IPD Group Limited (IPG) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the IPD Group Limited FY '24 Results Call. [Operator Instructions] I would now like to hand the conference over to Mr. Michael Sainsbury, CEO. Please go ahead.

Thank you very much, and welcome, everybody, to IPD's Financial year 2024 Results Call. I appreciate taking the time to be here with us today. We're very proud to release a really strong set of numbers, and I'll go through that. For those of you who are viewing the slide deck or have a hard copy in front of you, I will on occasions, talk to what slide we're on, so you can be at the appropriate page. Obviously, on Slide 2, there is our notice and disclaimer. I won't go through that. I'm sure a lot of you would be familiar with that. In terms of presenters today, you've obviously got myself as the Executive Director and Chief Executive Officer. I'm joined by Jason Boschetti, our Chief Financial Officer. We also do have Mohamed Yoosuff, Executive Director of Strategic Development in the room, although he'll be pretty quiet. And David Rafter is our Nonexecutive Chairman in the room. In terms of the flow for today, we'll obviously talk about an overview of our results. Jason will go into a deeper dive there around some of the financial parameters. I'll then give a little bit of an update from a market and business perspective. We'll then talk a little bit about our strategy and outlook moving forward. And then we will open the call up to questions and answers. Moving on to Slide 5. It would be remiss of me not to talk to our vision and mission while I had the years of everybody here because it is at the core of it, what we're here to do on a day-to-day basis. Our vision as an organization, is to help build a future where sustainable electrical infrastructure creates a better life for all. How are we going to do that? Our mission statement is to enhance every aspect of electrical infrastructure through energy efficiency, automation and secure connectivity while prioritizing the safety and wellbeing of people. And at the end of the day, that's a great snapshot about our focus as an organization. Slide 6 is ahead of page there about the overview, moving straight on to Slide 7. An IPD group now we've changed a lot over the last couple of years. When I talk at a group level now, the company consists of 4 diversified but very complementary businesses. If I talk to the traditional IPD business, which is in the top left-hand side there, it is very much a product distribution business, product and solutions, and we focus on power distribution, motor control, automation, energy management and power quality. We also have local customized capabilities to do customized assemblies for our customers as the value add, and it is the largest part of our total business. The second business there is a business called Addelec Power Services, and there's been some changes in that business over the last couple of years with the integration of the Gemtek business. So what that business is now is a specialized end-to-end solutions provider in the electrical infrastructure space with a very, very strong focus on electric vehicle rollout. Their core competencies or our core competencies are around design, in-store, test and commission. The third business there down the bottom right is CMI, our most recent acquisition. We've now had it under our ownership for 5 months. CMI has 2 distinct different parts to its business, the first of which is distribution of specialized cabling solutions, which they take to market. It is very, very specialized. It's not in the residential flat cabling space, so it does protect us from that commodity aspect in cabling. The second part of their business is a manufacturer and distribution of hazardous area plugs and sockets. Traditionally, their core markets have been in the underground mining space. And where they've developed a Minto 2 offer, which also has capacity to be able to go into aboveground applications in infrastructure, in food and beverage, in oil and gas and many other applications as well. And the last part of our business there is EX engineering. We had that as under our ownership for 11 months of the financial year. EX Engineering is traditionally a design, manufacture, test and commissioning business of hazardous area customized solutions. It is a Perth-based business and 100% of its revenue is derived from that geography. And we are looking to expand that into other geographies over the next 12 months. So when we talk at a group level now, it's important that we understand that there's 4 distinct businesses that make up that group. On the right-hand side of the slide there, you can see there, I guess, the life cycle of a product from a customer's perspective. And there's 4 quadrants there. Designing and planning, procurement and installation, testing validation, as well as operation and maintenance. The really good part of our business is that all 4 of those businesses are able to support the customer through the complete life cycle of the product. A large portion of IPD business goes into new installation, but certainly, a significant part goes into maintenance and repair and operations. Addelec are doing design, they're doing install, they're doing repairs and servicing and ongoing maintenance contracts. So the whole business is well diversified, and it gives us a great ability to be able to maintain a strong relationship with our customer over the full life cycle of the product, giving us the ability to add customer value across that entire chain. If I move on to Slide 8, which is obviously a corporate snapshot. A lot of you would be familiar, but I'll quickly cover it. Our ASX code is IPG. Our share price as at the 22nd of August was $4.75, Pleased to say that it's opened strongly this morning. Our IPO date was the 17th of December 2021. We have just over 103 million shares on issue. We have a net debt of $8.8 million and a market cap based on that share price of $4.75 at $491 million. Our Board consists of 4 individuals David Rafter is our Non-Exec Chair. Andrew Moffat as a Non-Exec Director; myself as Executive Director and CEO; and Mohamed Yoosuff Executive Director of Strategic Development. The Board is a very well-operating cohesive unit. We have a really good diversity of expertise across there and a strong relationship and really work well together as a group to ensure the best interest of shareholders for the future. If I talk about share price, we show that graph back to our IPO date where we listed at $1.20. So it's seen strong growth over the last couple of years, which we're really proud of. The shareholder breakdown is, as it stands now, external 79% and 21% owned by our Board, our management and our employees. Moving on to Slide 9, and this is really where the rubber starts to hit the road. From a headline perspective, it's fair to say that the continued growth exceeded the top end of our guidance that we put out in May. At a revenue level, we're reporting $290.4 million at a revenue level, which is up 28% on the prior comparative period, at EBITDA level, $40.1 million up 44.8% on the prior comparative period. At an EBIT level, $34.3 million, up 46.6% on the prior comparative period. And net profit of $23.3 million, up 44.7% on the prior comparative period. One of the great results over the last 12 months, and we talk about the best interest of our shareholders has been the underlying earnings per share at $0.242, up 30.1% on the prior comparative period, and I'm sure all of you would be pleased to hear that. In terms of net assets, we're reporting $150.7 million, up from $72.9 million at the end of the last financial year. Our net debt at $8.8 million with $31.1 million of borrowings as of the 30th of June. What's really important to point out there, and we didn't have enough boxes on this page to be able to include everything, but our cash conversion at 88% is a really incredibly strong result and one we're very proud of. In terms of capital raise, we raised $65 million in the financial year, which was solely used for the acquisition of CMI as a combination of that raise some debt and some cash. From a safety perspective, our lost time injury frequency rate of 1.9% is well below the industry average at circa just over 6%, and I'm really also pleased to announce that we've now gone over 400 days since our last lost time injury. And when you consider the work that we do in a lot of moving of products and warehousing with forklifts, a lot of people out on the road in cars, electrical contracting business in a high-voltage environment and manufacturing, that is a fantastic result from a safety perspective. And we're also pleased to announce our total dividends for the financial year of '24 at $0.108, which represents a 50% payout and is obviously fully-franked. Moving on to Slide 9, which is the headline of financial performance. At this point in time, I'll hand over to Jason Boschetti to run you through at a more granular level that financial performance. And if you'd all like to make your way on to Slide 11, Jason will cover off those details.

