GenusPlus Group Limited

Okay, everyone, we'll get started. It's just on one o'clock. Good morning, good afternoon, everyone. Depending on state you're in. David Rich is Managing Director of Genius Plus Group, and we've got Damien Wright, CFO, online as well. This morning, this afternoon, we're here to present half-year results for Genius Plus Group, and look forward to going through. Obviously, if anyone's got any questions, you can either hold to the end or jump in if you require. An absolutely fantastic result. We had a really strong half at Genus, $535 million of revenue, $46.3 million of EBITDA, $24.9 million NPAT. We converted Eberwerk to the order book and we've held up the tender pipeline, cash of $178 million and we've announced an interim dividend of $0.02. So if we just pause there for a moment and those that have been on the journey with us for a period of time now, obviously the business has really changed over the last few years and it's just super exciting times and Take the hat off to all of the genus management team, a very strong half, and likewise thank the support of the shareholders that have been with us on the journey. Some of the highlights through that half, obviously we won an extremely large job in our home ground with Western Power and we managed to back on another $110 million worth of revenue to that job. The Alinta WagerUp project was a fantastic opportunity for our energy and engineering business. FMG decarbonisation contracts, so we're seeing some of our miners work towards the decarbonisation that the rest of Australia is working towards. And an outstanding effort with Genus Asiona JV to secure the Western Renewables Link at $1.6 billion this year. Some of the highlights on the corporate side, we've executed a $429 million syndicated facility. We appointed a new director on the board, Tony. I welcome Tony to the Genus family. And our acquisitions integration continues. Obviously, we've done a number of acquisitions over the years. and we feel very comfortable on integrating them into the group and going well with the ones we did over the last year to 18 months. A snapshot of the segments. For those that are newer to the call, Genus is a one-stop shop for anything in the energy market, anything from a service item right up to a $1.6 billion transmission line or infrastructure asset. As said before, $535 million for the group. I honestly couldn't be prouder here today. We're seeing all three segments really, really go well. Still some room for improvement, so I don't think everything's a perfect day, but we'll get to them as we go through the segments later. But, you know, still a very, very strong outcome. infrastructure at $345 million for the half, energy and engineering and other outstanding performance at $151, and our services business that we're really trying to not forget about those lower-end services and stuff that will back up our larger projects. The outlook is a pretty important page as we had a massive conversion of work last six months ago and we've been able to continue to convert that work to order book and we've actually continued to grow our tender pipeline as well. We used to talk about some of the opportunities in the area, but it became quite a large number of opportunities that's out there for Genus, and we'll look more to that in the look-aheads for the segments. But there is an absolute wide range of opportunities. We get to see some of our work sometimes very early at Genus as a part of an asset. that's getting built or a farm that's getting built or a connection that's going to happen to the grid. So there's a range of opportunities, but these are the most important metrics, which is order book intended pipeline. We're not forgetting our recurring works or our more service-y type works. You know, that continues to grow as well. But... Yeah, I think the main standout here is to, you know, attend a pipeline of another $2.6 billion is a fantastic result. We are seeing significant opportunities through the group in the transition into the new energy world, and we're certainly not taking our eyes off M&A opportunities, and we'll continue to bring them to market as they arise. I'll let everyone read the charts and obviously through their own presentations, but just pausing for a minute to see that continuous growth throughout the business and taking a step back to realise we had to invest in the business many years ago to build the systems to be able to do what we're doing today. We did that. We've obviously paused and reflected to our system many times over the years and made sure it's strong enough. And I think we're seeing the results of that as we continue to grow without hiccup. So it's a true testament to the executive team at Genus to build those systems and keep them launching into the future. Financial overview. So record revenue, obviously, for the half up 60% on the PCP. Record EBITDA at $46.3 million. Record statutory NPAT at $24.9 million. Our normalisations in there is acquisition and legal costs, acquisition, legal and advisory costs as per normal as we continue to look for M&A opportunities. We had to close out some old claims in one of our acquisitions from years gone by of ECM. That's in there. Our acquisition amortization is $1.1 million. We have a strong EPS position. The financial position, a strong cash at $178 million, net cash $127 million. We're $22 million in restricted term deposits. Our franking credits are very healthy, you know, but the standout is really, you know, this new facility we've put in place, giving us $278 million of headroom at December for growth. Obviously there is a range of opportunities and, you know, we've had several meetings altogether where, you know, we've lifted our pre-contracts team, you know, some time back now to try and, you know, really leverage into one, the energy and engineering space and the transmission space. But to have that type of headroom obviously is very comfortable for us to grow. And a fully frank dividend, interim dividend of two cents will be paid. The cash flow, so, you know, we generated $91 million in cash. Operating cash flows, conversion rate was 199%. Our CapEx, we spent $34 million to date. We are managing our CapEx as responsibility and strictly as we can. But, you know, with the influx of these larger projects and wanting to own the key assets on that project, we are... We need to invest for those projects. Some of our key equipment you wouldn't be able to hire anyway, so we do need to buy it. We are managing that capex. I'm going to manage that through to $40 million, $45 million for the year, just depending on how the second half goes. We'll continue to manage capex, we understand, as a business. But at the same time, we do need to feed these larger projects or we won't be there at the start line. We'll drop into the segments now and have a bit of a look at the future and maybe talk to some of these segments. So our infrastructure segment, which for those that are new, obviously builds a range of activities from very small power lines to very big ones, substations and anything in that, and now moving into the rail sector to see if we can push on our skill sets in the rail