities for indigenous Australians through traineeships, apprenticeships and the Indigenous Pathways program in partnership with Rio Tinto. Pleasingly, our Aboriginal and Torres Strait Islander workforce participation rate of 3.3% continues to exceed our target. We progressed renewing our next stretch reconciliation action plan, continuing to focus on indigenous employment, training and development and supporting indigenous businesses. Our spend with indigenous businesses continues to grow, more than doubling that compared to the same period last year to around $20 million. We continue to promote development opportunities for women across the business, and our efforts were recognized externally with a number of our people honored at industry awards, including at the BHP Women in Resources National Awards and the Gladstone Engineering Alliance Awards. Our community grants program expanded to include Gladstone in Queensland, Roxby Downs in South Australia and Kalgoorlie, Newman and Port Hedland in WA, with 8 regions now participating in the program. We also launched our inaugural Local Legends campaign to showcase our people making exceptional contributions to the community. To minimize the impact of our operations on the environment, we continued transitioning our facilities to renewable power with the installation of the sold system at our workshop facility in Darwin and expanded the rollout of our electric and hybrid vehicles. Turning now to our Engineering Construction divisional highlights on Slide 8. Our Engineering Construction division reported revenue of $677.8 million for the 6 months, an increase of 67% on the prior corresponding period. The result was driven by strong demand for construction services across all sectors, particularly iron ore and energy with a greater contribution from vertically integrated projects. The division has secured approximately $770 million of new work since 1 July 2025. We successfully completed BHP's Car Dumper 3 renewal project in Port Hedland and Orebody 32 in Newman as well as services at Rio Tinto's Western Range project in Paraburdoo. We also secured an electrical and instrumentation package at Rio Tinto's Parker Point near Dampier. Work progressed on a multidisciplinary contract at BHP's Prominent Hill copper expansion project in South Australia. We also completed work at Talison Lithium's Greenbushes site in the southwest of WA. Melchor continued structural concrete works at Perdaman's urea plant located near Dampier, with Alevro providing heavy haulage services to the project. Melchor also progressed work on the Geraldton Port maximization project in WA for Midwest Ports Authority. In the energy sector, we progressed construction works on modifications to the existing Woodside-operated Pluto LNG Train 1 facility near Karratha, with Alevro also providing specialist haulage and lifting services to other Woodside-operated facilities in the region. We also continued the installation and modification of essential electrical power and control infrastructure at Chevron Australia's Jansz-Io compression project. Inteforge continues to support Iluka's Eneabba Rare earths refinery project with the supply and fabrication of structural steel work and pipe racks and secured a 2-year extension to its agreement with Origin for the supply of modularized equipment for APLNG in Queensland. In the renewable energy sector, Zenviron progressed the balance of plant works for the Warren Battery Energy Storage System, or BESS, for EnergyAustralia in the Latrobe Valley, Victoria, as well as balance of plant works at CS Energy's Lotus Creek wind farm in Central Queensland. Work also progressed with the construction of Fortescue's North Star Junction Best supporting Fortescue's commitment to decarbonizing its Pilbara operations. Looking now at our Maintenance and Industrial Services division on Slide 9. Our Maintenance and Industrial Services division reported revenue of $852 million for the half year, up 32% as we saw strong demand continue for services, particularly in the energy and iron ore sectors. Since the beginning of the financial year, the division has secured approximately $640 million in new contracts and contract extensions. A significant volume of work was delivered for our energy customers, including shutdown and other major works for INPEX with over 1,000 people mobilized across offshore and onshore facilities over the period. We continue to provide ongoing maintenance and turnaround services for Woodside's onshore and offshore gas production facilities in WA's Northwest. This included preparations for shutdown activity and planning work associated with the hookup and commissioning of Woodside's floating production unit in the Scarborough gas field. We continue to deliver maintenance and minor construction services for Shell at the Prelude FLNG facility and at QGC's Curtis Island LNG operations in Gladstone, Queensland. As previously mentioned, we expanded our customer base in the energy sector by securing a 4-year contract with BW Offshore. WA's iron ore sector continued to drive strong demand, and we provided fixed plant maintenance services and sustaining capital projects to Rio Tinto, fixed plant services to Fortescue and general maintenance services to BHP. For Rio Tinto, we secured a 12-month extension to provide marine infrastructure maintenance and minor projects at Rio's Cape Lambert and Dampier ports. We're also awarded a contract for modifications to the existing process plant at Rio Tinto's Hope Downs 2 project. In addition, we continue to deliver fabrication supply, installation and commissioning services at the Tom Price mine as well as nonprocess infrastructure services at Brockman 4. Under our BHP WAIO asset projects framework agreement, we secured works at Berth C and D at the Finucane Island port facilities in Port Hedland. In South Australia, we continued at BHP's Olympic Dam mine site in Roxby Downs as well as South32's Worsley Alumina Refinery operations in WA. For Newmont's gold operations, we secured a 5-year extension to our existing contract delivering general maintenance services in Boddington WA and Tanami Northern Territory and provided sustaining capital projects and maintenance at Lihir Island in Papua New Guinea. Also in PNG, we continued work for Santos in the Southern Highlands region, where we secured the contract for the demolition of the Hegigio Pipeline Bridge. We'll now move to Slide 10, and I'll hand over to Phil, who will provide you more detail on our financial performance.
