Macmahon Holdings Ltd Ord

Thank you for standing by and welcome to the McMahon FY26 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask the question during Q&A time, simply press star followed by the number 1 on your telephone keypad. And to withdraw your question, press the star 1 again. For operator assistance throughout the call, please press star 0. And finally, I would like to advise all participants, this call is being recorded. I'd now like to welcome Mick Finnegan, Managing Director and Chief Executive Officer to begin the conference. Mick?

Hi everyone. Welcome to the McMahon results presentation for financial year 2026 and thank you for joining us today during the busy ASX reporting period. We always appreciate your time and interest in McMahon and the opportunity to run through the results presentations. After the presentation, Ursula and I will be happy to take your questions. Starting with the financial highlights on slide 2, McMahon has had another strong year with the business delivering record revenue and underlying earnings growth. We continue to improve the return on average capital employed towards the 25% target only recently set. The increase to 22% was due to our clear focus on improving productivity and discipline across the business and strategic new awards building scale in the target areas which has increased the delivery of free cash flow. As you know, managing capital intensity in the business has been an ongoing focus for us and the improved returns have allowed us to again increase our dividend payout to shareholders. Global geopolitical instability and its impact on commodity prices, trade and the cost of doing business continue to present challenges, particularly with regards to energy costs. Tremarne has been navigating these well, underpinned by our diverse order book and client base. We have been closely monitoring and managing costs and risks and will continue to do so as we execute on our strategy to deliver value for our clients and our shareholders. Some highlights I'd like to call out include new records for revenue and EBITDA and further strengthening of our balance sheet as we again reduce net debt. Revenue and EBITDA were $2.6 billion and $190.1 million respectively and we saw improvement in our EBITDA margin to 7.3% from 7.1% in the prior year. Cash flow generation remains a highlight of the result with underlying operating cash flow of $387 million remaining strong and free cash flow of $103.1 million. Free cash flow is down on the previous year primarily due to McMahon paying the final FY25 tax in FY26 together with the FY26 provisional tax payment. Net debt of $111.1 million reduced 32% on FY25. Importantly, gearing has dropped to 13%, which is in line with our expectations for the year. Both debt and gearing are now below pre-decknell acquisition levels, which reflects our rigorous and disciplined approach to capital management. Total dividends for the year increased by 47% to 2.2 cents per share fully franked, representing a payout ratio of 41% from underlying earnings per share. FY26 Roachi was 22% which exceeded our previous long term target of 20% and up from the 21.2% at the half. We believe we can continue to increase Roachi through our strategy and are tracking well towards our current long term Roachi target of above 25%. The order book is currently $5.9 billion, up from $5.1 billion at the half, and strongly supported by a robust tender pipeline of $25 billion, of which $13.8 billion is expected to be awarded within the coming 12 months. The order book includes major contract awards announced post-30 June, including the $355 million three-year Mt Marion contract with Mineral Resources, The $406 million 5-year Snowy River project in New Zealand with Endura Mining And the $50 million Mamre Road project with transport to NSW in Sydney Work in hand already locked in for FY27 is $2.2 billion but this does not include the $240 million preferred contractor announcement made last week in relation to Medallion Metals Ravensdorf Gold project It also excludes short-term civil and underground churn work and future contract cost escalation recoveries as per our usual reporting practice. Slide 3 shows our historical performance relative to our guidance but also the long-term track record and consistency in delivering growth. I'm very pleased we have extended our track record of meeting or exceeding our market guidance to 10 consecutive years. Our CAGR over this period has been 25% in revenue and 21% in EBITDA. I can again assure you that we are very motivated to maintain this track record of consistent success into the future. I appreciate many of you are familiar with our business, so I will only briefly touch on slide 4 to recap how our business is structured. Our three operating business groups being surface and underground mining businesses and our civil infrastructure business. Each of these operating teams brings its own specialised skills and expertise to the group and allows McMahon to deliver a wide range of services to our clients in Australia, Indonesia and across our region. Our corporate team is focused on strategic growth Leveraging home ground to secure strategic partnerships and pursuing M&A growth opportunities to establish a hollow mine service offering FY26 highlights in our mining business as shown on slide 5 Purpose and underground mining combined generated almost $2 billion in revenue for the group Underlying EBITDA was up 6% on FY25 to $157 million and the EBITDA margin increased to our long-held target of 8%, again an improvement on our FY25 results. Our surface mining team secured over $1.1 billion of new work, including a $792 million extension at Byden, $190 million five-year letter of intent for open pit mining at Wollowinta, and $150 million contracts for the restart of open pit mining at Mount Carlton. Our surface tender pipeline of $10 billion of which $5.6 billion is expected to be awarded in the next 12 months is a very selective pipeline including key strategic partnerships. Our underground business had another successful year winning new work including an initial $55 million 12 month award at Majestic. which was then followed by a 12-month extension, a $36 million contract at Kuching Leah in Indonesia and commencing early works at Mount Carbon where we received a letter of intent in March. Since June 30, our underground team has won a $355 million contract at Mount Marion and a $406 million contract at the Snowy River Project in New Zealand. The underground business is growing in line with our expectations and now contributes 24% of group revenue. We continue to target revenue growth from our underground business to achieve the $750 million run rate by the end of FY28. This expectation is underpinned by an underground pipeline of $6.2 billion of which $3.1 billion is expected to be awarded in the next 12 months. Included in this pipeline is the Ravensdorf Gold Project which Medallion Metals recently announced us as preferred contract owners. Some highlights from our civil business over the year are outlined on slide 6. The Decknell civil infrastructure business continues to grow and its contribution to the group has increased to 26% of group