Thanks very much, Michael. Yes, as Michael has just mentioned, I'll start on Slide 11 with our financial overview. Really pleased to announce our strong EBITDA, EBIT and Net PAT growth for the year. These results for the group drives earnings above the top end of our guidance range. I won't go through the table in significant detail. Michael has identified a lot of the highlights, and we have a few more slides on sales and earnings growth later in the deck, but I'll call out a couple of highlights on Slide 11, around underlying Net PAT growth of 44.7% on the prior comparative period. We've had 2 exciting acquisitions during the year. EX Engineering, just as a refresher for everyone on the call, was acquired on the 21st of July 2023, and CMI Operations was acquired on the 31st of January 2024. Both of those acquisitions have contributed to the group's expanding EBITDA, EBIT and NPAT margins. As expected, the CMI operations as an operating business have higher EBITDA, EBIT and Net PAT margins, and that will continue to have an accretive impact on the consolidated group into FY '25. And as expected, CMI Operations lower operating gross profits will continue to have a dilutive impact on gross profit margins. The underlying earnings per share of $0.242 for FY '24 is remarkable 30.1% up on the prior comparative period. I'll skip over to Slide 12. Sales and earnings growth. So a record revenue of $290.4 million, up 28% on the prior comparative period. And obviously, the acquisition of EX Engineering and CMI Operations have contributed to that growth this financial year. There is strong revenue growth, as you can see in the graph to the right there, which is displayed by 35% CAGR over the last 5 financial years from FY '20 to FY '24. Our underlying EBITDA of $40.1 million is up 44.8% on our prior comparative period. Our continued growth for the group drives our earnings above our top end of our guidance range. And as explained in the previous slide, EX Engineering and CMI Operations have higher EBITDA margins that have contributed to the group's expanding EBITDA margins in the graph to the right. And they will continue to have an accretive impact into FY '25 on that basis with a full 12 months of CMI and EX Engineering's earnings in the consolidated group into FY '25. I'll move along on to Slide 13. Slide 13 is our pro forma financial performance. It's a comparative pro forma basis that demonstrates that IPD has delivered gross profit, EBITDA, EBIT and Net PAT growth on FY '24. These pro forma financials include the financial performance of EX Engineering and CMI Operations prior to acquisition, and exclude acquisition-related costs. They are a relative like-for-like basis. Really important to highlight the pro forma FY '24 results and just to show the scale of the business. If you look back to Slide 12, IPD Group had revenues of $87 million back in FY '20. And on a pro forma basis for FY '24, that now stretches to $350 million for the group. They're strengthening gross profit, EBITDA, EBIT and Net PAT margins on a pro forma basis and our pro forma earnings per share are $0.285 for the pro forma year FY '24. The traditional IPD business, which composition is IPD Group and Addelec Power Services and EX Engineering both achieved pro forma double-digit EBIT and Net PAT growth during FY '24. It's worth calling out while CMI Operations had revenue growth during FY '24, there was a decline in Minto export sales due to the Indonesian government's temporary ban on mining exports, which ended late FY '24. The resulting sales mix shift, combined with some one-off relocation costs and facility costs, resulted in an EBIT and Net PAT decline for CMI on FY '23. I'll move on to Slide 14, talking about IPD Group's balance sheet and strong flexible financial position. The graph to the side shows the growth in our net assets over the last 5 years with net assets now at $150.7 million. After the acquisition of CMI Operations on the 31st of January and EX Engineering on the 21st of July 2023. After the acquisition of CMI Operations, the group utilized $31.1 million from the newly acquired $40 million CBA acquisition debt facility to partly fund the acquisition of CMI Operations. However, at the 30th of June 2024, the group has a net debt of $8.8 million with $22.3 million of cash and $31.1 million in borrowings on its balance sheet. I'll move on to Slide 15, to focus on our balance sheet and specifically talk about our net working capital and dividend. Net working capital of $76.9 million. That increased by $29 million on our previously reported numbers at the 31st of December 2023 with $28.9 million to that entire amount contributed by the addition of EX Engineering and CMI Operations. That net working capital movements and strong financial results has operated in a strong free cash flow conversion, which is an operating cash flow before interest and tax, which rose 37 points from 51% in FY '23 to 88% in FY '24, as Michael Sainsbury pointed out on the financial outlook slide. Dividends declared for the second half of FY '24 of $0.062 per share. $22.4 million in Net PAT from ordinary activities after acquisitions costs was 39.1%, up on the prior comparative period at a statutory perspective. A fully franked dividend of $0.62 per share declared for the second half, which results in total dividends declared for FY '24 of $0.108 per share versus the prior period of $0.093 per share, equating to a total payout to our shareholders of $11.2 million and a payout ratio of 50%. I'll hand back to CEO, Michael Sainsbury.