Philip Trueman: Thank you, Zoran, and good morning, everyone. So this slide, Slide 10, compares our financial performance for the half year ended 31 December 2025 to that of the previous corresponding period. And as you can see, it's been a very strong 6 months from a financial perspective. Revenue from contracts with customers is $1.53 billion, which is up around 46% from last year. And earnings before interest, tax, depreciation and amortization was $116.2 million, an increase of 46% on the prior corresponding period and results in an EBITDA margin of 7.59%. And as Zoran mentioned, our strong operational performance delivered net profit after tax of almost $65 million, up 52.6% on last year, resulting in earnings per share of $0.652. And the Board declared an interim dividend of $0.49 per share fully franked with the Monadelphous dividend reinvestment plan to apply to the interim dividend. We ended the half year with a very strong cash balance of $322 million, which was boosted by a number of material advances received during the period. The cash balance included about $20 million from the acquisition of Kerman Contracting, which was owed to the vendors under the terms of the acquisition. Increased activity levels within the business in the months leading up to 30 June 2025, so the end of the last financial year, resulted in a significant increase in receivables at that date. The collection of these debtors balances during the 6 months contributed to a very strong cash flow from operations of $171 million. And as a result, our cash flow conversion rate for the half year was a very pleasing 186%. And our strong balance sheet remains a key enabler of our markets and growth strategy and supports us in building a more diverse and resilient business. So I'll now hand you back to Zoran, who will provide you with an overview of the outlook for our company.
Zoran Bebic: Thanks, Phil. Slide 11 shows relevant current and forecast Australian market conditions for our business. Pleasingly, as you can see, the sectors in which we operate continue to provide a positive outlook for both capital investment and operating expenditure over the next few years. Turning to Slide 12, Energy Transition. Australia is undergoing a major energy transition moving towards a decarbonized economy. At the same time, demand for energy is growing rapidly, partly impacted by the rise of artificial intelligence and the expansion of data centers. This represents a long-term opportunity that will play out over decades to come and which will require a significant level of investment. Monadelphous is well positioned to play a key role in this transition by leveraging our core and acquired capabilities and further developing new services across the sectors shown on the slide. Our recent acquisition of APIP expands our capability and supports our positioning in the HP transmission and distribution sector. You'll hear more about progress, outlook or the progress/outlook column on the next slide. We see this as the early phase of what is expected to be a strong long-term pipeline of opportunities. Moving now to the outlook on Slide 13. Long-term demand in the resources and energy sectors is expected to remain strong, supported by an improved global economic growth outlook, albeit against the backdrop of trade tariffs, geopolitical tensions and ongoing conflicts. High production levels across most commodities continue to drive demand for sustaining capital works and maintenance services. Iron ore prices remain firm, supporting current production rates and underpinning ongoing investment in both new projects and existing operations across Western Australia's iron ore sector with a continued focus on productivity to maintain competitiveness. The outlook for energy transition metals continues to strengthen with battery metal prices recovering. Over the medium to long term, development in the mining and mineral processing sector, particularly for copper, other base metals and critical minerals is expected to accelerate to meet growing demand, driving significant investment. The energy sector continues to offer substantial opportunities, supported by gas construction projects and sustained demand for maintenance services. We remain well positioned to support customers across the full asset life cycle, including late-life operations and decommissioning. Australia's Net Zero emissions objective continues to drive long-term investment in energy generation, storage and transmission infrastructure despite some constraints arising from planning approvals and network access. Monadelphous is well positioned to capitalize