revenue. Deckmill continued to perform well and has cemented its place in the group alongside our mining operating companies, generating opportunities to promote our unique combination of services. Deckmill secured inclusion into the highly strategic Rio Tinto Pilbara Bulk Earthworks Panel, which we anticipate will be a source of future work for the team in Western Australia. Order book growth remained a key focus for Deckmill. The business again won over $500 million in new work during the year. The Work 1 includes civil works across roads, accommodation villages, infrastructure and wind farms and a significant number of resource projects which create strategically important opportunities to partner and build operational synergies with our mining businesses. Since 30 June we announced a $50 million early works contract win with Transport for New South Wales on Stage 2 of the Mamre Road project in Western Sydney. We are targeting robust growth from Deck Mill with an $8.8 billion tender pipeline, of which $5.1 billion is currently expected to be awarded in the next 12 months. This short-term pipeline includes a key number of larger projects in both the east and west. Slide 7 shows our key surface mining projects. Like in underground, we have sought to diversify our portfolio across clients and commodities, typically with long mine lines. We also monitor their position on the cost curve and factor this into our risk assessments. Another point to highlight is the increasing prevalence of clients where we do both the surface and underground mining, such as Anglo-Baldashanti, Wolfram and Paboyo in Indonesia. This highlights the competitive advantage of having an integrated surface offering. Slide 8 shows our underground mining projects, including projects and extensions awarded since 30 June 2026. Our underground team have been awarded several major new contracts that advance our aspiration to become a Tier 1 regional underground mining operator. Slide 9 shows our growing list of key civil projects. I don't intend to go through each project separately, but some of the key points to call out include the inclusion of Deck Mill as one of the three civil infrastructure contractors on the Rio Quinto Pilbara Bulk Earthworks Panel, which creates a strong pipeline of future work. A growing list of civil infrastructure projects that are moving from the $20 to $50 million range to the $100 to $200 million range and the diversity of infrastructure projects across government, resources and renewables. Diversification has been a key part of our strategy both in terms of risk management but also a part of our efforts to reduce capital intensity in the business. Slide 10 summarises our revenue diversification across At a group level this slide clearly shows the changing contributions of our operating companies and the diversity of our revenue sources. Our surface mining business now contributes half of our group revenue whereas last year it was nearly 60%. This rebalance has been achieved through the growth in our underground and civil infrastructure businesses and their increasing contributions to the overall growth of the company. You may have noticed that gold is the predominant commodity of our keen mining projects. This has been a longer term feature of our order book and the markets we operate in and we continue to have a relatively large exposure to gold at 52% of revenue and we anticipate a growing contribution from lithium over the coming years driven by increased global demand. Our Indonesian business includes surface and underground mining and civil infrastructure services. Our expectation is that this will continue to grow its contribution to group revenue with a long-term target of between 15% to 20% of group revenue. We've been diversifying our business mix to achieve optimal capital intensity to increase ROACHI But also retain some of the barriers to entry we see in some areas. This is visible in the very deliberate growth in the underground and civil infrastructure in recent years. These businesses now account for 50% of group revenue. They have strong pipeline opportunities and we expect these businesses to continue growing strongly and increase overall share of revenue. Moving on to slide 11 on people and safety. This is a fundamental business priority and we continue to invest in this area. in the development of our people and in continued safety improvements. Our safety performance improved in FY26 with total recordable injuries frequency rates decreasing to 1.98 from 2.99 in FY25. This was a pleasing result when you consider we have a workforce of more than 10,000 people across our business. However, we remain focused on driving that number as low as possible. 18 graduates, 16 interns, 79 apprentices, 176 trainees and 201 emerging leaders participated in structured learning and training programs at McMahon. Training and development continue to be a priority for our business. 105 identified emerging leaders completed the McMahon Winning Way Leadership Program in FY26, which is intended to accelerate development of new leaders within our business. This is in addition to the rollout of the new training programs including the critical risk management and psychosocial safety leadership training. We remain committed to maintaining a safe, respectful and inclusive workplace and monitor our employee representation. In FY26 female representation in the Australian based workforce was 20.6% across all occupations and First Nations people represent 4.5% of the Australian workforce. Slide 12 outlines some of the initiatives in the business designed to develop and promote McMahon's culture and values, ensuring they remain at the core of our people development programs. Positive workplace culture is a key element of working at McMahon and making us an employer of choice. Culture and fit are important elements in our recruitment process. They are defined during onboarding and reinforced and embedded throughout the employment cycle. Some of these programs I've previously mentioned and you are familiar with including Respect at McMahon, the McMahon Winning Way, Emerging Leaders programs. Our Together Works employee value proposition was launched and rolled out across our businesses this year. Our EVP brings together our values and our people to ensure the experience of being a McMahon employee is rewarding for both the employee and the company. and is reinforced through our training programs and our communications across the MCMAHON Group Slide 13 outlines some of our sustainability related activities and metrics for FY26 We continued to take important steps during the year to enhance our environmental and sustainability reporting This included complying with new mandatory reporting obligations and maintaining strong governance McMahon's 2026 Sustainability Report is contained within our Annual Report and will be available on our website. It is compliant with our AASB S2 Disclosure Obligation and represents a substantial advancement in our governance and reporting on sustainability matters. But I am conscious of time so I won't go through the rest of the details on this slide now. I'll now hand over to Ursula to talk through the financials.