Thank you, Jason. Much appreciated. So moving through Slide 16 and straight into Slide 17. There's no doubt that the business in the short-, medium- and long-term will be supported by some strong fundamentals and the value proposition that we have will be certainly in conjunction with those tailwinds will support growth into the future. If I talk specifically around the megatrends that I make reference to there, and I'd call out 5 key areas that will facilitate growth for us into the future. The first one there being geopolitical shifts. What we're seeing in this space here is a change being driven by legislative changes influencing energy policies. And in our space, without making all of your technical experts in the next 5 minutes, I talk about neighbors' compliance, which is in any building, the required amount of energy management that needs to be in there. And then whenever you sell or lease a property, it has to be upgraded to comply with those neighbors' requirements, pulling through a lot of our product. With data centers, we're seeing a massive increase in data centers, 2 reasons: the emergence of AI. And the other thing is they're here in Australia, the data sovereignty regulations that the government is introducing, meaning that all data has to be stored onshore, not offshore, so driving a massive uptake in data centers in our own geography. There is compliance-related upgrades in the switchboard, which is around meeting with relevant global standards around IEC-61439. And in many geographies around the country, in many states, we're seeing government legislation banning gas and the divergence from gas to electric is also driving increased investment across the whole building -- all of the building as well as the infrastructure side. So these ones are being forced on customers from a legislative perspective. It is not a choice that these people can make. It is being pushed down. If I talk about urbanization, we obviously have a phenomenon of a growing and aging population, which is driving expansion into places like hospitals, shopping centers, medical centers, retirement village, and certainly an increased infrastructure requirements on the back of this urban sprawl. And that is certainly adding a significant opportunity for us to attach to, given our portfolio. In regards to sustainability, there is a massive focus by organizations across the board and reducing their carbon emissions. And what that means, we're seeing a big shift towards renewable and sustainable energy practices, which is meaning more switchboards, more cable, more infrastructure and driving all of the products that we're able to take to market. The other one there is in the electrification space. We're obviously seeing a transition to electric power in transport industry and infrastructure. And there's no better example of that than in EV charging. And when I said, and I've said it before, and I'll call it out again, 70% of the investment attached to an EV charging phenomenon is actually sitting behind the charger in infrastructure to be able to support those charging requirements. And the last one there around the digital and technological transformation advances in technology is enabling smarter energy management, and it's facilitating the need for sites to upgrade their facilities to bring it in line or introduce these new technologies. Things like automation, the safety that's brought from automation, the lower operating costs is meaning that sites are always looking to upgrade their facilities and a massive requirement for data centers to accommodate the rising storage requirements driven by this. So at a headline perspective, there are multiple opportunities there for us to attach ourselves in terms of growth. Our unique value proposition means that how are we going to drive revenue from that. We're certainly going to do it around product specification and the supply of those products. We'll do it around engineering and installation and will be there to support our customers through the full life cycle of that product for maintenance, repair, operations and obviously, upgrades into the future. So a very, very, very strong fundamentals supporting our business. Moving forward to Slide 18. I mentioned before the fact we consist of 4 individual businesses. My aim here is to give you just some of the initiatives we're looking to introduce, and we have introduced over the last 12 months in each of those businesses that will underpin growth. If I talk specifically to the IPD business, the biggest part of our business and the core of the business from a history perspective, we have made a significant investment into demand creation and specification. And that will certainly drag us into the key verticals around mining, around data center, and water, wastewater. And at length links in with those megatrends I mentioned on the previous slide. We certainly have an ambition to grow our market share. We talk about organic growth. We have a very, very broad range of products and solutions in our portfolio at the moment. And our expectation is to take them and then specifically in the power distribution space where we take the ABB product to market, our market share is still circa 10%. And globally, that's around 30%. So there's still massive growth opportunities attached to our power distribution portfolio into the future. When we talk about future expansion and that organic growth, we intend to expand our offer. In the last 12 months, we've included motors as part of our portfolio, and that fits very much in around the energy management play. We're introducing load management for EV charging where sites don't have the power to be able to facilitate the EV charging, a load management system gives that end-user the ability to manage their electricity, a lot better without having to invest in expensive