on the energy transition opportunities by leveraging our broad service capability and expanding our high-voltage service offering, while Zenviron is well placed to secure further wind farm and [indiscernible] projects. We will continue to support the resources and energy sectors decarbonization projects programs, working collaboratively with customers and third-party energy providers to deliver a growing pipeline of opportunities. Pleasingly, our committed pipeline remains strong with more than $1.4 billion in new contracts secured since the beginning of the financial year. Following record first half revenue, full year revenue for FY '26 is currently forecast to be approximately 30% higher than the prior year, with first half operating margins maintained. We remain committed to delivering quality earnings through a selective approach to new work, collaborative customer relationships, high standards of execution and a disciplined approach to the allocation of risk. Supported by a strong balance sheet, we will continue to build and leverage our enhanced delivery capability while maintaining the flexibility to pursue strategic opportunities that support long-term sustainable growth. In closing, I'd like to thank the entire Monadelphous team for their dedication and commitment, which are fundamental to our continued growth and success. I also extend my gratitude to our customers, shareholders and many other stakeholders for their ongoing trust and support. Thank you. I'll now hand over to the operator for any questions.
Operator: [Operator Instructions] We will now take our first question from the line of William Park from Citi.
William Park: Perhaps the first question I had was just around how you're thinking about balancing Monadelphous' pursuit of revenue and earnings growth beyond FY '26 and balancing that out with sort of [indiscernible] and productivity management? Just noted that your workforce have sort of stepped down in the last 6 months or so. But are you confident that there's sufficient headroom in your current workforce to perhaps deliver on another, I guess, strong growth into FY '27?
Zoran Bebic: Yes. I think that's a fair point, Will. I guess the way we're thinking about it is with the top line or the revenue guidance we provided 30% growth on the previous financial year. And if you look at the growth profile over the last 2 years, it will be in excess of 50%. So I think that will prove challenging to deliver growth next year. I think recognizing also that in the maintenance revenue result was a very strong result and there is a component of work in there that's in the sustaining capital category that won't replicate in following periods. And in the EC numbers, very strong result. That will be more a function of timing of project awards and the timing of customer commitments to projects going forward. So I guess that's a challenge we've got to balance all of that. But certainly, we're seeing -- I mean, if you think about it another way, the way I think about it, 50% growth over the last 2 years, that's essentially 4 or 5 years' worth of growth in a 2-year period.
William Park: And then one last -- my second question is around the -- how you're thinking about the margin profile beyond this year? I appreciate that you're expecting sort of that 7.6% margin to continue through to second half. But are you expecting that to be sustainable as you move beyond FY '26? I appreciate that a lot of this has to do with the business mix, but just wondering whether that 7.6% is sustainable going forward?
Zoran Bebic: Well, we're going to work as hard as we can to try and deliver on that. A couple of further comments. I mean, we've seen a significant volume and clearly, volumes helped with the amortization of some of our fixed semi-fixed costs. But the other point I'd make, which I said last year as well and probably supports this trend that we've seen in terms of margin enhancement or improvement over the last couple of years, we've got through this 6-month period. And aside from levels of activity being strong, our operational performance has been exceptional across the business. And that clearly supports a position on margin.
William Park: So in comparison to prior periods, has there been improvement in productivity or less of a cost pressure than what you've seen in the past? Because I might be reading too much into it, but just looking at your outlook slide, there's not a single point expressing sort of headwinds or any headwinds for that matter. Just wondering if you're seeing higher productivity now versus 6 to 12 months ago or less of a cost pressure?
