Ambertech Limited (AMO) Earnings Call Transcript & Summary

Good afternoon, and welcome to Ambertech Limited's Full Year FY '25 Results Webinar for the financial year ending 30 June 2025. Presenting today is Ambertech's MD, Peter Amos; and COO, Robert Glasson. Today's format will begin with a run-through of the results presentation followed by a Q&A session. [Operator Instructions] I'll now pass to Peter.

Good afternoon.

Good afternoon.

That's Robert and myself, Peter. A quick run-through, and I'll be going back and forth between Robert and myself on this presentation depending on the requirements. But I'll start off with a quick recap of the business as to what it is for the new people. Amber technology is a value-added distributor, and it's broken into 3 segments in relation to its operational function, Integrated Solutions having commercial focus and residential and Specialist Hi-Fi. The Professional area, which is a traditional area where it came from is media systems, defense law enforcement, professional products and musical instruments, and our final segment being Retail, which is focused on the major retailers within this country. Next slide. The executive summary of the numbers being this year, we cracked $100 million, $4.3 million EBIT, $0.8 million NPAT, 9p per share, a 68% dividend payout, which the notice has gone out from today and plenty of operating headroom to go forward with opportunities in the future. I'll hand over to Robert to run through the financials.

Okay. Thanks, Peter. So as Peter mentioned, we hit the $100 million mark in revenue this year, which was up on the prior year. We had strong growth in our Retail segment. We continued our momentum through our main dealer business in Integrated Solutions. The second half, we saw a significant amount of project revenue. Projects that we talked about being delayed in the first half came through in the second half, which was great. Those are at lower margins, the project work, and so that does see a reduction in the margins percentage-wise. The core brands through the distribution business are able to maintain their margins, which has been great. We've had a reasonably disciplined approach to cost management. We recognize that some of those costs we need to leverage going forward with further growth, and we are set up to do that. As a result of some of the lower margins, we have seen a reduction in EBITDA for the half. There were some restructure costs included in that. And below that line, higher financing costs, which we're working to get down as we utilized our facilities to manage growth in revenue. And as Peter mentioned, we've declared today a dividend of $0.06 per share. It really was a tale of two halves. If you look at the two halves there, you can see, in particular, the uplift in the project work from first half to second half, a total of $20.1 million in the project style revenue across the year as compared to just a tick over $18 million the year before, but $15.6 million of that coming in the second half of the year. So that really has been quite the tale from the first half to the second half. I think the highlight there is the cost management in the second half really does show that we're capable of leveraging that cost structure for additional revenue growth, and that will be the story, hopefully, going forward. And significant increase in EBITDA and earnings from first to second half. So just looking at that by segment, you can see there, the growth in Integrated Solutions and Retail areas, Pro, although with significant amount of projects in there across the whole year, some reduction in some of our MI space. So there's some ups and downs in there. But again, you can see that growth across the two halves and obviously, the contribution there by each of those segments as well. I think in the Integrated Solutions space, we continue to be a provider of leading brands. We are increasingly being seen as a tier 1 distributor. In the Retail space, that was a very strong second half to go along with the first half. So maintaining good margins there as well, which is great. And as we've said, those projects came in, in the second half in the Pro segment. Just a very basic EBITDA bridge to see what's happened over the 12 months from last year. The GP contribution was impacted by the decline in margins. We think that's something we can address moving forward. Obviously, the project style business will continue to come in at slightly lower margins. Employment costs has been pressure there, inflationary pressure in the labor market. But again, we believe we've now got that structure right. So moving forward, we can leverage what we've got there to grow further. And we've continued to be very diligent on cost management and other cost categories where we can. From a balance sheet standpoint, obviously, there was some higher inventory balances over the year. We've seen an increase in usage of working capital during that period as well, but that has been unwinding towards the second half of the year and certainly through into the first half of FY '26. We've an increase in NTA as a result of the results for the year. Our operating cash flow was down a little bit with the increase in inventory holding and some higher interest payments. But again, as we move into FY '26, we're seeing those normalize, which is great. I'll now hand back to Peter just for a business update and overview.

Yes. So a bit more detail in relation to the business and where it's going and where it is at the moment, and also subject -- also the size of each individual area. As you can see, Integrated Solutions represents approximately half of the business, and we're only addressing a part of the market. So we have plenty to go in relation to the growth in that area. The Professional segment is a substantial part of the business at $35 million. And again, a more addressable market as we expand into different verticals in that area. The Retail space, we stay very focused in the Retail space in relation to who we operate with, and it's predominantly with major retailers with a limited number of brands. As you can see, there's only 5 brands in that area, but it's with all the majors. And the style of product we are selling is less dependent in relation to the seasonality in those environments. Some of the brands are down in the bottom there, including our own brand being Australian Monitor, which is designed here. And one of the recent brands being ABB, where we've partnered with them to represent them in the commercial and residential space now in relation to their control systems. So business operational highlights. As Robert said earlier, the realignment of the workforce occurred during this year. We refined it to achieve what was going on. The strong dealer base still continues. And as you would have seen in the results, the second half had a lot of projects in it. The customer focus, we're expanding our operations in relation to more education and experience centers. The export market, we've established for Australian Monitor the ability to export and we have our logistics capability now in Rotterdam for that product. We still have slow business internationally with the international marketplace as it is at this point in time, but this year is a year of push further forward in that. The ABB aspect in aligned markets is very important as we grow our pipeline in this area for automation and lighting control as a requirement to automate more commercial buildings to meet all the neighbors' requirements. And the merger and acquisition activities were low this year, even though there's a number being focused on to have a look at and structures, none of the states in the financial year '24 were actually -- or '25, I should say, were acceptable to our requirements. So brand focus and brand recognition. We are focusing heavily on the current brand that we have to the point where we're reducing the number of brands, if not expanding, in those areas, getting more out of what we've got in line with Robert's earlier statement. Aligned vertical markets. So we're going into different verticals to improve the business with the current brand set. And we've added more resources into those environments to improve those areas with education programs. So more of the brands in the case of the major retailer, it's Universal Electronics and Williams AV, where we actually have some growth occurring at this point in time with new technology being broadcast. Strategy and outlook. Who is going to do this one? You or me, Robert?

No, you can do this one, if you like.