SRG Global Limited (SRG) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the SRG Global Half Year Results Investor Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. David Macgeorge, Managing Director. Please go ahead.

Thanks, Melanie. And I'd like to welcome everyone to the call today for our first half FY '24 results. Before I kick off, I really would like to acknowledge our people. There will be many of them on this call and I really want to thank them for all their work and efforts. You all continue to step up. You really live and breathe what we stand for as a business and our culture of living for the challenge, being smart together, never giving up and having each other's backs. And these results are really a testament to all the hard work and dedication that you continue to deliver. We move to Slide 2. I really just want to start with a bit about us, particularly for those that are newer to the story. And who are we? We're a diversified industrial services company. I think the key word there is diversity. Diversity in what we do, sectors we play in, geographies in which we play in, diverse set of customers. That really is one of our key strengths. And what we do, we bring an engineering mindset to deliver critical services to major industries. So when I break that down, what do I mean by engineering mindset? It's about being smart, technical, innovative, specialist and deliver what are critical services to our clients. It's not around doing the laundry, the catering or watering the whole roads. It's about delivering critical services for our clients which makes us very sticky and makes us a critical partner to them. And we have the ability to do that across the entire asset lifecycle of engineer, construct and sustain which gives us a very broad platform on which to play. And what we want to be, our vision, is the most sought after in what we do. Some might say #1, market leader. For us, when our clients have a challenge, a problem, an opportunity, the first people I want them to think of when they pick up the phone is SRG Global in making the complex simple for them. We move to Slide 3 in the profile of the company. We are a very, very different business today. We now have more than 3,500 people, which continues to increase across more than 20 industries on more than 100 sites in 5 countries. You can see now, looking at sort of pro forma revenues of circa $1 billion and a market cap of roughly $375 million. So a very, very different business to where we've been historically. Now we report on 3 operating segments, Asset Maintenance, Mining Services and Engineering & construction. I'll touch on each of those. And you can see from an ownership structure perspective, Management and Board, they have circa 11% of the company. That one is quite deep, when the business which I think is really important for shareholders to understand that very much aligned to shareholders in terms of the ownership of the business. As we move to Slide 4, which is really a summary of our first half and really what I think you're seeing here is further evidence of us continuing to deliver. It's a record financial result, EBITDA are up 33% to $45.1 million, EBIT up 36% to $28.4 million, which is an absolutely excellent result for the company. Probably most pleasing for me is just we're continuing to improve the robust financial platform that we have. Excellent cash conversion, EBITDA to cash conversion of 133%. You'll sort of recall in the second half of last year, we won a lot of work in the last 3 or 4 months, and I always said that that would flow through in the first half of this year, and I think you've very much seen the clear evidence of that. We're now back to a net cash position, net cash of $6.4 million from net debt of $17 million. It's really, we want to be a net cash business and I'm really pleased to be back in a net cash position after taking on some debt for the Asset Care acquisition. I look really pleased from a cash perspective. It continues a very long track record of cash generation in the business. It's very cultural with our business and you can clearly see the evidence of that. One of the great things that we do as a company is we really bounce that growth and yield aspect of our stocking. So we've got an interim fully franked dividend of $0.02 per share. I think we've done a great job over a long period of time, really funding the growth of the business, but also providing good dividends to shareholders on the way through. And you're seeing further evidence of that today. Also pleasingly, you're seeing continued evidence of us winning and executing. We have work in hand of nearly $2 billion, which is up 27% on this time last year. An opportunity pipeline of $6.5 billion which gives us a terrific platform for the future. I've been asked a lot of questions over the last few years in terms of we've grown the business and won a lot of work. Are we buying work? And what you're really seeing here is clear evidence of us winning really good work with quality clients, but also executing really well. And the margin performance is a clear testament to that. We're not stopping here. We're upgrading our FY '24 EBITDA guidance to $95 million to $100 million, which really shows the confidence that we have in the future of the business. And look, our focus is on continuing to execute our long-term strategy. We've always pride ourselves that we run this business for the long-term. We'll keep executing that strategy and we see a really strong growth profile for the business over the next 3 years to 5 years. So I think as a summary, an excellent first half from the business. As we break that down a little bit further as we move to Slide 5 from the financial performance perspective, and I think no matter what metric you look at on this page, it's an excellent set of results. It's an absolute above market performance. We keep converting the pipeline with blue chip clients. We've transitioned to net cash, which I think is a real highlight for the business. And most importantly, the business fundamentals really provide that platform for ongoing sustainable growth. But what I really think the key story, the key message is here, it's not about the numbers, it's about the quality of the numbers and the quality of the business. The improvement in the quality of this business in the last 5 years is massive. It's been an enormous transformation. It's really off the back of us executing strategy. I always like to