sector Revenue of $345 million. The EBIT followed down at 54% growth. That's a 5.2% EBIT. That's similar to where we were in the last half. We do believe that sort of, you know, obviously with the larger projects coming in, we're just being responsible on how we recognise the revenue on those projects. We think it's there and we've got some margin improvement to do. But I also want to be responsible and make sure we look at these large projects. Obviously, we've told everyone we want to get 5% EBIT out of those projects or better. We will continue to strive for that. We have a range of other working infrastructure that will work closer to our sort of 8%. But I think you will see, you know, certainly I'm not expecting that margin to come down. It's sort of flattened out there and we've got everyone's expectations in line with a far bigger business. So I think it's a fantastic result and we are continuing to look at these bigger projects as they come in alongside the smaller, more typical projects we've done over the last 10 to 20 years. Himlick's fully, fully underway. activity to start is stringing, but all other activities are up and running. We are building Humlink. It is a live project. We're spending time with our management team on site. We're going well. Asiona's our JV partner. There's a lot of effort going into Humlink. So far, it's a great job. We're getting on with it. We're doing it and we're going to build it. So we have no issues at this point in time with Humlink or our JV relationship or any of those things. So We'll continue to strive to the outcome. And, you know, at this stage, there's 18 months, 18, 20 months to go. So we'll just continue to build that. TAS Networks CCI, which we spoke about over the last 12 months, that'll wrap up over this next half. And we look towards the start date for TAS Networks. This is a massive opportunity for Genus Infrastructure. It's a fantastic client down there at TasNetworks in Tasmania. It's a job we've built plenty of times before at Genus. It's right in our sweet spot. So we're really looking forward to getting that job started in this half, we're hoping. and we will start to see the revenue come through from TasNetworks into next year over the coming three or four years. Hunter Central Coast, another major project. Early works was done. There was some early works done at the end of last year, but construction started now and we're underway at Hunter Central Coast. So we'll see that revenue come through over the next two years. Western Power Clean Energy, that was already a massive project for us and we backed in another $110 million. So it's become a very significant opportunity in our home patch for Western Power. And MGC Rail integration continues to go well with infrastructure and the plan, you know, obviously... You know, for those that can picture what we build every day of the week, you know, we build power lines down the road, we build substations, we build, you know, pit and pipe electrical, overhead electrical, you know, that all sits in the range of the utility power work. It's no different in the rail, you know, so there's a raft of opportunities in substations and lines and overhead lines and service and maintenance in rail, and that's really where we want to see is how we can use our skill sets from all of the things we've learnt over the years and pivot that into the rail work. So we actually, it's a perfect acquisition. We've been working with the founders of MGC, or I have, and yeah, it's going really well and we're very like-minded. So I think stay tuned on that. That'll be a good growth area over the next couple of years for infrastructure. But if we take a step back, maybe change page naming, but if we look at We all sit here with our infrastructure business on the market drivers, and we look at rewiring the nation, and it is a fantastic opportunity, but there's just so many other opportunities in this area as well. If we look at the connections, The end-of-life assets, just maintenance work on transmission, you know, and we're really starting to see that over-reached revenue from transmission start to come through now with Humelink starting to put some meaningful revenue into the last six months. and some smaller transmission opportunities that we've started over that six months as well. So we're seeing that smaller business-as-usual type work and that human link work, but we're not seeing 20 of those projects yet. So there's still a long way to go from a revenue point of view on our over-east expansion in transmission, and those opportunities are going to come from from not just rewiring the nation. You know that every asset needs to be connected to the grid and whilst you're connecting to the grid, there may be changes to the grid, there may be upgrades to the grid and there may be end of life assets that need to be fixed on the grid as well. And if we take a step back from that, we can't forget about our mining and private customers that still need us to do their connections. Taking a further step back from that, our distribution arm, you know, we are still very, very strong in distribution and that was the forefront of the national expansion for Genus five or ten years ago is, you know, we expanded in the distribution market and we continue to find new opportunities in the distribution market similar to the transmission market, which is That's really in the streets and working with the utilities, keeping the lights on. And then if we look at that a bit more holistically again, we know we certainly have a huge substation presence in Western Australia. We've always got four or five substations on the go or starting in Western Australia at times. We really haven't seen any meaningful revenue out of the substation market in the east as well. So some really, I suppose you've got some old stuff in infrastructure that continues to grow. We've got some new stuff that's starting to grow now and we've got to make sure we do a good job at that. And there's still some room for new business, you know, where we can take a skill set from the west or even likewise now we might be able to take a skill set from the east and put it back in the west. So I just think there's a long way to go with infrastructure and they're already looking at new areas such as rail as well on top of that. So that's my update on the market drivers for infrastructure. energy and engineering. So this has been a fantastic business for us, or segment for us. It all started with a $1.7 million acquisition of ECM. That's where we started, and this is where we are today. And you can see the bottom point, the electrical and instrumentation work that came through from ECM. We haven't forgotten about that. We're actually starting to to grow that, but revenue of $151 million, EBITDA of $10.9 million, a great result out of energy and engineering. And over the last couple of years, we've really been able to balance this business out with the acquisition of Comtel and Pardal. It's now adding in a lot of engineering revenue alongside our construction revenue. So it's a really well-balanced business. Meanwhile, you know, the Pardal and Comtel business skill sets allow genus anywhere in