Ambertech Limited (AMO) Earnings Call Transcript & Summary

Good afternoon, and welcome to Ambertech Limited's Half Year FY '26 Results Webinar for the financial year -- financial period ending 31 December 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, followed by a Q&A session. [Operator Instructions] I'll now pass to Peter.

Good afternoon. I'll just do the introductions in relation to the business just for the people who don't know us. If we go to the next slide, Robert. As you'll see the businesses are structured into 3 verticals being integrated solutions, professional and retail. These 3 disciplines have their own arrangements. So within integrated solutions, we have commercial installation, residential installation, specialist Hi-Fi. We're focusing on the commercial world being our largest part of our business in that area. Professional is our traditional area of the business where we started in media systems, and that means related to broadcast and post production in both pitches and sound, defense and law enforcement and professional products, which is the rest of camera support structures and lighting systems within studios. We have an additional section there called Musical Instruments, which is an adjunct to the professional side of the business. And our last vertical being the retail environment where we're working with major retailers supplying remote control systems and protection technology. Within it, there's over 140 staff. We operate between Sydney, Melbourne and Auckland, New Zealand, and then we have satellite offices in the other areas. So the overview of this half would be that revenue has gone up, the margins are slightly down in relation to previous structured years and then $1 million EBITDA. Unfortunately, the performance in the NPBT was not that great. And then we'll discuss the statutory loss in detail as we go forward.

I think just to call out there, too, Peter, that NTA is actually above the current share price. So that's worth noting.

Correct.

I'll carry on from there, if you like. As Peter said, revenue up for the period despite the challenges in market conditions, and we'll get to where we're the strongest in just a moment. But in particular, to note that cost of goods and the GP structure actually related to product mix sales, not necessarily pressure on GP. So a greater input from the project business during the period, and that tends to come at slightly lower margins. Despite that, we've managed to keep operating costs relatively under control and EBITDA normalized largely in line with the previous corresponding period. We are seeing higher interest costs due to some increased stockholding just at the moment, and that leads to the discussion on why we've taken some one-off charges for the period, in particular in relation to goodwill impairment and obsolescence provision. And the reasons for that we'll discuss as we go along, more so in line with the business strategy, fast-tracking business strategy. So if we look at the performance by segment, you can see there slightly down in the Integrated Solutions area on top line compared to the prior year, a difficult market. A lot of spending freezes, just starting to unwind now, but what we found there, just I think the global uncertainty, in particular, not just the domestic market, seen that dealer number come down a little bit during the period. Still strong belief in that area, in particular, the commercial business, which is the largest part of our business. You can see some success in the professional segment, and that's a result of more project deliveries in the first half of the year than the same period last year. You'll recall, we had a very slow period in that previous corresponding period for projects and slightly down in the retail segment where we've seen some discretionary spending reduction, I think, in particular, the CE retailers talking about lower TV sales, and that tends to affect open to buy and other categories where we sit. You can see there that the impact of that increase in the Pro segment starting to return. It's the area we've probably spent more time doing some refocusing ahead of the others, and it's starting to show dividends there, which is good, but still some way to go. Looking at the balance sheet. So obviously, lower costs -- lower cash, sorry, impacted by those trading conditions and higher inventory holdings. It can be difficult sometimes when you're increasing ordering for the busy period if it's not quite what you want it to be, then you can be caught temporarily with higher inventory. That's something we're going to address. And as I said earlier, that targeted obsolescence provision is really aimed at trying to fast track reducing some of our aged stock, not so much obsolete, some obsolete, but mostly aged. And what we want to do is tie up -- is release cash tied up in stock so that we can move along with some of our initiatives that we've got in place to grow the business more sustainably on a stronger base. It's time to move on that. And so that's why we've taken that provision at the half. The working capital facilities are still working scaling as they need to. NTA higher than the current share price, as we mentioned, that's worth noting. Peter, over to you.

Yes. So the growth strategies in the business, as Robert alluded to, we have a number of projects or initiatives we'd like to continue with. We note that the building automation and control area is a good area, which we are spending a reasonable amount of investment and time on as the requirement to be more efficient in that area is mandated. Critical Communications in relation to high need areas in relation to prisons, transport areas for communication structures, and that's the brand with zenitel. We're starting on that, and we're actually starting to have some wins. Assistive Communications, there's been a change in the world there. Our incumbent brand being Williams has moved into a new technology being Auracast, and that has now driven the sales in that area, and we expect that to be mandated across all disciplines within Australia and New Zealand. Commercial AV, we've had some structural change there where we've advanced with Sonance in relation to going more into the commercial sound reinforcement area with that brand, and that's proving to be very successful. And our own brand being Australian Monitor continues to develop the brand in the marketplace and there's been a further push into the international area. Key priorities, customer experience. Obviously, very important, we are a customer-focused company. Therefore, we focus on all the areas to give them a positive experience working with us. The brand focus, we've been working heavily on just reducing our brand structure and the fact that we get more out of what we have and taking the company forward in that area, so we have more focus. Working Capital Management, obviously, Robert alluded to that earlier. We're doing some stock reduction areas there and making allowance of that to improve our resource into the capital management area. And Cost Discipline via Benchmarking, we've had a number of initiatives recently to improve that area as well. The Strategy and Vision of the business is, as it says, go forward, implementing all the things we've talked about there and stay sustainable and a solution mindset. Robert?

I can go the outlook. Sure. So as Peter mentioned, I mean, there are a number of growth initiatives that we have in place that we think will improve financial performance and better convert cash from existing assets that will begin. In fact, we are underway with that. We are working on accelerating clearing aged inventory so that we have a greater focus so that we can reinvest funds into the strategies that we know will, on a medium and long term, give us more sustainable growth. That's something that's very important. I think the second half of the year is something will continue to be a period of transition as we start to work on our action plans in that place. We think that the second half underlying performance will show improvements, but the full effect of the strategy will take some time to come through in the numbers fully. A call out there to the building automation space. We are definitely continuing to see pipeline of orders and projects growing there. We're starting to deliver some of those, and we think that's an area where we can see significant growth opportunity beyond this current year as well. And as I said, the full financial benefits of the changes we're making will continue to emerge beyond the second half of this year and into FY '27. And I think with that, if there's any questions, Mel.

No questions have come through. We'll just wait a couple of minutes and see. All right, Robert, it looks like no questions are coming through for today's results. If anyone does have any later on, feel free to e-mail me, and I'll come back to you over e-mail. I'll pass to you for final comments, Robert.

Yes. I just want to thank the investors for their continued support. We know the result is probably not where we want to see it for that half, but there is definitely a strategy in place to return it to more sustainable results for shareholders. Board and management are aligned, and we're enacting those plans as we speak.