battery energy storage systems or renewable energy systems or upgrades of transformers and substations. And of course, we'll continue to look for operational improvements to increase customer -- operational improvements to make sure we continue to increase our customer satisfaction, but also improve our cost model. And we've seen that in our logistics in the last 12 months, we've made some changes there. The uptake from a customer perspective, the satisfaction has been strong, but it's also facilitated some bottom-line growth for us as well. In major projects, we call out a number there. We go into the new year with a very, very strong order book. We are well attached to a global leader in the data center space. We've secured large forward orders that will take us out until June next year. And that's forecast to increase by 25% year-on-year with that data center looking to expand into the future. So, a significant opportunity for us there. We're working with a national car dealership group. That car dealership group is supplying EV chargers to the dealers around Sydney, and we'll have them installed in all of those dealers for them to be able to charge their cars there, but also as an option to be able to sell to every person who buys an electric vehicle through those car dealers as well. One we will call out there the Powerhouse Museum at Parramatta. In Sydney, we currently have the Powerhouse Museum down at the rocks here in Sydney, and that's being relocated as a marquee project out to Parramatta. And pleasingly, we have been successful in securing all of the low-voltage switch gear and the distribution boards for that facility there using the ABB equipment and through one of our very, very strong partners for a switchboard manufacturer. A lot of people would be familiar with the upgrade of Darling Harbour now called Harbourside, and we have received significant orders for busduct there. Busduct replacement for cable a structured cabling system, and we've been successful in securing all of the busduct to that Harbourside facility, which is a great feather in our cap as well. And then in the renewable space, I call out a number of projects there where they're large farm scale solar or largest solar systems, where we have been successful getting our products into those renewable applications. So a very, very, very strong successful year in that space, but some significant opportunities into the future and certainly a strong order book moving forward. If I move on to Slide 19, which is the Addelec business. The Addelec business, obviously driving sustainable electrical infrastructure. The initiatives that we've done there over the last 12 months is we've integrated the Gemtek and Addelec businesses, allowing us a couple of things, wider geographical coverage, but certainly an increase in the skill set and the ability to bring that all into one house without having to subcontract or margin-on-margin implications where it goes across business models. We really have no competitor who is able to offer what we're able to offer in that EV space. So very, very strong in that regard. We have some really strong partnerships, which have been developed over the last 12 months with key industry players. And I call out specifically NRMA. I call out specifically RAC transit systems, and we are now recognized as the preferred partner for these large industry players for infrastructure design, install, test and commission. And the other thing I would call out there for the Addelec business is, we have got some expanded product portfolio with agreements with new suppliers and specifically around the EV charging space. And we have agreements now with Kempower and a company called eLumina, which we're able to do an EV charger with built-in battery energy storage. And it's been very, very successful for us in the last 12 months, and we'll continue to moving forward. Major projects, Perth Transit Authority, which is the Malaga Bus Depot. We have picked up the contract for that. All of the revenue, while we've got the order for that that's booked on the system. It's a significant project. All of the revenue will be recognized in 2025. In the NRMA, there was significant revenue stream recognized in the last 12 months, and that will be replicated year-on-year-on-year for the next decade as the country has to grow with the increased demand for EV charging and the requirements for the vehicles -- electric vehicles on the road to increase dramatically. eLumina, I called it out before that the charge we had built in battery energy storage. We've had a significant number of significant wins in the last 12 months attached to that product portfolio. And because of the unique design, we expect that to continue into the future. We were successful with the University of Wollongong securing an order for all of the EV chargers to go into that university around the carpark. And then the last one there, Cloud Carrier -- sorry, that University of Wollongong, 50% of the revenue has been recognized in 2024 and the other 50% would be recognized in 2025. And Cloud Carrier, which is a data center down in the Southern Highlands, we recognized a significant amount of revenue in the first -- in the last 12 months there around that being that's data center. They are already assessing -- expanding that into another data center, which we expect will happen in the next 12 months as well. Moving on to Slide #20, which is EX Engineering. From an update perspective, it's fair to say that they actually had an incredible result in the last 12 months, and that's come through an increase in the day-to-day opportunities, it's driven by a number of things, but certainly, plant upgrades and expansion as a result of the renewable energy introductions and upgrades. And certainly, we're looking to expand their capabilities. As I said