genus but mainly in energy and engineering to to fully life cycle their project and own the project and be that tier one you know the principal contractor on site which was what our aim always was um we saw some conversions of of projects in that six months with wager up and that moss so they're continuing to win work A few years, probably 18 months to two years ago, we lifted the pre-contracts team and we probably always had one or two projects in the middle and one starting, one finishing. We're trying to lift that up to sort of five projects going at once and we're continuing to work to that strategy. But the electrical and instrumentation part of the business, you know, like there's a lot of... There's a lot of... There's a lot of oomph in the market out there around, you know, such assets as data centres, et cetera, you know, which is a very, you know, the skill set of our E&I business can do that and we're looking at opportunities around those types of opportunities as well as, you know, say your solar and your bus and your substations that we build in and around those assets. Another big driver, you know, we really want to see a wind opportunity come in here. You know, this energy and engineering with, you know, this slide gives you a look at some of the percentages of green energy in the States. But, you know, we really want to add in that whole piece, you know, like if, you know, this segment's going to become a full, you know, power, you know, asset business that can build any asset that's converting something to power. And we put some notes here on the side of this page which really tells the story on how we've become that principal contractor, you know, through using the market growth, you know, having strong partnerships and proven execution. Our services segment, probably more of our newer segment and started with just comms for those that are a bit newer to the call. We had a very small comms piece. Then we bought another comms piece, which was a business out of admin called Tandem, which we rebuilt and looked at opportunities around that comms piece. From there, we moved our asset management part of the business into this segment and added on vegetation over the last 12 months. So an absolute, this business, you know, it was a loss-making segment for us when we first started. If you take yourself back two or three years, so, yeah, an outstanding effort. And, you know, it's got a bit of a more modest growth to this business, but it's a services business. It's long-term contracts. It's really, really... it's a very, very strong contracting play, and that's what we want this business to be. We want all the long-term, you know, 10-year type contracts, if we can get them, certainly threes and five-year contracts, you know, in this part of the business. And, you know, we've been working at building a... like we did with energy and engineering a few years ago, building the foundations of getting this business to a size where its foundations are strong, so it's ready for either to win that large multi-year contract, because that's what they've chosen to do and that's the opportunity, or likewise M&A. Both of them, you need a strong foundation and that's what we've been doing. And true credit to that is we've seen a lot of growth through the PFA business over the years and we've been able to maintain healthy margins. Our Telstra and MBN relationships continue to be strong and now stepping into some multi-year vegetation management contracts. where to next for services. So, you know, we could put up the charts of the total spend of comms and the total spend of asset management of vegetation. But, you know, realistically, these are our three service areas at the moment. And on the right-hand side of the page is, you know, why aren't we looking at some of these areas? We need to take our skill sets or add on new skill sets and take them into these areas on the right-hand side of the page, which are very close to what we're already doing, or we're already doing them, e.g. mining, for example. We're already doing a lot of work for mining. Why can't we leverage that service piece into there? Everyone knows the size of the pie with the defence work, so we'll continue to monitor opportunities there. Facility management, you know, that's where the really long-term contracts come. Water. Water is, you know, how can we not take... You know, this is our... We do a range of asset management for our power utilities. We need to move that into those water utilities. And social infrastructure as well, which is, you know, like roads and public transport and things like that. Again, how do we take our... asset management business and grow it in these areas or vegetation management and obviously telecommunications is a massive piece I certainly don't believe telecommunications is finished yet. I was away on the long weekend with my family on Australia Day and you go to a small town and you can't even download a very simple page off the internet. So obviously we've still got a long way to go, in my opinion, with remote telecommunications or towns and that's where we want to be as a partner to Ambien and Telstra to roll that work out. Other metrics and certainly some very, very important stuff on this page. It may be towards the back of the presentation, but our injury statistics are at 3.5. We have an aim to be under 3, and we're going to keep striving that. You know, without safety, we are nothing. Make that clear. I can speak for half an hour prior to this, you know, on all the good things and all the opportunities in front of us. But getting our people home at night safe or getting them home the same as condition they came to work is by far the most important for us. And also... making those people feel comfortable that the safe system of work does have, you know, has experience. You know, we've got 20 years of experience, you know, not quite 20 years in Powerlines Plus and through to Genus of actual real-life experience that goes into our safety systems, and we're not going to stop investing on that so that it's ready for the growth as we go. Sustainability and ESG, we'll need to follow the Corps Act and the requirements around that moving forward. And we've got the right consultants and we've done a lot of homework on that. So we're well in front of the curve and ready for that. Our apprentice and trainees, we are working hard here. We have seen some growth in it, but not as much as we want. This is a key focus area. We need to train more people. We did do a massive overseas drive over the last couple of years. That has worked very well and we welcome all those people into our family. But we also need to continue striving to train local people and local young people. So we want to continue to put effort into this and hopefully we see the outcome of more effort over the next couple of years. and talking back to those systems and, you know, the hard work that got put in over the last 10 years to see the people now, nearly 2,000 people, and us handling and not under pressure is because we've done the work in the past. So that sort of wraps it up, everybody. I'm happy to take some questions from there if there's any online.

