Full Year 2026 The Environmental Group Ltd Earnings Call

August 18, 2026

Speaker #1: Thank you for standing by, and welcome to The Environmental Group Limited FY26 financial results presentation. There will be a presentation followed by a question-and-answer session.

Operator: Thank you for standing by, and welcome to The Environmental Group Limited FY26 financial results presentation. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to enter it into the Ask a Question box and click Submit. I would now like to hand the conference over to Jason Dixon, CEO. Please go ahead.

Operator: Thank you for standing by, and welcome to The Environmental Group Limited FY 2026 financial results presentation. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to enter it into the Ask a Question box and click Submit. I would now like to hand the conference over to Jason Dixon, CEO. Please go ahead.

Speaker #1: If you wish to ask a question, you will need to enter it into the Ask a Question box and click Submit. I would now like to hand the conference over to Jason Dixon, CEO.

Speaker #1: Please go ahead.

Speaker #2: Thank you. Good morning, everyone, and welcome to the financial year '26 results presentation for the Environmental Group. I'm joined today by Gareth Nicholls, the CFO, and Paul Gasket, the Chief Commercial Officer.

Jason Dixon: Good morning, everyone, and welcome to the financial year 2026 results presentation for The Environmental Group. I am joined today by Gareth Nicholls, the CFO, and Paul Gaskett, the Chief Commercial Officer. Gareth will talk to some numbers and if you got any questions, Paul will be able to certainly address your issues with PFAS. As we move through the presentation, I welcome questions at the end. Tough year, as you all know, with some unexpected events that took place around the world that impact our business we could control, and then others within, that we should have had more control over. But at the end of the day, I am pleased to say that we met the revised guidance that we put out to the market earlier this half.

Jason Dixon: Good morning, everyone, and welcome to the financial year 2026 results presentation for The Environmental Group. I am joined today by Gareth Nicholls, the CFO, and Paul Gaskett, the Chief Commercial Officer. Gareth will talk to some numbers and if you got any questions, Paul will be able to certainly address your issues with PFAS. As we move through the presentation, I welcome questions at the end. Tough year, as you all know, with some unexpected events that took place around the world that impact our business we could control, and then others within, that we should have had more control over. At the end of the day, I am pleased to say that we met the revised guidance that we put out to the market earlier this half.

Speaker #2: Gareth will talk some numbers and has some questions. Paul will certainly be able to address your issues with PFAS. As we move through the presentation, I'll welcome questions at the end.

Speaker #2: So, tough year, as you all know, with some unexpected events that took place around the world that impacted our business—events we couldn't control. And then others within that, we should have had more control over.

Speaker #2: But, at the end of the day, I'm pleased to say that we met the revised guidance that we put out to the market earlier this half. Revenue, I guess, being flat year-on-year is really a reflection of the Baltic customers and some of the delays we had with events in the Middle East.

Jason Dixon: Revenue, I guess flat year-on-year is really a reflection of the Baltec customers and some of the delays we had with the events in the Middle East. ERP now thankfully is operating functionally. We still have room for improvement and efficiencies to put through, but it is operating as it should, and the system is far more efficient, accurate, and performing as it should have done. Significantly, and I guess something we haven't spoken broadly about, is the strength that we brought to the management team this year. The business has grown substantially from turning over AUD 40 million to AUD 110 million. We have introduced a new CEO of EGL Baltec, during this period. We have obviously brought on Gareth Nicholls as new CFO, who has worked very hard on trying to get the systems in place and make sure we have got the correct process and procedures.

Speaker #2: ERP now, thankfully, is operating functionally. We still have room for improvement and efficiencies to put through, but it's operating as it should, and the system is far more efficient, accurate, and performing as it should have done.

Speaker #2: Significantly, and I guess something we haven't spoken broadly about, is the strength that we brought to the management team. This year, the business has grown substantially—from doing a sort of $40 million to $110 million.

Speaker #2: We've introduced a new CEO of EGL Baltic, and during this period, we've also brought on Gareth Nicholls as the new CFO. He's worked very hard on trying to get the systems in place and make sure we've got the correct processes and procedures.

Speaker #2: And Kirill, who was head of engineering, is also taking over as General Manager of TAPC. So, very significant management changes within the business and a real strengthening of that management team during this period.

Jason Dixon: Kiril, who was head of engineering, has also taken over as General Manager of TAPC. Very significant management changes within the business and a real strengthening of that management team during this period. In just summary, as I said, revenue is flat, basically on PCP at AUD 112 million. EBITDA came within our guidance at AUD 8.7 million. Pleasingly again, 419,000 hours worked up on about 380,000 last year. We had one very minor LTI, which is a laceration to a finger, but for 419,000 hours, we can always do better, but a good result. PFAS that Paul will talk to you later on. We are getting a lot more traction now. We are really looking forward to the expansion of that business.

Speaker #2: So, in this summary, as I said, revenue is flat, basically, on PCP at $112 million. EBITDA came within our guidance at $8.7 million. Pleasingly, again, 419,000 hours worked, up on about 380,000 last year.

Speaker #2: We had one very minor LTI, which was a laceration to a finger, but 419,000 hours. We can always do better, but it's a good result.

Speaker #2: PFAS, that Paul will talk to later on, we're getting a lot more traction now. We're really looking forward to the expansion of that business.

Speaker #2: And we treated over 5 million liters of PFAS-contaminated water during that period. At the same time, we maintained all of our global certifications to deal with clients such as Siemens and our larger overseas clients that require those certifications.

Jason Dixon: We treated over 5 million liters of PFAS chemicals during that period, at the same time maintained all of our global certifications to deal with clients such as Siemens and our larger overseas clients that require those for. Importantly, Gareth is going to take you through an earnings bridge to talk about the results and how it was structured for FY26. I guess just provide some comfort as to what has happened and where we are now up to within the business. I will hand over to Gareth to talk to you about the numbers.

Speaker #2: So, importantly, Gareth's going to take us now through an earnings bridge, just to talk about the results and how it was structured for FY26—and I guess just provide some comfort as to what's happened and where we're now up to within the business.

Speaker #2: So, I'll hand over to Gareth to talk to you about the numbers.

Speaker #3: Thanks, Jason. As Jason just mentioned, FY26 was a disappointing year from an EBITDA perspective. We entered the year expecting to build on the strong growth achieved over recent years.

Gareth Nicholls: Thanks, Jason. As Jason just mentioned, FY26 was a disappointing year from an EBITDA perspective. We entered the year expecting to build on the strong growth achieved over recent years. However, as outlined in our trading update, performance was impacted by a combination of factors, including disruption associated with the Middle East conflict and challenges following the implementation of our new ERP system. Thankfully, most of those ERP-related issues are now resolved. We recognized AUD 10.8 million of significant items, including a AUD 5.7 million impairment of the Airtight business. Structural changes in the Airtight market reduced the carrying value of the business, while delays in legal proceedings result in a charge having to be taken in relation to an owner's contract inherited as part of the acquisition of that business. Legal proceedings relating to the owner's contract are ongoing, with a substantial recovery being pursued.

Speaker #3: However, as outlined in our trading update, performance was impacted by a combination of factors, including disruption associated with the Middle East conflict, and challenges following the implementation of our new ERP system.

Speaker #3: Thankfully, most of those ERP-related issues are now resolved. We recognize $10.8 million of significant items, including a $5.7 million impairment of the Air Type business.

Speaker #3: Structural changes in the Air-type market reduced the carrying value of the business, while delays in legal proceedings resulted in a charge having to be taken in relation to an onerous contract inherited as part of the acquisition of that business.

Speaker #3: Legal proceedings relating to the onerous contractor are ongoing, with a substantial recovery being pursued. To that extent, a contingent asset has been disclosed in the annual reports in relation to the potential recovery, but no asset has been recognized as at 30 June.

Gareth Nicholls: To that extent, a contingent asset has been disclosed in the annual report in relation to the potential recovery, but no asset has been recognized as at 30 June. Do you want to go to the next slide, please, Jason?

Speaker #3: Go to the next slide, please, Jason.

Speaker #2: Yep. Oops, sorry. There we go.

Jason Dixon: Yep. Oh, sorry. There we go.

Gareth Nicholls: Despite revenue being broadly flat year on year, we continue to strengthen the quality of our revenue base with recurring revenue increasing to AUD 61.9 million. Over the past five years, the group has delivered substantial growth, supported by both organic initiatives and strategic acquisitions. This recurring revenue foundation provides great resilience in future earnings. Next slide, please. More than 55% of FY26 revenue was recurring or contracted in nature, providing a strong foundation for the group. EGL Energy continues to be the largest contributor to this recurring revenue base. We remain focused on increasing recurring revenue across the group, which will further enhance earnings stability. I will now pass back to Jason.

Speaker #3: So, despite revenue being broadly flat year-on-year, we continue to strengthen the quality of our revenue base, with recurring revenue increasing to $61.9 million.

Speaker #3: Over the past five years, the group has delivered substantial growth, supported by both organic initiatives and strategic acquisitions. This recurring revenue foundation provides great resilience in future earnings.

Speaker #3: Next slide, please. More than 55% of FY26 revenue was recurring or contracted in nature, providing a strong foundation for the Group. EGL Energy continues to be the largest contributor to this recurring revenue base.

Speaker #3: We remain focused on increasing recurring revenue across the Group, which will further enhance earnings stability. I'll now pass back to Jason.

Speaker #2: Thanks, Gareth. I'll take you through the operating divisions now, how their performance was for FY26, and how we're seeing the early days of FY27.

Jason Dixon: Thanks, Gareth. I will take you through the operating divisions now and how their performance was for FY26 and how we are seeing the early days of FY27. I will start off with EGL Energy, which is obviously our boiler business, where we are using steam mainly for the function of sterilization. It is an essential service used throughout any food productions, hospitals, anywhere you need sterilization processes. Acquisition has gone very well as Advanced Boilers & Combustion from for over a year ago now, probably a year and a half ago now. They have integrated into the business really well, which has been terrific to see. Revenue, good growth again, up to AUD 64.5 million, up 20%. Gross profit increased another AUD 3.4 million, up 21%.

Speaker #2: So, I'll start off with EGL Energy, which is obviously our boiler business, where we're using steam mainly for the function of sterilization. It's an essential service used throughout any food production, hospitals, anywhere you need sterilization processes.