earlier in the call, they are exclusively on the West Coast. And from a pricing perspective and from a logistics perspective, makes it hard for them to be successful on the East Coast. So we will look to expand that. And we have already made some investment in that space, opening up an assembly area on the East Coast already, and we expect that will have significant opportunities for us in the future. And the big one there is obviously leveraging off the relationships that we had within the IPD group in the mining and electrical contractor space. A couple of contracts, the major projects to call out there, a Global Energy Company Supply Contract. We have that ongoing with a large global energy provider, and that is a contract extension for us into the future. CBH, which is in the grain space, again, continued support with the recent contract extension for CBH, which is a significant amount of revenue year-on-year for us. There is a CBH Storage Upgrade, which is deliver expanding their storage capacity, which obviously means some more opportunities for hazardous area equipment to go into that expanded plant and significant revenue for us to be derived from that. And the Callide Power Station upgrade providing equipment sourcing and also local customized equipment as well is another project. All of those projects, a couple of them, the top 2, particularly with the supply -- the supply contracts will be ongoing. The other ones tend to be year-on-year, and we think there'll be many of those coming into the new year as well. The last one there is around the CMI business. We've certainly seen increased revenue opportunities. In the last financial year, we did see an implication from an export perspective around the Minto plugs, where Indonesia, the mine site that we were putting them into. In fact, what they did as they closed, there was no output from those mines, which obviously met the level of investment into those mines stopped. There was government regulations that were driving that. That has now been removed and the plant is operating as usual, and we expect to see upside that we didn't see in the last 12 months as a result of that opening back up, which is exciting and really will underpin some strong growth. We're seeing expansion of the Minto products to include an 11kV, 11,000 coupler, which is used enabling mine sites in their renewable aspiration. So we'll see that flow into the next year. Growing revenue streams created by new product introductions. Cable cleats is a product that, that CMI business will take, and it's a great fit for every time you sell a cable, you have to sell effectively a fixing device to hold that cable, which protects people and real estate. And that is a new product for the CMI business that will certainly drive revenue. The last one there -- or second last one is leveraging off a strong relationships with the IPD Group, as I called out with the previous slide with EX Engineering, certainly, with the electrical contractors, that's more prominent on the cable side than it is on the plug side, and we certainly have the opportunity to be able to bundle our portfolio to include all of the core IPD products as well as cable. And we're looking to expand into new international markets with the Minto product, where there is mining opportunities. We call out Indonesia and a couple of other geographies there around Mongolia and South Africa is one that we're currently supporting. But we're looking for increased markets there as well. Slide #22 is about voice of our customer. We did a survey of all of our customers. And from that, we derive a Net Promoter Score. We've seen a significant improvement of 2.7% in our Net Promoter Score from a customer's perspective, validating that what we've been doing for the last couple of years around our investment, our service model, our logistics, our customer service is really having a positive impact and great to get that feedback from our customers. What's even better is we asked 10 or 11 questions that come down to a more granular level, and we've seen an improvement across all of those areas from customer service, logistics sales representations in the last 12 months really is a fantastic result. And anything over 30% from a Net Promoter Score is seen as best in class. So we're very proud of that, and the customers are recognizing the value we can bring. If I talk about our diversified revenue, products represent 93% of our revenue services predominantly from the -- or traditionally from the Addelec business. If I call out down the bottom there, the end markets, data center is growing fast, certainly increased now to where it's 12% of our revenue and will continue to grow. But we're also seeing growth in areas like water and wastewater, and certainly, in mining, in infrastructure, and industrial based on the attachment of those acquisitions. We're still not materially connected to residential. Less than 1% of our revenue comes from residential and there's certainly some challenges there, but we're well protected from that. The upshot of this is that the diversified revenue model offers protection from any downturn and offers significant opportunity for us to grow even in difficult times. From a vendor relations perspective, acquisitions have reduced our concentration and reliance on any particular vendor. Our top 5 vendors now have reduced concentration by 13% of our total revenue. So it does give us protection although we have exclusive relationships with all of our suppliers, and they are long-tenured relationships over 20-plus years in a lot of cases, so well and truly well protected there. What's important to point out is when we represent those vendors, we have total control on all of our pricing in our geography. We're not dictated by those vendors around our pricing model, although we are well supported by them, particularly when we need that support on some of the major projects. If I move forward to Slide 25, this is around ESG. Many initiatives from a company perspective being introduced there. Before I move into those, we've grown our organization to where we're now, 664 employees for the organization. Our own internal Net Promoter Score of 35% has remained stable. Our engagement in our last survey was up significantly, showing that a lot of people are content and happy working in the business. And again, well and truly above that 30% benchmark. So a great result. 