Thanks Mick. Good morning everyone and thank you for joining us today. I want to start on slide 15 to recap our consistent growth financial performance over the past decade. Nick touched on this when he discussed our guidance track record, but I want to expand on this just a little. The slide shows steady and predictable annual improvements in revenue, underlying EBIT A, underlying EBIT DA, and the return on average capital employed, all of which are now at record levels since FY17. margins have shown growth across time but also relatively low variability EBIT A margins have progressively increased in recent years from 5.9% in FY22 to 7.3% in FY26 I am pleased to say that our efforts around trust management, efficiency and delivery of integrated lower capital services have been important drivers of margin growth You can also see the tangible results of our strategic focus on reducing the capital intensity and driving improved returns, with strong and sustained improvements in the return on average capital employed over the last five years. Slide 16 shows a summary of our profit and loss statements. I won't go through all the numbers on the slide, but I will provide some additional context to a few of the high level numbers. The 8% growth in revenue and 11% growth in underlying EBIT A were mainly attributed to the contract executions plus new work during the year from underground and civil. Earnings were driven by continuing the margin improvement, disciplined capital management and cost optimisation across the group. Growth in underlying EBITDA of 2% was lower than the 11% achieved in EBIT-A, primarily due to securing the new work in civil and underground businesses, which have a lower capital intensity. Our operating costs increased in line with revenue, albeit we started a number of new projects in this last quarter, including civil projects, which have a higher return on capital, however, slightly lower margins than received from our mining services. Our EBITDA margin was 7.3% for the year, driven by lower depreciation with the completion of two historical service projects, the Commencement of Lower Capital Working Underground and Civil, together with the operational improvements across the business in the second half. Effective borrowing cost was 6.72% at June 2026, compared to 6% for June 2025, reflecting the impact of the RBA interest rate increases that we've experienced in FY26. Our effective tax rate for the year was 30.6%, and the group retains approximately $104 million in franking credits as of 30 June 2026. Finally, as Mick mentioned earlier, the total full-year dividends was increased by 47% to 2.2 cents per share fully franked, with a far-out ratio of 41%. in line with our FY26 policy range of 30 cents to 45% of earnings per share. Slide 17 steps out the major cash flow movements between the closing net debt last year and this year. The chart shows year-on-year net debt decreasing through strong cash flow generations. Net debt of $111.1 million brings our debt levels lower than the levels pre the acquisition of Degmal. This is a significant achievement and in line with the target of net debt levels previously set, while substantially increasing returns to shareholders at the same time. Strong underlying operating cash flow before interest and tax of $387.4 million was the main driver to enable us to reduce the debt while increasing the shareholder returns. With strong working capital management, the cash conversion for the year was 98.4%, generating Free cash flow of $103.1 million Tax-related cash payments were higher than the statutory rate for the group which transitioned at the end of FY25 to a monthly taxpayer and paid the final FY25 tax instalment in December 25 together with the provisional tax payments for FY26. CapEx of $200.5 million included growth CapEx of approximately $20 million This was lower than expected for the new work winds moving towards the lower quarter of FY26, resulting in new work CapEx being moved into FY27. Our CapEx target for FY27 is sustaining capital of circa $200 million and growth capital of approximately $66 million. I'll finish with a snapshot of our year-end balance sheet on slide 18. I've already mentioned the reduction in our net debt. But you can see on this slide the breakdown of our borrowings as of 30 June 2026. And I won't go through this in detail, other than to reiterate that the business is in a very strong position with regard to available liquidity. Cash and available committed banking facilities is $566 million at the end of June 2026. And finally, Mick highlighted earlier that our FY26 return on average capital employed of 22% exceeds our previous long-term 20% target. and we are tracking well towards the new target of above 25%. Thank you for your attention and I will now hand back over to Nick before we open for questions.