Speaker #2: Acquisition has gone very well of ABC, Advanced Boilers and Combustion, from over a year ago now—probably a year and a half ago now.

Speaker #2: They've integrated into the business really well, which has been terrific to see. So, revenue showed good growth again, up to $64.5 million, up 20%. Gross profit increased another $3.4 million, up 21%.

Speaker #2: You'll note, as we've spoken about a few months ago now, that EBITDA was down marginally to $7 million, mainly due to the impact of the ERP system issues that we had with invoicing at the time, and also the fuel price.

Jason Dixon: You will note, as we have spoken about a few months ago now, that EBITDA was down marginally to AUD 7 million, mainly due to the impact of the ERP system issues that we had with invoicing at the time and also the fuel price. We have got about 133 vehicles in our fleet. Ballpark, they are doing 150km a day. We are doing 22,000, 23,000 kilometers a day in our fleet. Certainly the massive increase in the diesel price had a significant influence before we were able to put through changes in our travel costs within that business. Service revenue grew from about AUD 41 million up to AUD 47 million, now 73% of the entire revenue within that business. The business remained very strong in its underlying performance.

Speaker #2: We've got about 133 vehicles in our fleet. Ballpark, if they're doing 150 Ks a day, we're doing 22 to 23 thousand kilometers a day in our fleet.

Speaker #2: So, certainly, the massive increase in the diesel price had a significant influence before we were able to put through changes in our travel costs within that business.

Speaker #2: Service revenue grew from about $41 million up to $47 million, now representing 73% of the entire revenue within that business. So, the business remained very strong in its underlying performance.

Speaker #2: It met its budget expectations on revenue, and it was just purely that issue we had with the invoicing and the performance. During that second half, it impacted the EBITDA, but I'm pleased to say that the business is trading normally again now and in line with expectations post the rectification of some of the issues with the ERP system.

Jason Dixon: It met its budget expectations on revenue, and it was just purely that issue we had with the invoicing and the performance during that second half that impacted the EBITDA. I am pleased to say that the business is trading normally again now and in line with expectations post the rectification of some of the issues with the ERP system. E-boiler sales have been particularly strong in early financial year 2027, which has been great to see. The Fulton product sales and service expansion continues to be strong for Tomlinson's. That range that we brought in, the smaller scale boilers, sort of 2 megawatts and lower, has gone very well. As I mentioned, I could not be more pleased with the acquisition of Advanced Boilers & Combustion. They have increased the scale of our business and broadened the products and service capabilities.

Speaker #2: Ear Boiler sales have been particularly strong in early financial year '27, which has been great to see. The Fulton product sales and service expansion continues to be strong for Tomlinson's.

Speaker #2: That range that we brought in—the smaller-scale boilers, sort of 2 megawatts and lower—has gone very well. As I mentioned, I couldn't be more pleased with the acquisition of Advanced Boilers and Combustion.

Speaker #2: They've increased the scale of our business and broadened the product and service capabilities. So, they're doing a lot of additional work for us now.

Jason Dixon: They are doing a lot of additional work for us now. They are manufacturing our PFAS separation tanks, control panels across the business, tanks and vessels, and other structurals. Great culture within that business where they have been very good at being able to assist the other parts of the business to make sure that we are getting all of the margin maintained in-house. Very pleased with how that acquisition has gone. Just move on to waste now, and I am sure at the end, Paul Gaskett can answer any further questions you have on PFAS. But it has truly been, for me, an exciting period, and especially exciting last, I guess, 6 to 8 months within that PFAS treatment business as we have learned more about the technology, its application around the marketplace. From a pure financial view, revenue up to AUD 5 million.

Speaker #2: They're manufacturing our PFAS separation tanks, control panels across the business, tanks and vessels, and other structures. Great culture within that business, where they've been very good at being able to assist the other parts of the business to make sure that we're getting all of the margin maintained.

Speaker #2: In-house. So, very pleased with how that acquisition's gone. I'll just move on to waste now, and I'm sure at the end Paul can answer any further questions you have on PFAS.

Speaker #2: But it's truly been, for me, an exciting period—and especially an exciting last, I guess, six to eight months within that PFAS treatment business—as we've learned more about the technology and its application around the marketplace.

Speaker #2: So, from a pure finance view, bringing up to $5 million. So, we've grown that business from nothing a few years ago up to $5 million now.

Jason Dixon: We have grown that business from nothing a few years ago to AUD 5 million now. I would not worry about the gross margin too much. It is purely depending on the timing of when we get commissions on Timix sales. But the focus really now is developing that PFAS side of the business. Patent technology protected across Australia, US, and Europe. R&D investment has broadened the range of waste streams that we can treat. Most of you will be aware that we built a simulation plant close to 1 year ago now, where we could put in waste streams from the marketplace and test them to see what would happen out of our commercial scale plants. That is absolutely accurate and simulation plant. We have been able to prove that we have done a much broader base of PFAS treatment across water, soil, and biosolids.

Speaker #2: I wouldn't worry about the gross margin too much. It's purely depending on the time you have when we get commissions on too many sales.

Speaker #2: But the focus really now is developing that PFAS side of the business. It's a patented technology, protected across Australia, the US, and Europe. R&D investment has broadened the range of waste streams that we can treat.

Speaker #2: So, most of you will be aware that we built a simulation plant close to a year ago now, where we could put in waste streams from the marketplace and test them to see what would happen out of our commercial-scale plants.

Speaker #2: That is absolutely accurate, and simulation plant. And we've been able to prove that we've done a much broader base of PFAS treatment across water, soil, and biosolids.

Speaker #2: So, that's been a big move forward for the group. Previously, as you'd be aware, we'd really focused on water—and water from industrial waste streams and landfill leachates.

Jason Dixon: That has been a big move forward for the group. Previously, as you would be aware, we have really focused on water and water from industrial waste streams and landfill leachates. To be able to broaden that out has given us a much, much bigger addressable market, and very applicable in other parts of the globe as well. By way of example, PFAS contaminated biosolids in the US is quite a big deal now, and it is opening up those very, very large markets for us to enter. The capability has really given us the potential to improve the beneficial reuse outcomes. Avoiding landfill or specialist disposal and reducing those disposal costs for our clients. One of the key learnings we had from a recent trip to the US is mobile treatment plants capability is very important for rapid deployment within that marketplace.

Speaker #2: To be able to broaden that out has given us a much, much bigger addressable market, and it's very applicable in other parts of the globe as well.

Speaker #2: So, by way of example, PFAS-contaminated biosolids in the US are quite a big deal now, and it's opening up those very, very large markets for us to enter.

Speaker #2: So, the capability has really given us the potential to improve beneficial reuse outcomes by avoiding landfill or specialist disposal, and reducing those disposal costs for our clients.

Speaker #2: One of the key learnings we had from a recent trip to the US is that mobile treatment plants capability is very important for rapid deployment.

Speaker #2: Within that marketplace, we've got those very large waste companies going from site to site and treating, for example, a landfill leachate on those ponds over what can potentially be tens, if not hundreds, of sites within those very large companies.

Jason Dixon: And where you have got those very large waste companies going from site to site and treating, for example, a landfill leachate on those ponds over, and what can potentially be tens of, if not hundreds of sites within those very large companies. That was a further development we pushed ahead with. As I mentioned, the increase in those waste streams materially increased our addressable market, and the global presence of the PFAS contamination, looking for PFAS solutions, and we are very pleased to expand what we can now treat and the manner in which we can do it. It was a period of really, really great development for our PFAS technology, and broadening those commercial applications. As I mentioned to you earlier, we have just had Paul Gaskett and others in the US talking about global market development strategies and meeting with some very large US companies and other international companies.

Speaker #2: So, that was a further development we pushed ahead with. As I mentioned, the increase in those waste streams materially increases our addressable market, and with the global presence of PFAS contamination looking for PFAS solutions, we're very pleased to expand what we can now treat and manage, and the way in which we can do it.

Speaker #2: So, it was a period of really, really great development for our PFAS technology and broadening those commercial applications. As I mentioned a few earlier, we've just had Paul and others in the US talking about global market development strategies and meeting with some very large US companies and other international companies.

Jason Dixon: As I mentioned to you earlier, we have just had Paul Gaskett and others in the US talking about global market development strategies and meeting with some very large US companies and other international companies. Pleased with how we are now developing that segment, and I would like to think that that will grow in the importance as part of our business going forward. I will just move now on to EGL Baltec. Reasonably tough period for Baltec in the H2. The impacts came through from the Middle East. The business, as you know, it is a global business where we are agnostic to where we operate around the world. In this particular last half, we actually had three jobs within that region that got impacted in one way or another by what transpired in the Middle East.

Speaker #2: So, we're pleased with how we're now developing that segment, and I'd like to think that will grow in importance as part of our business going forward.

Jason Dixon: Pleased with how we are now developing that segment, and I would like to think that that will grow in the importance as part of our business going forward. I will just move now on to EGL Baltec. Reasonably tough period for Baltec in the H2. The impacts came through from the Middle East. The business, as you know, it is a global business where we are agnostic to where we operate around the world. In this particular last half, we actually had three jobs within that region that got impacted in one way or another by what transpired in the Middle East. Revenue, as we mentioned a few months ago, was down about AUD 7 million to AUD 8 million below expectations. A couple of jobs that suffered delays in the Middle East have now been sorted out. We had a job going to Iraq.

Speaker #2: I'll just move now on to EGL Baltic. It was a reasonably tough period for Baltic in the second half. The impacts came through from the Middle East.

Speaker #2: The business, as you know, is a global business where we're agnostic to where we operate around the world. In this particular half—last half—we actually had three jobs within that region that got impacted in one way or another by what transpired in the Middle East.

Speaker #2: So, revenue, as we mentioned a few months ago, was down about $7–8 million below expectations. A couple of jobs that suffered delays in the Middle East have now been sorted out.

Jason Dixon: Revenue, as we mentioned a few months ago, was down about AUD 7 million to AUD 8 million below expectations. A couple of jobs that suffered delays in the Middle East have now been sorted out. We had a job going to Iraq. The client had enormous problems getting there, as you can well imagine. There was another client's project going to that part of the world, but we also could not get to the client site. They have both been sorted out now. The project in Iraq is now on site. The other one is in transport into, I think it is Uzbekistan. That is all been completed. I am pleased to say that we did manage to increase the margin during that period, despite what happened with the delays within those projects.