1.9 industry -- sorry, lost time injury frequency rate, as I said, over 400 days without a lost time injury. I won't go through each of those points specifically there around ESG. But if I call out some really big ones, repurposing of all of our timber packaging, we actually repurpose all of our pallets and our timber packaging that comes from a lot of our suppliers who were importing from overseas. And we provide them to a kitchen company who manufactures here locally. So a lot of the timber is repurposed to be used in kitchens. We've had an initiative that we introduced with ABB, that ABB have created a case study on a global level 4, where we're using reusable collapsible crates to provide us the deliveries from ABB. Once we receive them, we collapse them or down, send them back to ABB and they shift the next lot of goods in those same set of grades. So we're reducing the amount of cardboard packaging, paper, all the packing, and everything that goes with that. And as I see, ABB have used that as a global case study. We've got alliance with multiple charities. I call out Cancer Research and Salvation Army as 2 of the bigger ones. And in terms of quantifying that, we would have donated over $25,000 in the last 12 months by our company and our staff combined into those charities. We have an employee assistance program for all of our employees, where we offer consultative advice to our customers around any space, financial, alcohol, drugs, work-life balance to be able to support them and make sure their well-being is being well looked after. And many more opportunities, and I'll allow you to go through them one-on-one, but a strong focus for the group in all areas there. Moving on to our strategy and outlook and straight on to Slide 27. In terms of business growth, organically, we call out that we continue to look at -- aspire to grow at twice the market rate. We still only have circa 10% market share across our business, and we look to grow that aggressively. So we're looking organically to grow at twice the market rate. And in terms of inorganic growth, we continue to look for M&A opportunities, and it continues to be a focus of Mohamed's in that space. We have 2 really strong conversations going on opportunities at the moment. There's nothing that I would say that it is imminent. There's a lot of water to go under the bridge, but we continue to have a focus there around complementary businesses that have a cultural fit and strategic fit with our business. We've been able to secure one acquisition per year over the last 8 years. And I don't see anything that would mean that, that would have to move away from that. From an operational efficiency perspective and the second area there, we obviously want to leverage off the group shared services to minimize the cost of growth. And when I talk about the acquisitions using the shared services of the organization to be able to minimize that need for capital expenditure and operational expenditure with those growth. We want to investigate real estate savings and relocation where it makes sense. And when leases come up, we will look at that for operational savings. And we will leverage off the group's scale for better terms and cost savings with our vendors and to underpin from a bottom-line perspective, make sure we're getting -- we're squeezing as much lemon as we can out of the lemon juice out of the lemon. And then the last one there around sustainability. It is at the core of our offer. Effectively, we got to walk the talk. A lot of our offer fits into that space. We have to be investing responsibly, focusing on compliance to ensure a positive impact. We want to align our growth and our innovative initiatives with the long-term environment and social goals. And certainly, from a team perspective, I'm really -- what I'm most proud of is the culture we have with our team and the highly engaged team that live and breathe our company values and the culture drives a really, really positive vibe out there for our customers and leverage off that for the future as well. If we move on to Slide 28, which I'm sure you've all been looking forward to and waiting with bated breath, our outlook for the future, short, mid and long- term, the outlook of our markets remains buoyant. While we haven't included short there, I've taken -- given that if it's going to be mid to long-term, it's certainly going to be in the short-term as well. It's driven by the transition to renewable energy and increased demand from data centers and their energy requirements and the growing number of EV chargers, and a supportive legislative environment that I've spoken about previously. From an IPD perspective, from a group perspective, our experience senior management, our best-in-class customer service, our very diverse product range and strong balance sheet, and a strategic focus on M&A uniquely positions us for continued growth into the future. And the Board will certainly provide an update from quarter 1 trading performance at our AGM, which is scheduled for the 26th of November 2024, giving you some clarity around that performance in the first quarter. So that really covers everything on our presentation today. I'll now hand back to the facilitator if there are any questions from the floor.