I'll jump in with a couple of questions, Dave. Congrats on a good result and thanks for taking my questions. Just firstly, if we look at the tender pipeline, it's good to see that it's grown versus the FY25 balance. Just keen to get some colour on the mix there. How's the pipeline for BESS work, transmission work? Are you seeing a concentration of the tender pipeline towards... some of the larger scale projects and just also keen to get your views on other markets like mining infrastructure as well.

Yeah, no, we're not seeing it. It moves around a little bit from time to time, but no, it's... We wouldn't see too many, you know, the panels in the services business probably sit more either in that recurring work or are new, so to speak, so less are in the services space when it comes to the tenant. But certainly I think on a size, you know, infrastructures... two-thirds, let's say, and one-third to energy and engineering. We would normally see that be similar to that, and we can lift our pre-contracts teams and BD teams if we need to to push that a bit harder if we wanted to, or likewise we can sort of hang back a little bit if we're getting very, very busy. I haven't seen that materially change in a couple of years now, like the amount of, you know, like the amount of inrush is still there, you know, and still very live. We are trying to partner with some key people in energy and engineering. It's sort of, you know, because you do a fair bit of early work in that, you know, you're going to go and have a look at a big best project. You'll do some ECI work. So we are working with those key partners to see how long their journey is as well. And that might give us some more colour to that question. But we are, you know, certainly asking those questions. But It's still very, very busy, in my opinion, and I'm not sure how to put that in a spreadsheet, but it's very, very busy.