Speaker #2: So, we had a job going to Iraq that the client had enormous problems getting there, as you can well imagine. And there was another client's project going to that part of the world that we also couldn't get to the client site.

Jason Dixon: The client had enormous problems getting there, as you can well imagine. There was another client's project going to that part of the world, but we also could not get to the client site. They have both been sorted out now. The project in Iraq is now on site. The other one is in transport into, I think it is Uzbekistan. That is all been completed. I am pleased to say that we did manage to increase the margin during that period, despite what happened with the delays within those projects. We also had another project delayed in its completion because we could not get parts out of Europe into our manufacturing facilities because of what happened in the Strait of Hormuz, and what also happened within the closure of the Suez Canal to commercial traffic, that is now resolved as well.

Speaker #2: They've both been sorted out now. The project in Iraq is now on-site. The other one's in transport into, I think it's Uzbekistan. So that's all been completed.

Speaker #2: I'm pleased to say that we did manage to increase the margin during that period, despite what happened with the delays within those projects. We also had another project delayed, and its completion, because we could not get parts out of Europe into our manufacturing facilities because of what happened in the Straits of Hormuz, and what also happened with the closure of the Suez Canal to commercial traffic, which is now resolved as well.

Jason Dixon: We also had another project delayed in its completion because we could not get parts out of Europe into our manufacturing facilities because of what happened in the Strait of Hormuz, and what also happened within the closure of the Suez Canal to commercial traffic, that is now resolved as well. What is really important is we have had Rob Tingle join us as General Manager of Baltec. He has got a lot of industry experience within the power industry, coming from a very, very large company background and is already implementing changes to processes and systems within the business that I think will see not only a better quality product for our clients, but an improvement on project delivery coming through. The macro view is the demand for gas turbines in the US remains unprecedented. It is driven by data centers seeking to secure their own power supply generation.

Speaker #2: What is really important, as we've had Rob Chignol join us as General Manager of Baltic, is that he's got a lot of industry experience within the power industry.

Jason Dixon: What is really important is we have had Rob Tingle join us as General Manager of Baltec. He has got a lot of industry experience within the power industry, coming from a very, very large company background and is already implementing changes to processes and systems within the business that I think will see not only a better quality product for our clients, but an improvement on project delivery coming through. The macro view is the demand for gas turbines in the US remains unprecedented. It is driven by data centers seeking to secure their own power supply generation. As you can imagine, previously, power was just coming in off the grid. They now want the power behind the gate with their own turbines, so that has seen a significant change within the marketplace.

Speaker #2: Coming from a very, very large company background, and having already implemented changes to processes and systems within the business, I think we'll see not only a better quality product for our client, but also improvements in project delivery coming through.

Speaker #2: So, the macro view is the demand for gas turbines in the U.S. remains unprecedented. It's driven by data centers seeking to secure their own power supply generation.

Speaker #2: So, as you can imagine, previously, power was just coming in off the grid. They now want the power behind the gate with their own turbines.

Jason Dixon: As you can imagine, previously, power was just coming in off the grid. They now want the power behind the gate with their own turbines, so that has seen a significant change within the marketplace. We are seeing record high turbine orders, but being redirected into the US from other global markets, which is an interesting change within that market. I guess in response to that, we signed an agency agreement within the US in a key hub in the Midwest for engineering procurement to make sure that we are involved heavily in that market and understanding what is going on in that marketplace. Currently, we are now quoting a number of jobs in the US on RFQs in that data center marketplace. I think we might have three or four we are currently in tender for. That strategy has worked quite well.

Speaker #2: So, that's seen a significant change within the marketplace. We're seeing record-high turbine orders, but they're being redirected into the US from other global markets, which is an interesting change within that market.

Jason Dixon: We are seeing record high turbine orders, but being redirected into the US from other global markets, which is an interesting change within that market. I guess in response to that, we signed an agency agreement within the US in a key hub in the Midwest for engineering procurement to make sure that we are involved heavily in that market and understanding what is going on in that marketplace. Currently, we are now quoting a number of jobs in the US on RFQs in that data center marketplace. I think we might have three or four we are currently in tender for. That strategy has worked quite well. Obviously, the expansion of renewable energy keeps increasing the need for gas turbines, and they operate flexibly, of course, with other renewables now, so you can operate in both peaking and base load applications.

Speaker #2: So, I guess, in response to that, we've started well. We signed an agency agreement within the US and a key hub in the Midwest for engineering procurement to make sure that we're involved heavily in that market and understanding what's going on within that marketplace.

Speaker #2: Currently, we're quoting a number of jobs in the US on RFQs in that data center marketplace. I think we might have three or four we're currently in tender for.

Speaker #2: So, that strategy's worked quite well. Obviously, the expansion of renewable energy keeps increasing the need for gas turbines, and they operate flexibly, of course, with other renewables now.

Jason Dixon: Obviously, the expansion of renewable energy keeps increasing the need for gas turbines, and they operate flexibly, of course, with other renewables now, so you can operate in both peaking and base load applications. Our proprietary silencer technology remains a key differentiator that we can do that noise attenuation of peaking load turbines and get a very, very durable product throughout that type of operating functionality. Look forward to hopefully end of the conflicts in the Middle East and that market returning to normal for us. I am just on EGL Clean Air. In line with the expectations that we had, revenue roughly flat year on year. Gross margin remains strong at 36%, which I guess demonstrates the technologies that we have and how they are well-placed within the market.

Speaker #2: So, operating both peaking and baseload applications—our proprietary science and technology remains a key differentiator in that we can handle the noise accentuation of peaking load turbines and get a very, very durable product throughout that type of operating functionality.

Jason Dixon: Our proprietary silencer technology remains a key differentiator that we can do that noise attenuation of peaking load turbines and get a very, very durable product throughout that type of operating functionality. Look forward to hopefully end of the conflicts in the Middle East and that market returning to normal for us. I am just on EGL Clean Air. In line with the expectations that we had, revenue roughly flat year on year. Gross margin remains strong at 36%, which I guess demonstrates the technologies that we have and how they are well-placed within the market. Much better results in the H2. EBITDA increasing by 84% compared to the H1. We secured a major contract with Pensana that was around AUD 9 million for the scrubbing of gases from a rare earth offtake system that is being built in Angola.

Speaker #2: So, we look forward to, hopefully, the end of the conflicts in the Middle East and that market returning to normal for us. I'm just on EGL Clean Air.

Speaker #2: So, in line with the expectations that we had: revenue was roughly flat year on year. Gross margin remains strong at 36%, which I guess demonstrates the technologies that we have and how they're well placed within the market.

Speaker #2: Much better results in the second half, with EBITDA increasing by 84% compared to the first half. We secured a major contract with Pensana that was around $9 million for the scrubbing of gases from a rare earth offtake system that's being built in Angola.

Jason Dixon: Much better results in the H2. EBITDA increasing by 84% compared to the H1. We secured a major contract with Pensana that was around AUD 9 million for the scrubbing of gases from a rare earth offtake system that is being built in Angola. As I mentioned earlier, Carol Linton appointed General Manager of Total Air Pollution Control, after a long time with the group as Head of Engineering and has brought a very strong discipline into that business, which has been terrific to see. Clean Air still has a very good reputation in the air pollution control market, process optimization and compliance solutions. As Gareth Nicholls mentioned, we did take an impairment charge against Airtight Solutions, just writing down the goodwill as part of that acquisition.

Speaker #2: And as I mentioned earlier, Kirill Ninton was appointed General Manager of TAPC after a long time with the group as Head of Engineering and has brought a very, very strong discipline into that business, which has been terrific to see.

Jason Dixon: As I mentioned earlier, Carol Linton appointed General Manager of Total Air Pollution Control, after a long time with the group as Head of Engineering and has brought a very strong discipline into that business, which has been terrific to see. Clean Air still has a very good reputation in the air pollution control market, process optimization and compliance solutions. As Gareth Nicholls mentioned, we did take an impairment charge against Airtight Solutions, just writing down the goodwill as part of that acquisition. As I think Gareth Nicholls mentioned, it is subject to legal proceedings, so I will not say too much, but there is continued assets going into the notes of the accounts. We are very confident that that will be a successful litigation process for us, and hopefully it will be a good return of funds for the business, once that is completed.

Speaker #2: So, Clean Air has still got a very good reputation in the air pollution control market—process optimization and compliance solutions. As Gareth mentioned, we did take an impairment charge against Airtite, just writing down the goodwill as part of that acquisition.

Speaker #2: As Gareth mentioned, it is subject to legal proceedings, so I won't say too much, but there's continued assets going on, too, are going into the notes of the accounts.

Jason Dixon: As I think Gareth Nicholls mentioned, it is subject to legal proceedings, so I will not say too much, but there is continued assets going into the notes of the accounts. We are very confident that that will be a successful litigation process for us, and hopefully it will be a good return of funds for the business, once that is completed. I guess the really important part is we completed a major dust control system within the grain sector. It was the project inherited from the Airtight Solutions acquisition, and it was largely delayed, as we had to review the complexities and make sure that we could deliver what the client asked for. It has ended up being an absolutely fantastic project. Great praise from the client about how we brought it together and made it work, the professionalism, the technical capability we showed through that.

Speaker #2: We're very confident that that will be a successful litigation process for us, and hopefully it'll be a good return of funds for the business once that's completed.

Speaker #2: I guess a really important part is we completed a major dust control system within the grain sector. It was a project inherited from the Airtite acquisition, and it was largely delayed as we had to review the complexities and make sure that we could deliver what the client asked for.

Jason Dixon: I guess the really important part is we completed a major dust control system within the grain sector. It was the project inherited from the Airtight Solutions acquisition, and it was largely delayed, as we had to review the complexities and make sure that we could deliver what the client asked for. It has ended up being an absolutely fantastic project. Great praise from the client about how we brought it together and made it work, the professionalism, the technical capability we showed through that. I would expect this will lead to a significant amount of work going forward now in the grain sector. What was difficult to deal with in the acquisition, I suspect will be of long-term benefit to our shareholders from here. I will just talk to the outlook quickly now. We would expect EBITDA to increase on the prior comparable period.