[Operator Instructions] Your first question comes from Sam Edward Brandwood with Bell Potter.

Congratulations on another great result. Just got a few questions, if I can, please. Firstly, on the data centers, Michael. Am I reading this correctly? So, it looks like contribution from data centers is more than doubled year-on-year to about $35 million, if you kind of use the 12% on group revenue. Are we thinking -- is it the right way to think about FY '25, there's 25% growth? Or do you think there's a bull case there that could go even further than that?

So, yes, Sam. The answer to your question is, you're absolutely correct. It has grown and grown significantly to 12%, which circa represents upwards of $30 million there. And I expect to see significant growth. If I talk about the data center provider I spoke about earlier in the call, that in itself is forecasting large growth into the future, which will just fly through on the coattails. And that's only one provider in that space, but we are well positioned with multiple providers in the data center. So I think 25% year-on-year growth in that data center space is something that would be absolutely achievable for us as a business. And if we didn't get that sort of success, I'd be disappointed.

Great. And just thinking about the daily trade business. So the only thing that sort of set up to me was daily trade perhaps coming or just slowing at the top line, obviously made up for the earnings line. But what sort of initiatives do you have in place to sort of accelerate the top line of that business again, cognizant that you're also focusing on the project side of the business heavily at the moment as well?

Yes. Great question, Sam. And look, with any business growth, it's obviously never linear. It's not a straight line and there will be sharp peaks and then areas of a little bit of a plateau and then followed by increases again. In the last 12 months, it's fair to say because of the significant major projects that are out there and if we're guilty of anything over the last 12 months, it's probably that we may have lost focus on our core business because of these lucrative projects that are sitting out there on the site, and we needed to focus on them because they will be a strong part of our growth into the future. But if anything, I'd say we may have neglected our core business a little bit to our detriment over the last 12 months. And while you might say that commercial construction is somewhat challenging, we still only have 10% market share. So even if commercial construction was to reduce a little bit, we should be able to well and truly compensate for that by taking market share of our competitors. So you're right. But one thing I will say is the time and effort that we've put into preparing ourselves for those major projects over the last 12 months will hold us in really good stead for the future. We have a record order book going into the next -- into this financial year, and that's increased from sort of circa 2 months of our revenue stream as committed orders to now 2 months of our revenue stream as committed orders. So, we can be more confident of growth in the next 12 months than we've ever been before. The CMI business, I think from a revenue perspective, was somewhat diluted as a result of management focus being diverted to the acquisition a little bit. Obviously, I called out the export there. There's a little bit of a downturn from export. But with the opportunities to leverage off the IPD business and the growing demand for these megatrends. I'm very, very comfortable that in the next 12 months, and we'll see an improved result in that revenue space.

Yes. And that, I guess, leads on to my final question, Michael. Just on the CMI acquisition, you called out, I guess, EBITDA down year-on-year due to those supply issues and some relocation. How is the business, I guess, performing on a run rate basis now? Do you feel like you've got a fire for FY '25? And then sorry, off the back of that as well, how much do you think you kind of lost in FY '24 from relocation, I guess, one-off costs?

Yes. materially in terms of relocation costs, there was about, I think, about $160,000 pertaining to relocation case.

Circa 200,000, Sam.

And what do you feel like you lost, I guess, on the supply issues as well that seem to be resolved?

Yes, there's about $2 million at a top line perspective from export and about -- that's a high margin that business and having about a $1 million implication at the bottom line. But I can say to you, Sam, that the order book for CMI has never been as robust as it is now. And certainly, May and June were record months in terms of orders booking and July and August have been strong as well. So I have a lot of confidence that we'll turn that around in this coming 12 months based on the fact that we can go into there with a lot of confidence on that record order book.

Your next question comes from Philip Pepe with Shaw and Partners.

Congratulations on a good result. And our cash flow was pretty strong. Just on the current acquisitions you mentioned plans for FY '25 is to push into the other states. Have you started yet? And how is the traction going with the conversations about having with some potential customers for those expansions.

Sorry, you dropped out a little bit there. Were you talking about the expansion of EX into the Eastern states or mergers and acquisitions?

Starting with EX. How is that going with expanding into the Eastern states and how the conversations going with the potential customer base?