Zoran Bebic: I think it's a combination of factors. I don't think it's -- I don't think I could attribute a significant component of the margin uplift to one element. And if I was to, I'd go back to the point that I made just a little earlier around our performance in terms of execution of work has been not just strong but consistent across the business, and that's always a significant driver of margin outcomes.
Operator: We will now take our next question from Jakob Cakarnis from Jarden Australia.
Jakob Cakarnis: Congrats on a strong result. Can I just still stay on Will's focus on the EBITDA margins, please? It seems like there's a little bit of a change to how you guide us. I think this is the first time that I can remember that you've given us explicit EBITDA margin guidance. What's giving you the confidence at the moment to provide that, please, Zoran? Is it a matter of the work that you can see in front of you immediately? And then, I guess, to dovetail into your answer just before the productivity is still washing through the business?
Zoran Bebic: Yes. I think it's a function of -- I mean, we talked about in the outlook statement, the record level of work that we secured last financial year. So going into FY '26, we weren't just in a strong position, but we have a little more clarity. And as work is progressing, we've got -- so we've got greater visibility than we've had. So we've got a high level of confidence in marking a position around expectations around margin.
Jakob Cakarnis: Understood. And then just one for Phil, if I could, please. Just on the CapEx intensity, obviously, it's been bouncing around a little bit with some of the capital works that you guys have been doing from year-to-year. I note that the first half, you were around $23 million of CapEx versus $14 million for the full year of '25. How do we think about that one moving forward, please, Phil? Are we just investing for the growth that you see in the business at the moment? Or is there any fundamental step change there, please?
Philip Trueman: No, there's no fundamental step change at all. I mean, I think you have to look at it over a longer period of time, Jakob, rather than just a 6-month period. I actually think it was a bit higher than the number that you quoted there, it's probably about 35% or something. But if you the 30% growth on last year takes you to just short of $3 billion, I would expect our CapEx would be around that long-term 2% of revenue where it has been over many, many, many years. So it takes you to 60, 65. So sort of take the first half and double it. I wouldn't expect it to be any different from where it has been on the long-term running rate.
Jakob Cakarnis: And then I guess, accompanying that, are we expecting a few extra million of depreciation in the second half just as that capital investment washes through, please?
Philip Trueman: I think comparing between the halves, there was probably a 5% or 6% increase in depreciation, and I would expect that number to be similar for the full year as well.
Operator: We will now take our next question from Branko Skocic from E&P.
Branko Skocic: Congratulations on a really strong result. Obviously, iron ore sustainment work remains a key focus for the business and listening to the majors, it does sound like there's still got a lot of work to come, thinking projects like Ministers North, the multiyear Car Dumper Renewal at Port Hedland and so forth. So just keen to understand, I guess, if you think we could sustain current iron ore revenue run rate for, I guess, a 3- to 5-year period.
Zoran Bebic: Yes. I think you did a good job of articulating the opportunities. I think thematically, yes, I think we'll continue to see a program of larger sustaining capital projects in the portfolios of the majors as well as a couple of greenfields projects in the sustaining capital space, port upgrades, you talked about car dumpers, balance machines, mines, more dewatering programs and initiatives. And then if you're talking about specific mine developments in the Rio. With Rio, it probably looks like Rhode Valley, Gudai-Darri, Rhodes Ridge a little further out. And with BHP, you touched on Ministers North opportunity are probably the key opportunities. But it does look like -- at this stage, it looks like a pretty strong portfolio of opportunities.
Branko Skocic: No, that makes sense. And I guess the second question, just on the topic of labor, I'd just be interested in any areas that you're seeing specific tightness at the moment, obviously, noting that the broader commodity complex has rebounded over the past 6 to 12 months as well. I think there’ is something I want to order.
Philip Trueman: You’ve raised that there, Branko. Do you want to ask that one again?
Branko Skocic: Yes, sorry about that. Just on the topic of labor, I'd be interested in any areas that you're seeing specific tightness, just noting, I guess, the broader rebound in the commodity complex.