Speaker #2: It’s ended up being an absolutely fantastic project—great praise from the client about how we’ve brought it together and made it work. The professionalism and technical capability that we showed through that.

Speaker #2: So, I'd expect this will lead to a significant amount of work going forward now in the grain sector. So, what was difficult to deal with in the acquisition, I suspect, will be a long-term benefit to our shareholders from here.

Jason Dixon: I would expect this will lead to a significant amount of work going forward now in the grain sector. What was difficult to deal with in the acquisition, I suspect will be of long-term benefit to our shareholders from here. I will just talk to the outlook quickly now. We would expect EBITDA to increase on the prior comparable period. You will of course hopefully see growth with improved margins and improved margins back within the Energy business now that is obviously trading in more normal fashion. We will continue to grow that one EGL culture to sell multiple services to service lines across the customer group. It is quite common now that we are doing the boilers, the pollution control systems now, the combustion systems for large industrial clients.

Speaker #2: So, I've just talked to the outlook quickly now. So, we'd expect EBITDA to increase on the prior comparable period. You'll, of course, hopefully see growth with improved margins, and improved margins back within the energy business now. That's obviously trading.

Jason Dixon: You will of course hopefully see growth with improved margins and improved margins back within the Energy business now that is obviously trading in more normal fashion. We will continue to grow that one EGL culture to sell multiple services to service lines across the customer group. It is quite common now that we are doing the boilers, the pollution control systems now, the combustion systems for large industrial clients. That strategy of really bringing all of our business units to the one client has continued to be a very good driver of our revenue growth. As Gareth Nicholls mentioned, 55% of our revenue is now recurring. That is 73% to 74% within that Energy business. It is making us a much stronger and more reliable earnings stream over time. We will continue to focus on that. EGL Energy has had a strong start to the year with boiler sales, and as I mentioned, should see improved EBITDA margins.

Speaker #2: In more normal fashion, we'll continue to grow that one EGL culture to sell multiple services to service lines across the customer group. It's quite common now that we're doing the boilers, the pollution control systems now, the combustion systems, the large industrial clients.

Speaker #2: So, that strategy of really bringing all of our business units to the one client has continued to be a very good driver of our revenue growth.

Jason Dixon: That strategy of really bringing all of our business units to the one client has continued to be a very good driver of our revenue growth. As Gareth Nicholls mentioned, 55% of our revenue is now recurring. That is 73% to 74% within that Energy business. It is making us a much stronger and more reliable earnings stream over time. We will continue to focus on that. EGL Energy has had a strong start to the year with boiler sales, and as I mentioned, should see improved EBITDA margins. EGL Waste Services, as I mentioned, certainly the PFAS treatment plant sales are gaining traction. We have a couple away in recent months and hopefully opening up that international markets will drive strong sales growth from here. Baltec, as I mentioned, the macro outlook is very strong, but a little bit of uncertainty around timing with certain events around the world.

Speaker #2: As Gareth mentioned, 55% of our revenue is now recurring. It's 73%–74% within that energy business. So, it's making us a much stronger and more reliable earnings stream over time.

Speaker #2: We'll continue to focus on that. EGL Energies had a strong start to the year with boiler sales and, as I mentioned, should see improved EBITDA margins.

Speaker #2: EGL Waste Services, as I mentioned, certainly the PFAS treatment plant sales are gaining traction. We've secured a couple in recent months, and hopefully opening up those international markets will drive strong sales growth from here.

Jason Dixon: EGL Waste Services, as I mentioned, certainly the PFAS treatment plant sales are gaining traction. We have a couple away in recent months and hopefully opening up that international markets will drive strong sales growth from here. Baltec, as I mentioned, the macro outlook is very strong, but a little bit of uncertainty around timing with certain events around the world. We should see growth again in Air with that major rare earth contract win that we have had. Looking forward to a better FY27. Obviously FY26 was pretty rough and I guess as the management team, we did not feel like we could take a trick, but we have worked extremely hard to strengthen up that management team and to make sure that the business continues to perform as best as we can into the future.

Speaker #2: Baltic, as I mentioned, the macro outlook is very strong, but there's a little bit of uncertainty around timing with certain events around the world. We should see growth again in Air with that major rare earth contract win that we've had.

Jason Dixon: We should see growth again in Air with that major rare earth contract win that we have had. Looking forward to a better FY27. Obviously FY26 was pretty rough and I guess as the management team, we did not feel like we could take a trick, but we have worked extremely hard to strengthen up that management team and to make sure that the business continues to perform as best as we can into the future. Moderator, I am happy to hand over to you and respond to some questions.

Speaker #2: So, looking forward to a better financial year '27. Obviously, financial year '26 was pretty rough, and I guess the management team didn't feel like we could take a trick, but we've worked extremely hard to strengthen up that management team.

Speaker #2: And to make sure that the business continues to perform as best as we can into the future. So, Moderator, I'm happy to hand over to you and respond to some questions.

Jason Dixon: Moderator, I am happy to hand over to you and respond to some questions.

Speaker #1: Thank you. If you wish to ask a question, please type your question into the Ask a Question box and click Submit. The first webcast question is: Please go into more detail about your PFAS global market development strategy.

Operator: Thank you. If you wish to ask a question, please type your question into the Ask a Question box and click Submit. The first webcast question is: "Please go into more detail about your PFAS global market development strategy. What is the most efficient way to monetize this technology, and when do you expect it to make a material impact on the profitability of EGL?

Speaker #1: What is the most efficient way to monetize this technology, and when do you expect it to make a material impact on the profitability of EGL?

Speaker #2: So, it's been a really interesting journey over the last 12 months, and especially having that simulation plant, which clearly gave us an indication of just how robust the technology is, and how flexible it could be over various waste streams.

Jason Dixon: It has been a really interesting journey over the last 12 months, and especially having that simulation plant, which clearly gave us an indication of just how robust the technology is, how flexible it could be over various waste streams, and the modularity of it to be able to go up or down in volumes and different waste streams that we are treating. Really just using the same brains, but for different material handlings for those different type of waste stream technologies. In terms of that global market development strategy, as I mentioned, Paul was in Europe, I will be corrected, but in April or May, talking about the technology. He was in the US in the later part of July, early part of August. We are developing those strategies right now, in fact we have meetings on it next week as the results are done.

Speaker #2: And the modularity of it, to be able to go up or down in volumes and different waste streams that we're treating, really just using the same brains but for different material handling for those different types of waste stream technologies.

Speaker #2: So, in terms of that global market development strategy, as I mentioned, Paul was in Europe—I’ll be corrected, but in April or May—talking about the technology.

Speaker #2: He was in the US in the latter part of July or the part of August that we're developing those strategies, right down to meetings on it next week as the results are done.

Speaker #2: The most efficient way to monetize the technology—well, I think that's underway now. We've just sold a couple of plants. We've already got a couple of plants in and running.

Jason Dixon: The most efficient way to monetize the technology, well, I think that is underway now. We have just sold a couple of plants. We have already got a couple of plants in and running. The ability now to deal with those more diverse waste streams has opened up a bigger addressable market. I would expect you will start to see growth within that business and increased sales globally in the near term.

Speaker #2: The ability now to deal with those more diverse waste streams has opened up a bigger addressable market. So, I'd expect you'll start to see growth within that business and increased sales globally in the near term.

Speaker #1: Thank you. The next question is: Are there any data center pipeline agreement visibility for next year? Any guidance in terms of EBITDA or FCF?

Operator: Thank you. The next question is: "Are there any data center pipeline agreement visibility for next year? Any guidance in terms of EBITDA FCF?

Speaker #2: So, that's a fairly difficult question to answer. In terms of the data center pipeline, obviously, we see RFQs up to two or three years in advance because building turbines is not an overnight process.

Jason Dixon: That is a fairly difficult question to answer. In terms of the data center pipeline, obviously we see RFQs up to 2, 3 years in advance because building a turbine is not an overnight process. At the moment, and I am just going off the top of my head, at the moment, we would have 3 or 4 data centers in the US, 1 in New Zealand, from memory, and another 1 in Australia. So there is probably about 5 or 6 that we are looking at turbines behind the gate right now for. Obviously, there has been a rapid move in that market for all these turbines being sucked into the US as AIs really come along and meant that they need an enormous amount more power within those businesses to be able to run the AIs.

Speaker #2: At the moment, and I'm just going off the top of my head, at the moment, we'd have three or four data centers in the US, one in New Zealand from memory, and another one in Australia.

Speaker #2: So, there's probably about five or six that we're looking at—turbines behind the gate right now for. Obviously, it's been a rapid move in that market, with all these turbines being sucked into the US as AI has really come along and meant that they need an enormous amount more power within those businesses to be able to run the AI.

Speaker #2: My understanding is that it requires about seven times more energy to run an AI search than a standard Google search, so that's driven the demand.

Jason Dixon: My understanding is it requires about 7 times more energy to run an AI search than a standard Google search, so that has driven the demand. It has been a very rapidly moving market, but 1 that obviously we are now engaging in that agency agreement in the Midwest of the US at the heart of the data centers, we expect will get us heavily involved within that business. I am not sure what EBITDA is. I presume you are talking about free cash flow. We do not provide EBITDA guidance on individual businesses, of course, but the business has got very good margins. It has got very good intellectual property, and what is an interesting macro outlook for us. I would expect we would continue to see that business perform reasonably well into the future, subject to obviously the Middle East being a little bit problematic for us at this point in time.

Speaker #2: So, it's been a very rapidly moving market, but one that, obviously, we've now engaged in with that agency agreement in the Midwest of the US, at the heart of the data centers.

Speaker #2: We'd expect we'll get us heavily involved within that business. I'm not sure EBITDA sets up; I presume you're talking about pre-cash flow. We don't provide EBITDA going on individual businesses, of course, but the business has got very good margins.

Speaker #2: It's got very good intellectual property. And what's interesting, from a macro outlook for us, I'd expect you'll continue to see that business perform reasonably well into the future, subject to, obviously, the Middle East being a little bit problematic for us at this point in time.

Jason Dixon: I would expect we would continue to see that business perform reasonably well into the future, subject to obviously the Middle East being a little bit problematic for us at this point in time.

Speaker #1: Thank you. The next question is: Please go into more detail about your PFAS global market development strategy. What is the most efficient way to monetize this technology?