Thanks Ursula. If we move to slide 20, the positive numbers we have delivered today demonstrate the success of our strategy to diversify our business and manage capital intensity. We will continue to focus on this going forward together with expanding our end-to-end service across the value chain. The charts on the slide show the progress we've made in increasing the revenue contribution from our underground and civil infrastructure businesses. We anticipate achieving our goal of underground and civil infrastructure businesses at a run rate of $750 million and $1 billion respectively by the end of FY28. I should also mention that these figures consolidate both our Australian and Indonesian operations. We anticipate our Indonesian operations in surface, underground and civil infrastructure will eventually increase from 10% of our current group revenues to contributing up to 15-20% of group revenues. We see meaningful upside and growth opportunities in the Indonesian market in the years ahead and we are driving hard to consolidate our position as a leader in that fast growing market. The resolving business mix we have today has been a key driver of improving our ROASHE to the 22% we see. You can see on the slide the opportunity to further grow underground and civil businesses, which make up more than half of our $25 billion tender pipeline. Steadily increasing the Indonesian contribution will only further increase the ROASHE key metrics. I would like to briefly comment on the order book outlined on slide 21. I mentioned in my opening remarks that it was good to see our order book stand at $5.9 billion compared to the $5.4 billion at the end of FY25. For FY26 we saw a good level of contract awards across the business, with over $1.1 billion won in the surface, close to $350 million in underground, and more than $500 million in civil infrastructure. Since the end of FY26, we've already announced significant new wings with a combined $811 million, which includes Mt Marion, Snowy River and Memre Road, generating significant momentum into FY27. The order book includes $2.2 billion of work in hand for FY26. It does not include the $240 million preferred contractor announcement made last week in relation to Medallion Metals Ravensville project and also excludes short term civil and underground term work and future contract cost escalation recovery as per our usual reporting practice. The tender pipeline remains robust at $25 billion. It is a bit higher than this time last year with opportunities for growth across all strategic areas of our business. There are $13.8 billion of outstanding tenders submitted that we expect to be awarded in the next 12 months. McMahon's capital allocation policy is summarised on slide 22. It is important to recap this and outline our structured approach as the business continued to deliver strong returns. Our policy continues to reflect the importance of balancing dividend payments to our shareholders going within our debt guide rails and retaining financial flexibility to enable the continued execution of our growth strategy. The charts on the slide show our track record and you can see that we've managed our debt within our guide rails while growing earnings per share and dividend returns to shareholders. We're well positioned to continue this policy and continue delivering these results. We feel we have met the market's expectations by achieving the 41% dividend payout ratio for FY26. Well within the target range of 30% to 45% of underlying EPS. As a result we've now changed the payout ratio target to 35% to 45%. This has been a result of our focus on strategic growth and achieving strong business performance, discipline cost and capital management and delivering on our clients expectations.

