Austin Engineering – 2025 Interim Results Summary
Overall Report Tone
Austin Engineering (ASX: ANG) has reported strong revenue and earnings growth for FY25 H1, with standout performances in North America and APAC. However, operating cash flow challenges and margin pressures in South America are key considerations. The order book at a multi-year high reinforces confidence in future growth, and the company has reiterated its full-year guidance.
Financial Results Summary
| Metric | FY25 H1 | FY24 H1 | Change (%) |
|---|---|---|---|
| Revenue | $170.2M | $143.6M | +18.5% |
| Underlying EBITDA | $25.3M | $20.8M | +22.0% |
| Operating Cash Flow | $(3.5M) | Positive | Negative |
| Adjusted Earnings Before Tax (EBT) | $20.0M | $15.8M | +27.0% |
| Normalised NPAT | $17.4M | $15.0M | +16.0% |
| Normalised EPS | Not Disclosed | Not Disclosed | – |
| Dividend (Interim, Fully Franked) | 0.6c per share | 0.4c per share | +50% |
Positive Surprises / Strengths
- 📈 North America revenue surged 52% due to repeat orders and new customer growth, reflecting strong market demand.
- 🏗️ Order book increased by 22% to $224M, the highest in recent years, providing strong revenue visibility.
- 💰 Interim dividend up 50% to 0.6c per share, highlighting management confidence in cash flows.
- 🌍 APAC profitability doubled, with margins expanding to 21% after restructuring efforts in Batam.
Potential Concerns / Risks
- 💸 Operating cash flow turned negative ($3.5M), mainly due to higher APAC inventory and delayed customer payments.
- 🏭 South America EBITDA fell to zero as a major multi-year OEM program reorganisation impacted margins.
- 📊 Higher effective tax rate of 14% (vs. 5% in FY24 H1) due to the tax position of US and Indonesia operations.
- 💳 Net debt increased to $10.5M, reflecting higher inventory build-up and capital expenditure.
Result vs Market Expectations
- ✅ Revenue growth of 18.5% exceeded expectations, driven by strong order flow in North America and APAC.
- ✅ EBITDA growth of 22% was solid, underpinned by efficiency improvements in Batam and stronger North American margins.
- ⚠️ South America’s margin collapse was likely a negative surprise, though it is expected to improve in H2.
- ⚠️ Cash flow deterioration may cause concerns if not reversed in H2.
Outlook and Guidance
- 📈 FY25 full-year revenue expected at ~$350M, up ~12% from FY24.
- 💵 FY25 EBIT forecasted at ~$50M, up ~30%, reinforcing earnings growth momentum.
- 📊 Order book strength provides a clear multi-year growth trajectory.
- 🏗️ H2 operating cash flow expected to improve, with the unwinding of APAC inventory and delayed customer payments now received.
Analyst Positioning
Revenue and EBITDA Performance
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H1 FY25 Revenue: $170.2M (18.5% YoY growth)
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H1 FY25 Underlying EBITDA: $25.3M (22% YoY growth)
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Analyst Forecasts:
- FY25 Revenue: $351.5M
- FY26 Revenue: $379.4M
- FY25 EBITDA: $60.3M
- FY26 EBITDA: $66.4M
Assessment:
- With H1 FY25 revenue at $170.2M, the company needs a similar H2 performance to meet the $351.5M FY25 forecast.
- Given EBITDA at $25.3M in H1, the company must improve to achieve the full-year target of $60.3M. The strong order book and expected H2 operational cash flow improvement may support this.
“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:ANG