Acrow Limited – 2025 Interim Results Summary
Website: www.acrow.com.au
Overall Report Tone
Acrow Limited reported strong revenue growth but faced profitability pressures due to acquisition-related expenses and changes in revenue mix. Despite a 25% increase in revenue, net profit declined by 24%, reflecting increased acquisition costs, amortization, and a shift toward lower-margin industrial services. The company continues its strategic expansion in industrial services, with further investments in acquisitions and capital expenditures.
Financial Results
| Metric | 1H25 | 1H24 | % Change |
|---|---|---|---|
| Revenue ($m) | 126.6 | 101.0 | Up 25% |
| Adjusted EBITDA ($m) | 39.0 | 35.2 | Up 11% |
| Operating Cash Flow ($m) | 16.9 | 21.0 | Down 19% |
| Adjusted Earnings Before Tax ($m) | 14.98 | 18.60 | Down 19% |
| Normalised EPS (cents) | 5.38 | 5.87 | Down 8% |
| Dividend Per Share (cents, fully franked) | 2.90 | 3.00 | Down 3% |
Positive Surprises / Potential Concerns
✅ Revenue increased 25%, driven by strong industrial services performance.
✅ No bad debts were recorded, showcasing strong credit management.
⚠️ Net profit declined by 24%, impacted by $2.7m contingent acquisition costs.
⚠️ EPS fell 8%, due to a higher share count and lower margins from industrial services.
⚠️ Debt increased to $92m (from $68.6m), raising net debt to EBITDA from 1.1x to 1.3x.
Results vs Market Expectations
📉 Net profit decline of 24% may be a concern for investors despite stable underlying profit.
📈 Revenue growth of 25% exceeded expectations, particularly in industrial services.
📉 EBITDA margin declined from 34.8% to 30.8%, due to higher labor costs in industrial services.
📉 Dividend slightly lower at 2.9 cents, which could signal a cautious approach to capital allocation.
Outlook & Guidance
📌 The company is focused on expanding Industrial Access operations, with recent acquisitions reinforcing this strategy.
📌 Expecting improved cash flow as acquisition costs normalize and contract revenues stabilize.
📌 Debt remains within bank covenants, but leverage should be monitored.
📌 New acquisition of Australasian Training & Education Centre aims to support workforce skills development and generate external revenue.
Analyst Positioning
Based on Acrow Limited’s half-yearly financial report for the period ending 31 December 2024, here is an analysis of its performance compared to analyst forecasts:
1. Revenue Forecast Comparison
- 1H 2025 Revenue: $126.59M (up 25% YoY from $101.04M)
- Implied FY 2025 Revenue (Assuming Similar Growth in H2 2025): ~$253M
- Analyst FY 2025 Revenue Forecast: $271.71M
- Analyst FY 2026 Revenue Forecast: $290.68M
💡 Analysis: If the second half of FY 2025 experiences similar growth, Acrow will likely fall short of the analyst revenue forecast for FY 2025. However, stronger performance in Industrial Access and acquisitions could help close this gap.
2. EBITDA Forecast Comparison
- 1H 2025 Underlying EBITDA: $39.03M (up 11% YoY)
- Implied FY 2025 EBITDA (Assuming Similar Growth in H2 2025): ~$78M
- Analyst FY 2025 EBITDA Forecast: $85.51M
- Analyst FY 2026 EBITDA Forecast: $91M
💡 Analysis: Based on current trends, Acrow may underperform relative to the analyst EBITDA forecast unless cost efficiencies or higher-margin revenue streams improve.
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:ACF