I'll conclude with some comments on the outlook on slide 23.

Consistency was a key theme in my introduction and this will also be the case in my conclusion. Our priorities for FY27 are consistent with those in FY26 and the decade before. Operate safely, continue operational improvements, drive growth in underground and civil infrastructure and work towards our increased rowarchy target while generating strong free cash flow and increased return to shareholders. We will also continue to invest in our people and in technology to build our capabilities and deliver for our customers. The outlook for FY27 remains positive. While no doubt FY27 will present its own challenges, mining activity remains robust in Australia and Indonesia and we have increased diversity in our commodity and customer exposure and our service offering. We are expanding the size and scale of our service offering. and our addressable markets by seeking to capture more upside within the mining value chain. This will help build more embedded relationships with our clients, increase revenue-generating opportunities while further diversifying the business. Our extended service offering will differentiate McMahon from our competitors as Australasia's only true life-of-mine end-to-end service provider. While we have a strong order book at $5.9 billion with $2.2 billion of work in hand already secured for FY27 and a robust tender pipeline that provides us with numerous growth opportunities, we are well placed to continue growing revenue and earnings supported by a healthy balance sheet. Releasing our guidance today for FY27 we forecast continued growth in both revenue and earnings. Revenue is in the range of $2.85 billion to $3.05 billion. and underlying EBIT A between $205 and $225 million. I am confident we are focused on executing our strategy and we remain well positioned to continue our trajectory of consistent growth. And with that I'd like to now hand back to the operator to open for questions.

Thank you Mick and as mentioned we will now begin the Q&A session. For those listening by phone and would like to ask a question, please press star followed by 1 on your telephone keypad to raise your hand and join the queue. To withdraw your questions, simply press star 1 again. When called upon, please use your handset, ensure your line is unused and be ready to ask your question. Again, that is star 1 to ask a question. And your first question comes from the line of Sammy Hussain of Baron Joey. Please go ahead.

Good presentation guys and thanks for taking questions. I have two on mine. So first of all, how should we be thinking about net interest and tax rates going forward?

Hey Sam, I'll let Ursula take that one if you like.

Hi Sam. So you'll see when you look at our net debt to debt space, our interest going forward will stay flat and what it is for 26 will go forward into 27 and then our tax Last year we made our final tax payment into FY25, so as a wholly tax payer in Australia now, you'd see our tax staying on that 30% both for the P&L as well as for the cash flow.

And the second question I had was, can you talk about the levers we should be thinking about for FY27 margin around NICs and work profiles?

Yeah, look, Tim, we expect to continue growing in civil and underground, so we're assuming that the two net each other off. Obviously, underground's a high-margin business out of the three sectors that we've got, and civil is the lower-margin business, but a lot less capex, higher roachy. So, given that, and if you look at the midpoints of the guidance that we've given, we expect all in, it will probably be something similar to what we've seen this year. We're clearly always aspiring to continue improving, and we'd love to 7.3 if you look at the two midpoints, which is similar to what we achieved in 2016.

Sounds good. That's all from me.

The next question comes from the line of Gavin Allen of Euros Heart Leeds. Please go ahead.

Good morning, team. Thanks for the preso. Just a couple from me. So just exploring that range that you put out there for 2017.

um maybe we can just unpack a little bit um so you know some of the factors that might impact you know whether you're you know lower end or in the middle or higher and is it just simply the timing of works that you and you you might hope to win yeah for sure so um uh that that that 2.2 billion that we said is secured for this year just to clarify gavin i'm pretty sure you know that it doesn't include the 1 to 150 million a year of churn that we get in underground and civil. So that is in addition to what that 2.2 is. And we tried to call out that that recent medallion medals announcement where we've been notified as being preferred, that's not included in that secured work for 27 nor the order book. Added to that, we've got a pipeline that we see some near-term opportunities coming in. And if that occurs, we feel there's an opportunity to build on that guidance range. If you look at the midpoint I think it suggests a growth in even a 13.8%. We're desperately hoping for it to be higher and of course I think it's pretty well known that in our strategy we're talking about expanding our service offering. If an opportunity presented to do that similar to Deck Mill but in an area that would enhance our service offering, we'd look at that which would have an impact as well. But if I was just to go back to the pipeline very quickly, A number of the near-term opportunities, we're one of two, or it's an extension of existing work, some of which isn't in the pipeline, or it's where we think there's a relationship or value that we can bring by having more services. I guess as an overarching comment, of the $13.8 billion we expect to be awarded this year, there's probably, without getting ahead of ourselves, a slightly higher level of confidence with a number of those projects. So, yeah, that hopefully answers your question, Gav.

