Johns Lyng Group – 2025 Half-Year Results Summary
Website: www.johnslyng.com.au
Overall Report Tone
John’s Lyng Group’s Interim Report presents a mixed performance, with declining revenue and earnings but a stronger gross margin and continued expansion through acquisitions. While operating cash flow weakened, the company remains active in strategic acquisitions and positioned for long-term growth.
Financial Results (Per Share Focused)
| Metric | 1H 2025 | 1H 2024 | % Change |
|---|---|---|---|
| Revenue ($M) | 573.1 | 610.6 | ▼6.1% |
| Adjusted EBITDA ($M) | 52.5 | 61.1 | ▼14.1% |
| Operating Cash Flow ($M) | 5.1 | 11.6 | ▼56.0% |
| Adjusted EBT ($M) | 31.4 | 45.9 | ▼31.6% |
| Normalised EPS (cents) | 5.17 | 8.47 | ▼39.0% |
| Interim Dividend (cps) | 2.5 | 4.7 | ▼46.8% |
New Information from Latest Report
- Revenue decline of 6.1% driven by an $81.6M drop in Catastrophe (CAT) work, offset by a $44.1M increase in Business-as-Usual (BaU) revenue.
- Gross margin improvement to 26.5% (vs 24.7%), driven by acquisitions and job mix.
- Profitability decline with NPAT down 38.1%, impacted by higher overheads.
- Significant acquisitions:
- Chill-Rite (HVAC services, NSW) – 84% stake.
- SSKB Strata (East Coast Australia) – 100% acquisition.
- Keystone Group (Insurance Building & Restoration) – 87.5% stake.
- Debt increased significantly with non-current borrowings up 311% to $154.8M (vs $37.7M at FY24).
- Dividend cut by nearly 50%, reflecting earnings decline.
Positive Surprises & Potential Concerns
✅ Gross margin expansion suggests effective cost management despite revenue drop.
✅ Acquisition strategy continues, enhancing long-term revenue streams.
⚠️ Sharp earnings decline, down 38.1%, may impact investor sentiment.
⚠️ Significant increase in debt, raising concerns about leverage.
Result vs Market Expectations
📉 Revenue of $573.1M fell below the implied run rate for FY25 ($1.254B expected by analysts).
📉 EBITDA down 14.1%, suggesting analysts may revise forecasts downward.
📉 Dividend cut indicates weaker near-term earnings outlook.
Outlook & Guidance
🔹 Management remains focused on BaU revenue growth and post-acquisition integration.
🔹 CAT revenue remains unpredictable, but BaU revenue is expected to remain stable.
🔹 Higher interest costs expected, given increased borrowings.
🔹 Profitability pressures likely to persist unless significant cost efficiencies materialize.
Market Positioning
Analyst Positioning (Based on Provided Forecasts)
- FY25 revenue forecasts of $1.254B appears challenging, as 1H revenue suggests a shortfall.
- FY25 EBITDA will likely be revised downward, given the 14.1% EBITDA decline in 1H.
- FY26 estimates of $1.355B revenue and $149.2M EBITDA may also face downward revisions, especially with rising interest costs and uncertain CAT work.
- Dividend cut further dampens sentiment, likely leading to lowered expectations.
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.
Quick Take: H1FY25 ASX:JLG