Operator: Thank you. The next question is, "Please go into more detail about your PFAS global market development strategy. What is the most efficient way to monetize this technology?

Operator: Thank you. The next question is, "Please go into more detail about your PFAS global market development strategy. What is the most efficient way to monetize this technology? When do you ex-

Speaker #1: And when do you expect.

Jason Dixon: We have already answered that.

Operator: When do you ex-

Speaker #2: We've already answered that question.

Jason Dixon: We have already answered that question.

Speaker #1: Oh, I apologize.

Operator: Oh, I apologize.

Jason Dixon: You got another one?

Speaker #2: Have you got another question?

Operator: Sorry. Yes. Can management confirm it is satisfied with the group's liquidity position and confirm there is no intention to announce an equity capital raise at today's depressed share market price?

Speaker #1: Yes. Can management confirm it's satisfied with the Group's liquidity position, and confirm there is no intention to announce an equity capital raise at today's depressed share market price?

Speaker #2: Well, liquidity position, obviously, as Nate asked at the top of the bugger up here, and the invoices, et cetera. At the same time, we're not sitting here today saying we're going to raise capital at the current share price.

Jason Dixon: Well, liquidity position obviously has no doubt got tougher with the bugger up in ERP and the invoices, et cetera. At the same time, we are not sitting here today saying we are going to raise capital at the current share price. Clearly, we are not going to be doing any acquisitions either. We have got a big focus on our working capital at this point in time and making sure that we get the invoicing right and we get the cash flow right. My recollection is invoicing out of energy, and Gareth can probably talk to this better than me, has been around record highs in recent months, and the collection is quite strong. So we have certainly had a very large focus on that part of the business. So this one, talking about energy, it is the same sort of question. ABC required revenue of AUD 16 million. Sorry.

Speaker #2: Clearly, we're not going to be doing any acquisitions, either. We've got a big focus on our working capital at this point in time, and making sure that we get the invoicing right and we get the cash flow right.

Speaker #2: My recollection is invoicing out of energy and gas—can probably talk to this better than me—has been around record highs in recent months, and collections have been quite strong.

Speaker #2: So, we've certainly had a very large focus on that part of the business. That's why I'm talking about energy—it's the same sort of question.

Jason Dixon: So this one, talking about energy, it is the same sort of question. ABC required revenue of AUD 16 million. Sorry. Does this imply that absence of ABC's acquired revenue, EGL's revenue would have declined? No, because ABC was in the prior period to PCP. My recollection is there was probably around about half of that revenue recognized in the prior year, from memory. No, I would have to do the numbers or get Gareth to do the numbers, but no, there is certainly a large part of it recorded in the prior period. Next question, size of the PFAS plant sold more recently. One was a bit bigger than the standard plant. I think it is around 50,000 liters per hour, off the top of my head. The other plant is a totally different configuration, which is working a soil washing type of facility.

Speaker #2: ABC required revenue of $16 million to simplify—sorry, to imply that absence. ABC's acquired revenue would have declined—no, because ABC was in the prior period for part.

Jason Dixon: Does this imply that absence of ABC's acquired revenue, EGL's revenue would have declined? No, because ABC was in the prior period to PCP. My recollection is there was probably around about half of that revenue recognized in the prior year, from memory. No, I would have to do the numbers or get Gareth to do the numbers, but no, there is certainly a large part of it recorded in the prior period. Next question, size of the PFAS plant sold more recently. One was a bit bigger than the standard plant. I think it is around 50,000 liters per hour, off the top of my head. The other plant is a totally different configuration, which is working a soil washing type of facility. That is an extremely large plant, capable of doing many hundreds of thousands of liters per hour. Both bigger than our standard sort of 20,000-liter-per-hour plant.

Speaker #2: My recollection is there was probably around about half of that revenue recognized in the prior year, from memory. So, no, I don't think—I’d have to do the numbers and get Jared to do the numbers—but no, no, there’s certainly a large part of it recorded in the prior period.

Speaker #2: So, next question: the size of the PFAS plant sold more recently. So, one was a bit bigger than the standard plant—I think it's around 50,000 litres per hour, off the top of my head.

Speaker #2: The other plants are a totally different configuration, which is working as a soil washing type of facility. That's an extremely large plant, capable of handling many hundreds of thousands of litres per hour.

Jason Dixon: That is an extremely large plant, capable of doing many hundreds of thousands of liters per hour. Both bigger than our standard sort of 20,000-liter-per-hour plant. Next question is, "Free cash flow and earnings per share is something that you consider? I haven't seen it or mentioned in the presentation." Well, I think if you go to the appendix B, there is a reconciliation of cash there. We certainly do consider earnings per share and free cash flow. I will take it on board about future presentations. It is something we are clearly focused on, and this is an unusual year for us, so just take away any issues. We implemented the ERP that cost us several million AUD. We moved sites and consolidated post the acquisition of ABC.

Speaker #2: So, both are bigger than our standards for the 20,000-litre per hour plant. Next question is, free cash flow and earnings per share—is that something that you consider?

Jason Dixon: Next question is, "Free cash flow and earnings per share is something that you consider? I haven't seen it or mentioned in the presentation." Well, I think if you go to the appendix B, there is a reconciliation of cash there. We certainly do consider earnings per share and free cash flow. I will take it on board about future presentations. It is something we are clearly focused on, and this is an unusual year for us, so just take away any issues. We implemented the ERP that cost us several million AUD. We moved sites and consolidated post the acquisition of ABC. There was a lot of things going on out of our free cash flow that we were doing to develop the business into the future and obviously make sure the business is sustainable, but it is something we clearly look at.

Speaker #2: I haven't seen it or mentioned the presentation. Well, I think if you go to Appendix B, there's a reconciliation of cash there. We certainly do consider earnings per share and free cash flow.

Speaker #2: We'll take it on board for future presentations, but it's something we clearly focus on, and this is an unusual year for us. So, just take away any issues.

Speaker #2: We implemented the ERP—that cost us several million dollars. We moved sites and consolidated post-acquisition at ABC, so there was a lot of things going on out of our free cash flow that we were doing to develop the business into the future.

Jason Dixon: There was a lot of things going on out of our free cash flow that we were doing to develop the business into the future and obviously make sure the business is sustainable, but it is something we clearly look at. Gareth, do you want to talk to the next question about free cash flow positive for, or cash flow positive FY23? We are certainly cash flow positive in 2026 from operations point of view. We just reinvest into the company as you expect we would. But I will hand over to you, Gareth.

Speaker #2: And obviously, make sure the business is sustainable, but it's something we clearly look at. So, Gareth, do you want to talk to the next question about free cash flow positive or cash flow positive in FY27?

Jason Dixon: Gareth, do you want to talk to the next question about free cash flow positive for, or cash flow positive FY23? We are certainly cash flow positive in 2026 from operations point of view. We just reinvest into the company as you expect we would. But I will hand over to you, Gareth.

Speaker #2: We're certainly cash flow positive in '26 from an operations point of view. We just reinvested into the companies—you'd expect we would. But I'll hand over to you, Gareth.

Speaker #3: Yeah, that is correct. That's probably the short answer: yes, we were cash flow positive from an operating activities perspective, at $2.3 million positive.

Gareth Nicholls: Yeah. That is correct. That is probably the short answer is that yes, we were cash flow positive from an operating activities perspective at AUD 2.3 million positive. That is actually a better result than FY25. But obviously, when you take into account some of the considerable spend that occurred, so we spent around AUD 2.4 million on the ERP, and around just under AUD 1 million on the relocation. Those two, which position the company well for future growth, but were cash flow negative during the year, so they did have an impact. And coming back to Jason's earlier point, we have seen quite strong cash collections over the last 2 months from our energy business, which is not unusual at this time of year, but it is pleasing to see that July has been so strong.

Speaker #3: So, that is actually a better result than FY25. But obviously, when you take into account some of the considerable spends that occurred—so we spent around $2.4 million on the ERP.

Speaker #3: And around just under $1 million on the relocation. So, those two, which position the company well for future growth, were cash flow negative during the year.

Speaker #3: So, they did have an impact. And coming back to Jason's earlier point, yeah, we've seen quite strong cash collections over the last two months from our energy business, which is not unusual at this time of year, but it is pleasing to see that July has been so strong.

Speaker #2: So, the next question—I think, scroll down. Sales growth at FY27 for Energy, given Energy's trade is expected, as FY25's EBITDA margin is 14%. Reasonable expectations.

Jason Dixon: So the next question, I think if I scroll down. Sales growth for FY27 for Energy, given Energy trading is expected as FY25, EBITDA margin 14%. Reasonable expectations. I would have to do the blended margins between Advanced Boilers & Combustion and Tomlinson Energy Service as comparison to 2025, where you only had part of Advanced Boilers & Combustion in there. But in broad answer to your question, we would expect sales growth again in FY27. For each boiler we put into the market, we are then doing service level agreements the next 5 years. Boiler sales have been very strong, as I mentioned early, already this financial year, so that should lead to underlying growth. I would certainly expect margin improvement. I just cannot reconcile off the top of my head the blended margins of the two businesses. But I am happy to take that on notice and come back to you. So the next one.

Speaker #2: So, I'd have to blend the margins between Advanced Oilers and TES as a comparison to '25, where you only had part of Advanced Oilers in there.

Speaker #2: But in broad answer to your question, we'd expect sales growth again in FY27. For each boiler we put into the market, we're then doing service flip agreements for the next five years. Boiler sales have been very strong, as I mentioned already, earlier this financial year.

Speaker #2: So, that should lead to underlying growth, and I'd certainly expect margin improvement. I just can't reconcile off the top of my head the blended margins of the two businesses, but I'm happy to take that on notice and come back to you.

Jason Dixon: But I am happy to take that on notice and come back to you. So the next one. More recent plant sales also have recurring income components. I presume that is referring to PFAS. Yes, the answer is yes. We have a maintenance charge that is per liter or kilo, depending on the product that we are processing. Each one of those plants we sell come with a recurring income stream once they are commissioned up and running online. That certainly is true in the case. PFAS plants sold, how many do you forecast to sell this year? I would love to forecast 100. PFAS plants sold, so we have got a few in operation now. We have got another 2 into fabrication. I think by March this year, we would have 4 in full operation and commissioned, off the top of my head.