Absolutely, Mike. Yeah, appreciate it.

The next question comes from the line of Cameron Bell of Canaccord Genuity. Your line is open.

Thanks. Morning, guys. Just extending on Gav's question then a little bit. So that's 13.8 billion. of tenders you think could be important this year? Can you give us a sense of maybe what portion of that is extensions versus new contracts?

Maybe, I think I know where you're heading there Cameron. Tell me if this gives you a better idea. We normally say we think there's one in three, one in four chance of winning the bids in that pipeline. I would suggest this year it's probably one in two or one in three and that includes consideration of those projects where it's an extension or we're already preferred and we haven't been able to announce under NDAs or we're one of two or there's a relationship there or we think there's a competitive advantage. I know I didn't directly answer it but does that give you a feel, Tam?

Yeah, it does. It's a similar sort of concept. And then just the other question just while we've got you on your public call. Can you maybe step through how you think about your M&A priorities at the moment?

Yeah for sure. Look it's no secret and we even spoke about it in the presentation that if we can extend our end-to-end services in the jurisdictions we're in, we think it has a significant impact on the addressable market and there's some clients that would see value in having one contractor execute more works on one site and there's energy that would come with that. We've already seen that occur in places like Cyprium, we're seeing it in Mount Carlton, we're hoping to see it with some of the clients that are near to hopefully being awarded or some contracts that are hopefully near being awarded and we think we'll be able to talk more about that moving forward. So if that's the theme you would expect you know us to push hopefully into some engineering areas and then there's some potential others on each end of what we already do which everyone can probably work out so that that's where we're looking Pam we wouldn't be looking to something that costs a lot it would all want to be debt funded and if you use the deck mill philosophy I guess in terms of scale And before we move on to the next question, a reminder if you would like to join the queue to press star 1.

And your next question is from the line of Pia Donovan of Argonaut. Please go ahead.

Thanks. Hi, Megan Urschel. Just one from me, pretty similar to Sam's in terms of margins. Firstly, just around that mining segment. So as that underground segment of that business kind of becomes a bigger portion, do you expect margins to improve there? And then also in terms of as Indonesia becomes a stronger amount of revenue, do you have any impact on margins from that as well?

Yeah, absolutely, Pierre. I mean, we've made no secrets that if you look at the activities, underground should be the higher margin component of all three. So if that increases in scale, that will absolutely bring with it an enhanced margin in that mining business. And I guess the lower capital required for underground relative to surface is attractive as well in terms of The capital intensity but also the ROARCHY which as you know is a priority for us and is pushing to 22% and ultimately 25%. In terms of Indonesia, that business, the reason we've called out we want to grow up from the 10% now, the 8% last year to the 15% to 20% is it typically brings with it higher margins, it typically brings lower risk T's and C's and it almost always brings a lot lower capex. If I could bridge to another point that I've had a few calls on this morning about the CAPEX, you'll notice that last year the CAPEX was lower. That was because the number of the jobs won during the year in Indonesia were civil which didn't require the capital. However, the work that's just been awarded this year that we did expect last year but it always moves, it's slid right, that's why the CAPEX has shifted from FY26. FI27 to enable that work to commence and it's those awards that we've put out recently. So if you look at 26 and 27 we've broadly said to the market that you should expect $242, $245 a year but what we've done is probably, well not probably, we expended just over $200 last year. We're expecting the $266 this year so net net it's still a little bit less than what we're guided to but we just wanted to make it clear that the rigour, focus and discipline around our gearing and free cash flow goals that we've made clear for 10 years now, they are unchanged. And the free cash flow generation of the business that a number of us have worked through bridges for in the coming years, they are all absolutely intact and that's where we intend to bring the business and hopefully that's a bit visible in where we've brought the net debt. But I know I did shift from the question, Pia, and I just wanted to attend to a few calls I've already had this morning. We were very lucky at the end of last year and early this year to see underground see some scale increase and last year Indonesia see a number of awards in areas where it was higher margin and higher capex but your question is why we want to get underground to 750 run rate by the end of 28 we think we'll get there a bit sooner given Last year was close to 650 and Indonesia at 15-20% of the larger business brings with it a much enhanced roachi. And without going on, we've said in the past, if we can get broadly a third, a third, a third in Australia, that will achieve the 25% roachi. Going from 25 to 30 would require the Indonesian business at that 15-20%, which is why it's the goal. But obviously it's not one then the other, they're all happening in parallel.