Great. That's great, Kala. And maybe just looking at the guidance, 35% IPTA growth, no northwest transmission development, has a fair chunk of ECI in FY26. But if we kind of strip that out, is there any assumptions around the major construction work that kind of flows into FY26, or is that more commencing in FY27 and contributing to that outlook?

um yeah that's it's probably on and more that no it doesn't need to be here essentially the answer to that question um it's more 27 but they are these projects are getting a fair bit keener today to get started from probably where we were two years ago when there's a lot of environmental um you know constraints and things that need to be signed off um we're seeing that free up a bit to be honest so i think it has a chance to potentially start so i won't write it out for now but I don't essentially need it either to look at that budget.

Understood. And just maybe lastly, if we look at the services segment, you've now delivered two reporting periods, consecutive reporting periods with EBITDA margins in the teens. How should we think about the EBITDA margin going forward, maybe in the short to medium term? Should we be thinking there's a floor in the teens or potentially even grow from here?

I think we are achieving fantastic percentage results. So I'd probably, you know, if I was working on your site and certain things, you know, I'd hold where you are at the moment. And I think, you know, that we've enjoyed that margin conversion, which we've, you know, for those that have been around a couple of seasons, you know what I'm talking about. We've really converted that and it came out stronger than I expected. I could see that it could do that because I knew some parts of the business were doing it early on, but it's done it probably more holistically than I ever pictured. So a very strong result. The idea now will be to try and hold and grow that revenue line now, a bit the same as what we've done with the other two businesses in the years gone by, or the other two segments.

Great. Thank you. Any other questions or queries?

I might jump back on with another question if there are none. Maybe just on the M&A pipeline, how's that looking? I know you've been a bit quiet for the last six months versus FY25. The cash balance is up. Are you thinking more aggressively on acquisitions? Are there any advanced opportunities that you're entertaining?

We're certainly very keen. M&A and organic growth has worked for us now for three or four years. We've had both and we've been able to handle both. I think there is absolutely, from a bench strength point of view, we are well and truly capable of doing some M&A activity. We probably have lifted that size a little bit throughout this year, you know, where you've seen us typically do some smaller acquisitions. And not to say they won't still flow from time to time. There might be a geographical footprint we want to own or someone in the market a bit smaller is retiring, et cetera, right? So it's... Let's always keep that door open for a smaller piece of the pie, which makes sense for Genus. But we've lifted that size. So we spent a lot of time last year just having a look at what opportunities would, you know, how big could we go? How small should we go? Should we go left? Should we go right? And where are our key focus areas around where we want to do M&A? We have a plan on that, and we've got to execute that plan. So we're going to be as responsible, disciplined as we can here, right? But we do. When Gina says it wants to do something, it normally does. That's the business we are. So I suspect stay tuned, and we'll continue to update the market. But we certainly are keen to see if we can bolt some M&A in at the right time.

Any other questions?

We wrapped it up a bit early. Maybe I went a bit too quick, everyone. Sorry. You all get a bit of time back in your day. Thank you very much, everyone, for joining. We look forward to seeing some of you over the next six months, and if not, we'll see you at the next presentation.

Thanks, everyone.