Speaker #2: So, next one: more recent plant sales also have recurring income components. So, I presume that's referring to PFAS. So, yes, the answer is yes.

Jason Dixon: More recent plant sales also have recurring income components. I presume that is referring to PFAS. Yes, the answer is yes. We have a maintenance charge that is per liter or kilo, depending on the product that we are processing. Each one of those plants we sell come with a recurring income stream once they are commissioned up and running online. That certainly is true in the case. PFAS plants sold, how many do you forecast to sell this year? I would love to forecast 100. PFAS plants sold, so we have got a few in operation now. We have got another 2 into fabrication. I think by March this year, we would have 4 in full operation and commissioned, off the top of my head. We would certainly forecast or hopefully sell another couple of plants on top of that during this period as well.

Speaker #2: So, we have a maintenance charge that's per litre or per kilo, depending on the product that we're processing. So, each one of those plants we sell comes with a recurring income stream once they're commissioned, up and running online.

Speaker #2: So, that's certainly true in this case. PFAS plant sold—how many do you forecast to sell for this year? I'd love to forecast 100.

Speaker #2: So, PFAS plant sold. So, we've got a few in operation now. We've got another two in fabrication. So, I think by March this year, we'd have four in full operation and commissioned, off the top of my head.

Jason Dixon: We would certainly forecast or hopefully sell another couple of plants on top of that during this period as well. It is a difficult one to forecast, not because we do not have very high confidence in our technology and how we can see economic solutions for our clients, but you also have regulators involved in this part of the market, and that obviously can be an issue around timing. But I think we are starting to get accepted now by regulators that the technology is extremely effective. Maybe, Paul, have you got any comments around that? You are closer to that than me.

Speaker #2: We'd certainly forecast, or hopefully sell, another couple of plants on top of that during this period as well. So, it's a difficult one to forecast—not because we don't have very, very high confidence in our technology and how we can see economic solutions for our clients, but you also have regulators involved in this part of the market, and that obviously can be an issue around timing.

Jason Dixon: It is a difficult one to forecast, not because we do not have very high confidence in our technology and how we can see economic solutions for our clients, but you also have regulators involved in this part of the market, and that obviously can be an issue around timing. But I think we are starting to get accepted now by regulators that the technology is extremely effective. Maybe, Paul, have you got any comments around that? You are closer to that than me.

Speaker #2: But I think we're starting to get acceptance now from regulators that the technology is extremely effective. So maybe, Paul, have you got any comments around that?

Speaker #2: You're closer to that.

Paul Gaskett: Yeah, no, I absolutely agree, Jason. I think the water authorities are certainly really taking that on board now to eliminate the pollution of their sewage treatment plant. So they are certainly looking at it upstream now, to be able to mitigate their risk that they have got within the sewage treatment plant. So they certainly are the key drivers at this point in time. That is across Australia and also the recent trip to the US, it is the same over there as well.

Speaker #1: Yeah, no, absolutely. Agree, Jason. I think the water authorities are certainly really taking that on board now to eliminate the pollution from their sewage treatment plants.

Speaker #1: So, they're certainly looking at it upstream now to be able to mitigate their risk that they've got within the sewage treatment plant. So, they sent me the key drivers at this point in time.

Speaker #1: That's across Australia, and also during the recent trip to the US; it's the same over there as well.

Speaker #2: Great, thanks, Paul. So, next one: biggest profit drivers in the EGL for the next two to three years. Well, as we just mentioned, we'd expect the PFAS side of the business will continue to grow.

Jason Dixon: Thanks, Paul. Next one, biggest profit drivers in EGL for the next 2 to 3 years. Well, as we just mentioned, we would expect the PFAS side of the business will continue to grow. You would expect to see a return to normal earnings within that energy business and improved margins. As I said, that business now, the reality is we have the two key leading brands in Australia between Maxitherm Boilers and John Thompson Boilers. We have the two leading brands. We are the biggest in the market. We are the only national 24/7 company. We are very attractive to the large players within the food and beverage sector in Australia, that we can do national agreements for them. I would certainly expect that to continue to grow. Slowdown in Baltec in Australia in the second half. Not a slowdown. I would not agree with that statement.

Speaker #2: And you'd expect to see returns to normal earnings within that energy business and improved margins. And as I said, that business now, the reality is we've got the two key leading brands in Australia between Maxitherm Boilers and John Thomson Boilers.

Speaker #2: So, we've got the two leading brands, with the biggest in the market. We're the only national 24/7 company, so we're very, very attractive to the large players within the food and beverage sector in Australia, in that we can do national agreements for them.

Speaker #2: So, I certainly expect that to continue to grow. Slowdown in Baltic Australia, second half—not a slowdown, I wouldn't agree with that statement. So, if you go back to FY25, we had the enormous Pelican Point job that we did in Australia.

Jason Dixon: If you go back to FY25, we had the enormous Pelican Point job that we did in Australia. As we spoke to the market about then, that was a rare job where we agreed to do the installation, supervision as well as supply, which we generally do not do, but we did it purely on a cost-plus basis, so we did not have risk. I will not be able to get the exact numbers right, but that job was 16 or 17 million. Gareth might be able to help me. A good chunk of that, probably 6, 7 million, was overseeing the installation, and that fell within that FY25 period. There is no slowdown in Australia. We are actually quoting a significant amount of jobs now.

Speaker #2: And as we spoke to the market about then, that was a rare job where we agreed to do the installation, supervision, as well as supply, which we generally don't do because we did it purely on a cost-plus basis.

Speaker #2: So, we didn't have risk. I won't be able to get the exact numbers right, but that job was $16 or $17 million. And Gareth might be able to help me—a good chunk of that, probably $6 or $7 million, was overseeing the installation.

Speaker #2: And that's spelled within that FY25 period. So, there's no slowdown in Australia, where we're actually quoting a significant amount of jobs now. I'm going to say there's three or four within Australia.

Jason Dixon: I am going to say there are 3 or 4 within Australia, a lot of them retrofitting silencers, a couple of upgrades, and a few new larger plants as well. We are just delivering one into Kwinana in Perth at the moment. Not a slowdown, just an unusual business mix in FY25. I would expect it is just business as usual in Australia. How would you think of a normal half? Was there a large contract that is meant for next half? I am not sure exactly which half you are referring to, but obviously, Baltec, you are doing larger jobs. The jobs on average are probably AUD 2 to 3 million, some of them up to USD 3, 4 million. The timing of those jobs does obviously vary from half to half. At the same time, if you are doing 10 to 12 a year, the expected portfolio approach would sort of balance that out.

Speaker #2: A lot of them are retrofitting silencers, a couple of upgrades, and a few new, larger plants as well. We're just delivering one into Kwinana and Perth at the moment.

Speaker #2: So, not a slowdown, just an unusual business mix in FY25. So, I'd expect it's just business as usual in Australia. How we think of a normal half—was there a large contract between Nexart?

Speaker #2: I'm not sure exactly which half you're referring to, but obviously Baltic, you're doing larger jobs. Some jobs on average are probably $2 to $3 million Aussie, some up to $3 to $4 million US.

Speaker #2: So, the timing of those jobs does obviously vary from half to half. But at the same time, if you're doing 10 to 12 years, I'd expect the portfolio approach would sort of balance that out.

Jason Dixon: At the same time, if you are doing 10 to 12 a year, the expected portfolio approach would sort of balance that out. Large contract means next half could be slower again. No, I do not America's. America's given the strong second half, everything and all. I am not exactly sure how to answer that question, but we have a good tender pipeline, as mentioned, obviously affected by the Middle East of that part of our business at the moment. Outside of that, it is very much business as usual, but it will just be lumpy from half to half. Gareth, I will let you handle next one. ERP fully employed now.

Speaker #2: So, a large contract means the next half could be slower again. No, I don't. Americas—and in Americas, given a strong second half, everything, yeah, look, I'm not exactly sure how to answer that question, but we've got a good tender pipeline, as mentioned. Obviously, we're affected by the Middle East—that part of our business at the moment.

Jason Dixon: Large contract means next half could be slower again. No, I do not America's. America's given the strong second half, everything and all. I am not exactly sure how to answer that question, but we have a good tender pipeline, as mentioned, obviously affected by the Middle East of that part of our business at the moment. Outside of that, it is very much business as usual, but it will just be lumpy from half to half. Gareth, I will let you handle next one. ERP fully employed now.

Speaker #2: But outside of that, it's very much business as usual, but it will just be lumpy from half to half. So Gareth, I'll let you handle the next one.

Speaker #2: ERP fully employed now.

Speaker #1: Yes, I'm in the short answers. Yes, the ERP has been fully utilised. We got these reports out using the new ERP system, so that's a positive sign that it is working as it should.

Gareth Nicholls: Yes. I mean, the short answer is yes, the ERP is being fully utilized. We got these reports out using the new ERP system, so that's a positive sign that it is working as it should. We're still working on getting the efficiency out of it, like any new large ERP installation. There's a lot of functionality there that we haven't turned on yet, and some functionality we probably need to turn off to get the most efficiency out of the system as we possibly can and would like to see. So there's still some work that is going to be ongoing, but in terms of day-to-day operations, there's no issues with data being processed as we speak.

Speaker #1: We're still working on getting the efficiency out of it, like any new large ERP installation. There's a lot of functionality there that we haven't turned on yet.

Speaker #1: And some functionality we probably need to turn off to get the most efficiency out of the system as we possibly can, and would like to see.

Speaker #1: So, there's still some work that is going to be ongoing, but in terms of day-to-day operations, yeah, there's no issues with data being processed as we speak.

Jason Dixon: Okay. Thanks, Gareth. So these 2 delayed Middle East Baltec projects now transition into installation. Revenue recognition phase deferred AUD 1.5 million. Right. As I mentioned earlier, we don't do the installation, so there's only one job in Australia that can do the installation. It's a bit complicated, but our role really ends at the port, where we fabricate in Vietnam. Since COVID, 3, 4 years ago, we don't even take responsibility for the transport. We leave that up to our client as well because of the variability and the costs reflected through that. But obviously part of our revenue recognition getting paid is that when it arrives at the client site and there's a payment when it's commissioned up and functioning as it should do. So the issue is really not around the installation.

Speaker #2: Great, thanks, Gareth. So, these two delayed Middle East-Baltic projects now transition into the installation revenue recognition phase, deferred $1.5 million. Right, so, as I mentioned earlier, we don’t do the installation.