Zoran Bebic: I think the labor market is still pretty tight. The way I'd frame it is we've seen a slight moderation, but it's still generally tight. The depth of the labor pool, whilst there might be a few more people in the market, the depth of labor pool and the quality hasn't necessarily improved materially. And there are certainly still quite a number of classifications and disciplines that are really, really tight. For example, electrical trades continue to be very tight, but they're not an exception.
Operator: We will now take our next question from Nicholas Rawlinson from Morgans.
Nicholas Rawlinson: Congrats on the result. Just a couple from me. How should we think about the profile of maintenance revenue in the first half into the second half? Like usually, there's a skew to the first half, but it sounds like you had a few one-off jobs. So just wondering how that will impact the profile?
Zoran Bebic: I think the profile for the second half won't necessarily -- I mean, it won't be dissimilar in the sense that some of this one-off nonrepeatable work will continue for part of the period and turnaround activity looks pretty reasonable in the second half. So the thematic for me is more around FY '27 in terms of a step down of revenue for maintenance.
Nicholas Rawlinson: Okay. That's helpful. And just on awards, like it sort of feels like you've gone through quite a heavy recontracting cycle in maintenance, and you've also won a lot of work in E&C. The book-to-burn is still above 1. What does the award environment look like going forward over, say, the next 6 to 12 months?
Zoran Bebic: Well, I think in the -- certainly in the shorter term, I'd expect to see some more contract updates in terms of announcements in the maintenance space as well as the awards in or construction-related awards as well. It's probably a more steady flow of awards than you saw in that. You saw in the lead up to that Christmas and early New Year period, we had a significant level of contract awards. I think it was $850 million of contract awards in a 3-week period. You won't see that again, but it will be more consistent, steady.
Operator: We will now take our next question from John Purtell from Macquarie.
John Purtell: Well done on the result. I have a couple of questions. Maybe just a follow-on from Nick's question there. I mean just in terms of the bidding pipeline, any sector shifts to call out? Energy transition sort of again features prominently in the presentation there. So we're seeing a bit of a migration maybe into that area and maybe away from that traditional iron ore, oil and gas area?
Zoran Bebic: I think the opportunities are strong in that market, but you need to appreciate that we're building in our capability and our service offering in that market. So it will take some time to build the revenue profile for us to build a significant revenue profile in that market.
John Purtell: And an add on to that, I mean, Zoran, in the past, you've talked around some element of project delays, and that's always inherent, but you're seeing sort of clients more readily move forward with projects now than, say, 6 to 12 months ago?
Zoran Bebic: I think if I went back 6 months ago, there was certainly a burst of activity in terms of project approvals and proceeding. It will be a timing issue. It's still taking time. And I'd probably make the comment that it feels -- as a general observation, it's early, but it does feel like a few of these opportunities are drifting a little.
John Purtell: And just the last question, if I may. Just a question on margins. I know a couple of questions have been asked on this already, but I suppose the broad question is, do you still see an opportunity to improve margins in the medium to longer term? Obviously, there's a few moving parts within that, but how do you see that profile?
Zoran Bebic: Yes. So the question was asked earlier around factors contributing to margin and I responded with we've got a little more visibility at the moment. There's some economies of scale. There's the mix of business in terms of the EC revenue growth. And we've certainly had -- and I've said this twice already, we've certainly had really pleasingly consistent and strong performance execution delivery across the business. So I mean, absolutely, we've got aspirations I'd like to grow the margins, but we've got to work hard to maintain the margin we delivered in the half year.
Operator: [Operator Instructions] We will now take our next question from the line of Daniel Kang from CLSA.
Daniel Kang: Zoran, you mentioned earlier that we've probably seen 50% of growth in the past -- that's worth about 4 to 5 years in the past 2 years. Just trying to reconcile that comment with what you've got on Slide 11, which looks like industry charts out to 2030 look pretty steady to growth. Should we sort of take that as your revenue side of things looking quite stable over the next few years?
Zoran Bebic: I mean that's -- I mean, we're projecting -- we're trying to project out a long way. I think the reality is that, that slide in terms of the outlook suggests that levels of activity across the different market sectors to look pretty strong, but a small increase in CapEx and spend. And the point that you made at the start of this, we've seen a tremendous amount of growth over the last 2-year period. We've got to make sure that we can stabilize the business and continue to build off that and ensure we're not putting too much stress into the business.