Yeah, thanks, Nick.

Sorry, Claire. I know I went off on a few tangents there, but I did want to attend to some calls we had this morning. Maybe we could have explained the spread of the CapEx a little bit better, but that increasing is not a sign of what's become. It's just if you accumulate the two years, it's still in line with what we tried to put out to the market last year.

Yeah, no, that's great.

Thanks.

Your next question is from retail investor Tony Greco. Please go ahead.

Hello Mick and Ursula. Thanks a lot for your presentation and again a really good result. So congratulations to yourself and all the team there at McMahon. Diverging into the capex, you've asked one question so thank you for that. So you explained the increase for next year. And you've also earlier explained that you've secured the $2.2 million but you're forecasting still $2.85 to $3 million. So you've touched on that as well. Two other questions then. Just the home ground that you announced the other day and the strategic partnership.

Were you able to just elaborate a bit more on that? Yeah, absolutely, Tony. And I appreciate the recognition of the team. We think we've got an amazing group there. But yes, home ground. We saw that as an ability to leverage that asset that we acquired with Deckville. We think it brings with it an ability to lock in the value on the Bowen Street. We think it brings an ability to have someone that's active in the area and could have a constraint around accommodation motivated to fill the camp in the coming years as they expand on that port which will be some significant works and significant heads and then for us to be able to get ourselves on the panel and in somewhat of a priority position for some of that works, we think that also will create a leveraged synergistic benefit to the business. Obviously nothing has changed in terms of how we look at that asset. We see that as being non-core but we see this as an opportunity to increase occupancy with a motivated partner, get some extra work and then at some point in the future It's still not in the strategy. It's non-core and we'll divest of it. Hopefully, at that point, it's full and it can attract a higher rate.

Yeah, no, thanks for that. Yeah, I thought the important thing there is the occupancy. If you can get that up, well, the value, of course, increases. And just the second question, just with the acquisition of Volt by, I think it's Regis, do you see anything there? Because I guess... Regis is also part of the Boston Shaker client. So do you see any changes there or the contract will still continue, et cetera, et cetera?

Yeah, look, that Regis offer has now been superseded by a superior offer from Genesis, Tony. So, look, we're planning for those contracts to end as announced. If anyone wants us to look at something else, we would. But the reason the order book and the pipeline are where they sit is because we're planning for us not to have them. If anything changes, as always, we'll look at it and we'll do whatever makes sense. But at the moment, we're planning for those to finish on the dates that have been announced.

Okay, yeah, well thanks for the update.

Yeah, you're right.

I mean, I wasn't looking at that closely other than the fact that I realised that, you know, Kingdom Fuels and Deja Milano are bolt on, so I did wonder. So I was sad to see if that finishes, but anyway, we'll keep our fingers crossed that there'll be a lot more work coming up. All right, thank you for that. Oh, and the other question, just with the diesel supply and the price increase and that, how do you see that working out? Obviously, we all would like to... The war to be over as soon as possible, but it doesn't look like it's going to happen.

Yeah, look, so far the diversity in the portfolio has enabled us to navigate through that. It's not easy. We don't want to win at the expense of our clients and we want to support them. But so far we've been able to work with our clients and navigate through that. So only the diversity of the portfolio helps. But yeah, it's not without its challenges for sure.

Okay, thank you for that. Congratulations again and thank you to the whole team.

Thanks Tony. And that does conclude our Q&A session for today. I would like to hand back over to Mick for closing remarks.

Yeah, thanks Paulie. Thanks to everyone that joined the call. Over the next few days we'll be seeing a number of you but if there's anyone that would like to meet that's not on the list, please give myself or Tony a call and and we'll make sure we make the time to catch up. As always, we appreciate the support and we look forward to explaining your intention and the results more clearly over the coming week.

This concludes today's conference call. Thank you all for joining us.

You may now disconnect.