Speaker #2: So, there's only one job in Australia that can do the installation. It's a bit complicated, but our role really ends at the port, where we fabricate in Vietnam.

Speaker #2: Since COVID, three or four years ago, we don't even take responsibility for the transport. We leave it up to our client as well because of the variability and the cost reflected through there.

Speaker #2: But obviously, part of our revenue recognition—getting paid—is that when it arrives at the client site and there's a payment, and when it's commissioned up and functioning as it should do.

Speaker #2: So, the issue's really not around the installation. It's just that revenue recognition is based on where the project's at and then when we get paid for the finality of that project.

Jason Dixon: It's just that revenue recognition based on where the project's at and then when we get paid for the finality of that project. As I mentioned, there were 2 significant projects into the Middle East, which both suffered significant delays. So we can't get the commissioning side of things finalized and those payments. Then there was another one, which was, I can't remember exactly where it was going to, but we had to get acoustic liners from Europe to Vietnam, and we couldn't get through the Suez Canal with commercial vessels because they wouldn't insure commercial vessels through the Suez. We ended up having to go around Africa to get that to Vietnam. It slowed us down by 6 or 8 weeks, which deferred a big chunk of that revenue on that project because we couldn't complete fabrication in time with our expectations.

Speaker #2: So, as I mentioned, there were two significant projects in the Middle East, which both suffered significant delays, so we can't get the commissioning side of things finalized.

Speaker #2: And those payments. And then there was another one, which was—I can't remember exactly what it was going to—but we had to get acoustic liners from Europe to Vietnam.

Speaker #2: And we couldn't get through the Suez Canal with commercial vessels because they wouldn't insure commercial vessels through the Suez. And we ended up having to go around Africa to get that to Vietnam.

Speaker #2: It slowed us down by six or eight weeks, which deferred a big chunk of that revenue on that project because we couldn't complete fabrication in time with our expectations.

Speaker #2: I hope that's answered that. Oh, sorry. Have you safeguarded against similar logistic risks in the future? Well, obviously, we can't safeguard against that. As I said, we're largely done exporting to Vietnam, so that was dealt with many years ago, and we're not responsible for transport.

Jason Dixon: I hope that's answered that. Oh, sorry. Have you safeguarded against similar logistic risks in the future? Well, obviously, we can't safeguard against that. As I said, we're largely done export in Vietnam, so that was dealt with many years ago that we're not responsible for transport. Can we control getting stuff into the from us? No, we can't. The chance of us having 2 jobs in the same half delivered to the Middle East, I suspect, would be fairly low, especially one into Iraq. But that's what happened. There's no other way we can mitigate that risk. We're off risk on that. We don't do the transport. We're export. It just means that we don't get the timing of those last couple of payments as we would have expected within the business. Synergies amongst the business, are they completely standalone or separate? Yeah, no, that's a good question.

Speaker #2: Can we control getting stuff into the straight to us? No, we can't. The chance of us having two jobs in the same half delivered to the Middle East, I suspect, would be fairly low, especially one into Iraq.

Speaker #2: But that's what happened. But there's no other way we can mitigate that risk. We're off risk on that. We don't do the transport; we're export.

Speaker #2: It just means that we don't get the timing on those last couple of payments as we would have expected within the business. Synergies amongst the business—they completely stand alone or separate.

Speaker #2: Yeah, no, that's a good question. So, synergies within the business. If you look at what waste does, the waste sector in Australia is about an $18 billion sector per annum.

Jason Dixon: Synergies within the business. If you look at what Waste does, the waste sector in Australia is about AUD 18 billion sector per annum, and we have very common clients across the business units through there. We try and approach those clients on a whole EGL basis where we could do their dust extraction systems. If it is just talking about pure waste facility, we can do the dust extraction systems, we can do their odor control systems. We can do dust suppression with our dry fogging systems. If they have any waste coming in that needs sterilization, we can do the boilers and autoclaves for them. Through, obviously, EGL Waste, we can do the thermal separation. There really is a lot of synergies through those businesses.

Speaker #2: And we've got very, very common clients across the business units through there. So, we try and approach those clients on a whole-of-EGL basis, where we could do their dust extraction systems.

Speaker #2: We could do—and just talk about—pure waste facility. We can do the dust extraction systems. We can do their odour control systems. We can do dust suppression with our dry fogging systems.

Speaker #2: If they've got any waste coming in that needs sterilisation, we can do the boilers and autoclaves for them. Through, obviously, your waste, we can do the tumour separation.

Speaker #2: So, there really are a lot of synergies throughout those businesses. We'd expect, going forward, as we look more to waste-to-energy, that Baltic will also get more and more involved in that waste-to-energy.

Jason Dixon: We would expect going forward as we look more to waste to energy, that Baltec will also get more and more involved in that waste-to-energy side of the business. Could our business be better linked in? Yes. The answer to the second part of that question is could we divest a business without affecting the remaining business? The answer is 100%. The businesses largely operate on a standalone basis, albeit, as I mentioned, Waste uses their client base to drive sales in all the other particular business units. Baltec could be divested without impacting it. I suspect so could energy. I think the answer there is we could divest without too many issues there. I got an enormous amount of questions. I am trying to get through them as fast as I can.

Speaker #2: Side of the business. So, could a business be able to—yeah, so to answer the second part of that question: could we divest a business without affecting the remaining business?

Speaker #2: The answer is 100%. So, the businesses largely operate on a standalone basis. Albeit, as I mentioned, Waste uses their client base to drive sales in all the other particular business units.

Speaker #2: Baltic could be divested without impacting it, I suspect. So, could Energy? No, I think the answer is we could divest without too many issues there.

Speaker #2: So, I've got an enormous number of questions. I'm trying to get through them as fast as I can.

Speaker #3: Can we jump in to the prior year one here? The prior year only had three months of ABC revenue. Doesn't that suggest a sizable decline in EGL Energy revenue?

Gareth Nicholls: Do you want me to jump in the prior year one here that.

Jason Dixon: Yeah.

Gareth Nicholls: Prior year only had 3 months of ABC revenue. Government suggests a sizable decline in EGL Energy revenue, absent the ABC acquisition. Just looking at the numbers, if you exclude ABC out, they had about AUD 4 million of revenue, just low AUD 4 million in the prior year. That suggests that the underlying EGL business, the historic EGL business, was relatively flat year-on-year. There was not a sizable decline. There was a slight decline. The second part of the question was, is this decline driven primarily by project or service revenue? It was really around the project revenue from that side, and we believe that is purely a timing. We have seen very strong sales to start off FY27 in that energy space, in all of the energy businesses at this point in time.

Speaker #3: Absolutely. ABC acquisition. So, just looking at the numbers, if you exclude ABC out, they had about $4 million of revenue, just low $4 millions in the prior year.

Speaker #3: So, that suggests that the underlying EGL business—the historic EGL business—was relatively flat year on year. There wasn't a sizable decline; there was a slight decline.

Speaker #3: And the second part of the question was, is this decline driven primarily by project or service revenue? It was really around the project revenue on that side.

Speaker #3: And we believe that's purely a timing issue. So, we've seen very strong sales to start off FY27 in that energy space, in all of the energy businesses at this point in time.

Speaker #2: And the ERP causing disruptions, that.

Jason Dixon: And ERP causing disruptions, that piece.

Speaker #3: Yeah.

Gareth Nicholls: Yeah.

Speaker #2: So, ERP rollout difficulties—are they related to EGL or the SI provider? I'm not sure exactly what SI stands for, but it's Oracle NetSuite's system that we implemented.

Jason Dixon: ERP rollout difficulties related to EGL or the SI provider, not sure exactly what SI stands for. It is Oracle NetSuite, the system that we implemented. We had a third party whose specific function in life is to do ERP implementations of Oracle NetSuite. If you listen to all three of us, I am sure all three of us would say the others got their own role to play in this. I think broad terms, we were very disappointed with Oracle NetSuite. I think during the process, they, and Gareth Nicholls knows better than me, I think they made 15% of their staff globally redundant. We found that the response out of Oracle NetSuite wasn't particularly strong, and we are quite disappointed in that. The service provider that did the implementation process for us, I will just say very simply, we sacked them during the process and actually completed it ourselves.

Speaker #2: We had a third party whose specific function in life is to do ERP implementations of Oracle NetSuite. So, if you listen to all three of us, I'm not sure all three of us would say the others have got their own role to play in this.

Speaker #2: I think in broad terms, we were very disappointed with Oracle NetSuite. I think during the process, they—and Gareth and I—met. I think they made 15% of their staff globally redundant.

Speaker #2: So, we found that the response out of Oracle NetSuite wasn't particularly strong, and we're quite disappointed in that. The service provider that did the implementation process for us—I'll just say very simply, we sacked them.

Speaker #2: During the process, and actually completed it ourselves. So, that's how disappointed we were in the capabilities they brought to the business. Do we have to take some responsibility for it?

Jason Dixon: That is how disappointed we were in the capabilities they brought to the business. Do we have to take some responsibility for it? Absolutely, we have to take some responsibility for it. You don't want to make excuses, but ERP implementation is obviously notorious for how they go wrong within businesses. We thought we had tested, reviewed, and audited processes extremely strongly. The ERP went live the first morning, very well. We had an invoice out for 8:00 on the first morning it went live, so we are confident that we have done all that is required. The boring part, I guess, that is our responsibility is the system was complicated. I will get this wrong, but just for want of a better description, on the field services, the tablets that our service technician takes out, Oracle NetSuite standard field services, it comes out with about 20, 24 selections on the page.

Speaker #2: Absolutely, we have to take some responsibility for it. You don't want to make excuses, but ERP implementations are obviously notorious for how they go wrong within businesses.

Speaker #2: We thought we'd tested, reviewed, and audited processes extremely thoroughly. The ERP went live the first morning—very well. We had an invoice out by 8 o'clock on the first morning we went live.

Speaker #2: So, we're confident that we'd done all that's required. The boring part, I guess—that's our responsibility—is the system was complicated. And I'll get this wrong, but just for want of a better description, on the field services, the tablets that our service technician takes out—ERP, sorry, Oracle NetSuite standard field services—comes out with about 20 to 24 selections on the page.