Yes. So the answer to that question is we've already got an adaptation center or assembly section set up in our Weatherall Park facility to be able to build those hazardous area assemblies now. So we're at a point where we can deliver. A lot of the customers make will actually be come in while they're traditionally working in the Perth base. A lot of the customers are national mining customers. So it's not necessarily new customers, which should drive revenue uptake faster rather than having to take it to a completely new group of customers. But it's fair to say, we've only opened up that facility in the last month. So we obviously haven't been out there beating the drum too hard because we didn't want to not be able to deliver with any opportunities that have come. And I expect to expand that over the next 12 months, the capacity to be able to build more for that Eastern seaboard. But there's significant mining opportunity up in the north of Queensland, up in the Hunter region in New South Wales. And we will certainly do everything we can, and I think we're in a strong position to capitalize on that. I don't want to quantify it because realistically, I don't want to make any commitments that I can't live up to now. But I think materially, it will be a good result in the next 12 months for that the EX Engineering business.

Excellent. And if I can sneak in a second one. I mean, as you mentioned earlier, quite a well-diversified business posts a couple of acquisitions. In terms of the 2 that you said you're looking at, what kind of segments might they be in? Are they adding to what you've got, are they further diversification?

So, they are further diversification. They're in products and technologies that we don't play in at the moment. But both of those are in the electrical space, and there's a lot of common customers. So the ability to be able to do exactly what I'm talking out with CMI with those if we can get them across the line means we've got common customers. We understand the business. We understand the mechanics. They're both attached to the megatrends we're attached to. So much in the same sort of phenomenon as the CMI business. They're in our space, but they're 100% complementary to our business, and there's no, what I would call, replication of any business that we're across the organizations if we were successful with one or both of those.

Your next question comes from Matthew Chen with Moelis.

Just wondering if you could give us an update on how you're thinking about price increases on your product portfolio over the coming year.

Yes. Great question, Matt. As I said it earlier, important to reinforce that we own the pricing into our geography. We have total control over that. The last couple of years have seen a phenomenon based on supply chain issues and freight complications and that sort of thing of out-of-the-line, if you want to call it, price increases based on history. And I think that is somewhat normalized at the moment. But I've been in this industry for a long time Matt and every year, we all tend to have price increases that are CPI or a little bit above, and we find ways of justifying them. In March this year, we had a price increase of circa 4%, and I expect that we'll do another one in February of next year. We haven't determined what the quantum of that will be. But what is important to know that when we have a price increase, it's at a list price level and about 50% of that flows to the bottom because we still have to be competitive in the marketplace. A lot of our business is still done on quotations and contracts. So I think one of the things we have done really well over the last 12 months is manage our pricing and mechanics around pricing, nothing will change there. We'll continue to do that well into the future. But I think pricing increases will somewhat normalize in the coming years, and we'll go back to 1 price rise each year and somewhere between 3% and 5% year-on-year.

That's really helpful. And I just wanted to clarify with the metal exports in Indonesia, well, do you have any visibility on like the timing of the return of those sales? Or have they already started to return? Can you just give us a bit of color there?

Yes, they've already started to return. They're obviously used in mining applications where they're constantly drilling and the mine is getting bigger, which is driving expansion or extension of the cables, which means you have to put plugs in there to facilitate that expansion. The revenue stream has already been turned back on. We're already seeing it. So there won't be any delay in this 12-month period or any decrease as a result of that shutdown. What's important to point out though, while the mine was shut down and there was no output, there is no backlog that will be -- that roll into the next year. We'll go back to the normal annualized numbers of sort of $2 million at a top line and $1 million at a bottom-line year-on-year. Sorry, if I could just make one comment on Matt there, too. In terms of pricing, we are well supported by our vendors when we have these major projects, and we get caught into a competitive situation. Every time we go back to our vendors and ask for support to be able to target those major projects, they're very accommodating. So while these major projects can sometimes come with a reduction in gross margin because of the competitive nature, we are very well supported by our vendors, which will give us the ability of being able to hold that well and truly into the future.

Thank you. There are no further questions at this time. I'll now hand back to Mr. Sainsbury for closing remarks.

So, I'd like to, in closing, just say thank you again for your time today. As a leadership team, we are extremely proud to be presenting a strong set of numbers that we've been able to put out there today. Earnings per share growth, EBIT growth, strong EBITDA, net profit across the line, all financial parameters, very strong and the earnings per share up 30% on the previous year is an incredible result as well as cash conversion at 88%. So we are really proud to be presenting these numbers. We thank all of you online or who are already investors in our organization for your ongoing support. And we look forward to potentially having conversations with any new investors that want to be part of IPD Group for the future. So thanks for your time. Have a lovely day, and I look forward to talking to you all soon.

That does conclude our conference for today. Thank you for participating. You may now disconnect.