Daniel Kang: Yes, makes sense. And can you talk a little bit about your recent acquisitions, how they've performed, how they've integrated into the core business? And looking forward, any potential gaps in your portfolio at the moment that you'd be looking at in terms of M&A?
Zoran Bebic: Yes. So if you look at the high Energy service business, it's been within the Mono business for a 6-month period. The integration is at the back end. It's tracking consistent with what we expected or the acquisition business case. In relation to APIP and Kerman, essentially, they're businesses that we've only acquired and completed in the last couple of months. So we're working through a process to integrate them and to start understanding how we can leverage the capability that those businesses have. So their contribution has been very modest in the last couple of months. In terms of the other part of your question, I think there are some areas more broadly we're looking at, but I talked about the energy transition market and the size of the opportunities there. And we're slowly building capability and services in that market. So I think there are potentially some opportunities in that market going forward in terms of potential acquisition opportunities.
Daniel Kang: Just last one maybe for Phil. Phil, in terms of cash flow conversion, obviously, very strong in the period. Is there an element of seasonality? What's the sort of normalized level that we should be looking at?
Philip Trueman: No, there's no seasonality in it. I mean if you look over a long period of time and average it out, we have 100% cash flow conversion rate, but it can swing quite a lot between halves. If you take this last half that we're reporting on now, I think the conversion rate was 186%. If you took the calendar year of 2025, the conversion rate is about 112%, I think it was. It really just depends on your level of advances that you may be able to negotiate on jobs, how and when they unwind, how you close jobs out. And then quite honestly, the biggest factor, and it is the most simple factor is how your customers pay you around the reporting period end. If you get a big bill that is paid on the 30th of June as opposed to the 1st of July, it can make a big difference to the cash flow conversion rates in those periods. So there is very little seasonality in it at all. And the conversion rate always ends up being around that 100%, which is exactly where we want it to be.
Zoran Bebic: One of the great things about being in contracting, you've got to allocate a lot of effort to manage it and very hard to forecast.
Operator: We will now take our next question from Nathan Reilly from UBS.
Nathan Reilly: James, can you just help me explain what happened with the headcount, just the reduction in staff numbers you saw over the last 6 months? I appreciate it's a point in time on both staff points, but just what's going on there?
Zoran Bebic: Yes, there are probably 2 elements to it, Nathan. One is, I don't like to use the term seasonality, but there is an element of that in terms of a component of the workforce is casual, the Christmas and New Year period, they're not necessarily paid. So your numbers look a little wider. So it makes more sense to compare December periods to December periods. But having said that, in the last couple of months in the lead up to December, we did have a couple of projects that are coming to the back end. So numbers were coming off on a couple of significant projects.
Nathan Reilly: Got you. Okay. So I presume they ramped up again if we're looking at today's number.
William Park: Probably holding at similar levels, maybe up a little.
Nathan Reilly: Okay. Final question, just is there something we need to sort of consider in relation to maintenance margins? And I know you don't disclose those margins. But I'm just curious to get a sense on what's happening maybe under the bet in terms of the mix within your maintenance revenues at this point in the cycle. Are you taking -- is there something going on there in terms of the way you price risk? Or is there a shift there just in terms of the nature of some of the maintenance projects, smaller sustaining capital projects that you...
Zoran Bebic: Yes, I think that's an important point. When we talk about maintenance business and we talk about maintenance work, there's a spectrum there in terms of types of jobs ranging from pure maintenance through to smaller sustaining capital projects and some of those will be fixed price projects. So you've got a real mix within the maintenance business as well. And depending upon what the profile of that looks like has a little bit of an influence on the margin outcome.
Operator: I'm showing no further questions. Thank you all very much for your questions. I'll now turn the conference back to Kristy Glasgow for closing remarks.
Kristy Glasgow: Thank you all for your participation today. That now concludes our briefing.
Zoran Bebic: Thanks everyone.
Operator: Thank you for your participation today's conference. This does conclude the program. You may now disconnect your lines.