Speaker #2: So rather than reducing all that optionality on the page, the service techs could use a dropdown and select whatever was going on.

Jason Dixon: Rather than reducing all that optionality on the page as what the service techs could use as a drop-down and select whatever was going on, when we probably only needed six or seven of those functionalities, we rolled it out as standard. That certainly led to issues within the business. It led to incorrect data entry into the system. Certainly, we could have been better in what we rolled out in terms of what went out into the field to make it less complicated for our service techs. We had issues with being in boiler rooms, of course, being in different work environments where this would normally be rolled out in the majority of businesses by a long way.

Speaker #2: When we probably only needed six or seven of those functionalities, we rolled it out as standard. That certainly led to issues within the business that led to incorrect data entry into the system.

Speaker #2: So, certainly, we could have been better in what we rolled out in terms of what went out into the actual field, to make it less complicated for our service techs.

Speaker #2: We had issues with being in boiler rooms, of course, as it’s a different work environment compared to where this would normally be rolled out in the majority of businesses.

Speaker #2: By a long way, and there were some data migrations that didn't come across as smoothly as they should have, which, as you clearly say, our service provider was in charge of that data migration.

Jason Dixon: There was some data migration that did not come across as smoothly as it should have, which you would clearly say our service provider was in charge of that data migration. I guess it is part on everyone, and we make no excuses for any things that we should have done better, which is probably more around making it less confusing, I guess, for the amount of service technicians we had to try and roll it out for in one go. Manufacturing PFAS plants in-house seems like an inefficient way to address the global market. I do agree with that. Manufacturing the PFAS plants in-house was done for the Australian market. Obviously, the control panels that have got all our logics and the brains within them, we keep in-house so that no one can get out of our IP.

Speaker #2: So, I guess it's on everyone, and we make no excuses for anything that we should have done better, which is probably more around making it less confusing, I guess, for the amount of service technicians we had to try and roll it out for in one go.

Speaker #2: So, manufacturing PFAS plants in-house seems like an inefficient way to address the global market—I do agree with that. Manufacturing the PFAS plants in-house was done for the Australian market.

Speaker #2: And obviously, the control panels that have got all that logic and the brains within them, we keep in-house so that no one can get hold of our IP.

Speaker #2: If, by way of example, we're doing a PFAS plant in the US, then your point is correct—that would be manufactured in the US.

Jason Dixon: If by way of example, we are doing a PFAS plant into the US, then your point is correct. That would be manufactured in the US. The tanks and the structurals, we are not shipping air overseas, and obviously, it has got to be wired to those different standards as well. When it is going to foreign markets, there would be local input into that. Paul, do you have further comments on that?

Speaker #2: The tanks and the structures, we're not shipping here. Overseas, and obviously, it's going to be wired to those different standards as well. So, when it is going into foreign markets, there would be local input into that.

Speaker #2: So, Paul, have you got any further comments?

Paul Gaskett: Yeah, no, absolutely agree, Jase. The key component that we would remain control over is the IP. Simply the manufacturing pipework, control panels, and electrical to ensure that it meets that local market would be done in that particular country. But we would maintain that IP, and control that so it did not get out.

Speaker #3: Yeah, no, absolutely agree, Jace. The key component that we would remain in control over is the IP. So, simply the manufacturing pipework, control panels, and electrical—just to ensure that it meets that local market—would be done in that particular country.

Speaker #3: But we would maintain that IP and control that, so it didn't get out.

Speaker #2: Yeah, yeah. And the final part of that question was, are you exploring foreign partners and royalty streams? So again, Paul, you can talk to that.

Jason Dixon: Yeah. The final part of that question was, are you exploring foreign partners and royalty streams? Again, Paul, you can talk to that.

Speaker #3: Yeah, absolutely. We are looking at potential agents in different countries to assist us with the rollout and selling of PFAS plants. Certainly, from a local perspective, if there are people on the ground who already have those networks, it certainly makes it a lot easier for us to be able to do that.

Paul Gaskett: Yeah, absolutely. We are looking at potential agents in different countries to assist us within the rollout on selling of PFAS plants. Certainly, from a local perspective, if there are people that are on the ground that do already have those networks, it makes it certainly a lot easier for us to be able to do that.

Speaker #2: Yeah. Thanks, Paul.

Jason Dixon: Yeah. Thanks, Paul. The next one, sorry. ERP impacted revenue and EPS. So ERP impacted revenue and EPS contribution. Is that true? Well, yeah, certainly that is absolutely true. The revenue impact of the ERP was we had the invoicing issues within the energy business in I am going to say March, April. It was around that timeframe. The EBITDA contribution impact was some of the issues we have with the ERP was getting costs on the job of both labor and parts. Where parts were going into jobs within that energy business, one of the big issues we have with the ERP in that timeframe, it was posting parts onto the job either at a value of zero or AUD 1. We had all the parts obviously loaded in the system at their sale price. It did not function correctly in picking that up and putting that onto invoices.

Speaker #1: The next one, sorry. ERP impacted revenue and so, ERP impacted revenue contribution, is that true? Or, yes, certainly, that's absolutely true. So, the revenue impact of the ERP was we had the invoicing issues within the Energy business in, I'm going to say, March, April.

Speaker #1: It was around that time frame. The EBITDA contribution impact was—some of the issues we have with the ERP were getting costs on the job for both labor and parts.

Speaker #1: Where parts were going into jobs within that energy business, one of the big issues we had with the ERP in that time frame was it was posting parts onto the job either at a value of zero or a dollar.

Speaker #1: We had all the parts, obviously, loaded in the system at their sale price. It didn't function correctly—impeding that, picking it up, putting that onto invoices.

Speaker #1: So, yes, the answer to that question is ERP clearly impacted revenue and hurt us on EBITDA contribution in the second half, especially within the energy business.

Jason Dixon: Yes, the answer to that question is, the ERP clearly impacted revenue and hurt us on EBITDA contribution that H2, especially within the energy business. I guess the reason the impact within the energy business is, I think we do, it is 12,000, 13,000 invoices a year within that business, so it is a very high volume business. Within a reasonably short period of time, when you have something like that is not operating efficiently and effectively, it mounts up in its cost rather quickly. To have an issue for that period in there with the launch of that system, we then had to go back and review a whole heap of invoices had gone out. I think it was around 900 in total. We then had to manually review and try and correct and sort the systems out.

Speaker #1: And I guess the reason it impacted within the energy business is, I think we do—it's 12,000 or 13,000 invoices a year within that business.

Speaker #1: So, it's a very high-volume business. So within a reasonably short period of time, when you have something like that that's not operating efficiently and effectively, it mounts up in its cost rather quickly.

Speaker #1: So, to have an issue for that period in there with the launch of that system, we then had to go back and review a whole heap of invoices that had gone out.

Speaker #1: I think it was around 900 in total. We then had to manually review and try to correct and sort the systems out. So, it not only had an impact in terms of revenue, but it also had the impact of additional costs that came into the business on that front as well.

Jason Dixon: It not only had an impact in terms of revenue, it also had an impact of additional costs that came into the business on that front as well. I am just looking at questions that are being closed out. Sorry, they are not being marked as complete, so it is a bit hard for me to see what has not been answered. I think there is one to go. Provided our guidance for the group for FY27 statutory and normalized. Clearly, we have not done that. You do not do forward-looking statements of statutory and normalized at this time. It is very early in the year. This is the result. We have come out and said we expect the year to be stronger year-on-year. Normally, I guess we would say, you could take a stronger view. Clearly, the issue is within the Middle East and that Baltic order timing.

Speaker #1: So, I'm just looking at questions that have been closed out. So, they're not being marked as complete. That's a bit hard for me to see.

Speaker #1: What hasn't been answered? So, I think there's one to go. Provide EBITDA guidance for the group for FY27, statutory and normalized. Clearly, we haven't done that.

Speaker #1: We don't provide forward-looking statements, statutory or normalized, at this time. It's very, very early in the year—these are just the results. However, we have come out and said we expect the year to be stronger year-on-year.

Speaker #1: Normally, I guess we'd say you could take a stronger view. Clearly, the issues within the Middle East and that Baltic border timing—I think about 20% of our business is sort of Middle East, Asia.

Jason Dixon: I think about 20% of our business is Middle East, Asia. On that basis, it is a little harder to forecast right now in Baltec than we would reasonably normally see. We have still got the pipeline. I think at this point in time, we are just satisfied to say that we expect EBITDA to increase on the prior comparable period, and we are seeing improvement in margins. It looks like the questions have now been closed down. Gareth or Paul, have you got anything else you would like to add?

Speaker #1: So, on that basis, it's a little harder to forecast right now in Baltic than what we'd reasonably normally see. We've still got the pipeline out there.

Speaker #1: So, I think at this point in time, we're just satisfied to say that we expect EBITDA to increase on the prior comparable period, and we'll see an improvement in margins.

Speaker #1: So, it looks like the questions have now been closed. I know Gareth or Paul—have you got anything else you'd like to add?

Speaker #3: No, I don't think so, Jace.

Paul Gaskett: No, I do not think so, Chase.

Speaker #1: Gareth?

Jason Dixon: Gareth?

Speaker #3: Nope. All good from my perspective.

Gareth Nicholls: No. All good from my perspective.

Speaker #1: So, Operator, I'm happy to hand back to you. I'm not sure there are any outstanding questions. They all appear to be closed out on the screen now.

Jason Dixon: Operator, I am happy to hand back to you. I am not sure if there are any outstanding questions. They appear to all been closed out on the screen now. Back to the Operator for any further questions you might have.

Speaker #1: So, back to you, operator, for any further questions you might have.

Speaker #4: Thanks, showing no further questions.

Operator: Thanks. Showing no further questions.

Speaker #1: Yep. Okay. Well, thanks, everyone, for your time. Appreciate you giving us your time again. Hopefully, we look forward to a stronger and better FY27.

Jason Dixon: Well, thanks everyone for your time. Appreciate you giving us your time again. Hopefully, we look forward to a stronger and better FY27. We will speak to you soon. If anyone has got any questions, feel free to send us an email or drop us a note. Thanks. Thank you, everyone. Appreciate it.

Speaker #1: We'll speak to you soon. If anyone has any questions, feel free to send us an email or drop us a note. Thank you, everyone.

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Full Year 2026 The Environmental Group Ltd Earnings Call

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