link numbers back to strategy. If we move to Slide 6, you can see here that we've had a very, very clear strategy for a long period of time. And you're seeing further evidence today of us executing against that strategy, and we're doing everything that we said we would and in some ways in my mind we continue to be ahead of schedule in that regard. I almost feel bored, boring at times in some ways that I'm reeling off the same strategy, but I think that's the real strength for us. We've been very focused. We've been very disciplined. We haven't deviated. And we've really gone about delivering what we said we would deliver. Very much in the growth phase of that strategy step change growth in recurring Asset Maintenance Services, you're seeing clear evidence of that. Innovation and selective growth in Mining Services, you're seeing clear evidence of that. Targeted growth in Civil Infrastructure Construction and Remediation, you're seeing clear evidence of that. Specialist services and products in building with key repeat clients, you're seeing clear evidence of that. And I think the keystone of the growth phase of the strategy was really transforming the business, very much a project-based win and do business, to a high level of annuity recurring earnings. And you're now seeing sort of circa 2/3 of our earnings sort of annuity recurring in nature in 1/3 project base. Why that's important, it gives us a very stable, predictable platform that which we rely on going into each year and then be very targeted on the engineering construction side of the business. We never feel the need to keep feeding the beast and we can be very disciplined, focused and targeted on how we'll grow the business moving forward. The growth phase will ultimately morph into the leadership phase over time, and I'll touch on the leadership phase of the strategy a bit more in the Outlook section of the presentation. And really, this execution of strategy as we move to Slide 7 is really delivering a key long-term track record of delivery. It's evidence and this is not about 1 half good set of results. It's not 1 year's good set of results. You're seeing a long-term track record of delivering and doing everything that we said we would do. Yes, it's been a huge transformation. Clear evidence of executing the strategy, really transitioned the business to that annuity recurring earnings, track record of winning and executing, track record of cash generation, funding growth and dividends. We're upgrading guidance. And I think if you absorb the numbers on Slide 7, you can really see the transformation that this business has been through. And every single metric on that page has undergone a significant transformation in the last 4 years. Again, it's all about evidence. It's all around the quality of the business that we have today. And what that's delivering as we move to Slide 8 is this strategic transformation is delivering sustainable growth for the future moving forward. We've got very much now a diversified industrial services business with that high level of annuity recurring earnings which gives us sort of that predictable, stable nature on which to grow. We play across a broad range of sectors and geographies and I always say that gives us a natural hedge, that we're not reliant on any one sector, one client, one geography. We have a very broad platform on which to apply our skills. But it's also about the quality of the earnings that we have today. We have a very robust commercial framework with blue chip clients and all the work that we're winning is primarily the clients that we already have and it's adding additional services to them. It's a terrific platform for the future. We're not stopping here. You can see we're increasing guidance again as we move into the back end of FY '24. As we move to Slide 9, it is underpinned by a really strong foundation. It's not about the best widget or the smartest strategy that drives performance, it's culture. And that's what I'm talking about here in terms of what we stand for as a business. Live for the challenge, smart together, never give up and have each other's backs. These are not words that sit on a frame, on a wall. These are words that we live and breathe every day and that's what's driving this performance. It's our people and our culture. I used to get at times sort of worried that as a public company everyone gets to see your strategy and know what you're doing but it's not about knowing the strategies, it's having the right culture and the discipline of actually doing and executing and you're really seeing the evidence today and the foundation that we have. Now just, I guess some live examples of that foundation as we look at the environmental, social and governance in action as we move to Slide 10. For SRG it's really about keeping it real and making a difference. We've got some examples there from an environmental perspective, we've implemented a Sustain Life Software Platform to track emissions and I think most importantly that allows us to really audit our performance on a consistent basis as we move forward and improve. There are a number of sustainability initiatives such as green concrete, local tree planting initiatives for every cubic meter of concrete, solar powered site facilities. And also working with our clients and their sites around smarter designs that really drive the environmental sustainability elements of their business. From a social perspective, our Bugarrba Aboriginal joint venture is really well established now, and I'll touch on that a little bit more later on in the presentation. We're on our third reconciliation action plan, and we have a number of social partnerships with support, with causes that are aligned to us, such as Clontarf, Mates, Shooting Stars and Telethon. And what we have is a really good governance and risk management framework on which to sort of manage and govern the business. I'm particularly pleased with some of the work we're doing in the psychosocial space, and really equipping our frontline leaders on what is not only an enormous issue in business and industry but also in life. And we've really worked hard on developing our own in-house program around psychosocial behaviors and management to really help improve and drive the business. I never really like to celebrate safety. I always call it the glass ball in business that you can't afford to drop. We continue to make significant improvement both on lead and lag indicators, our TRIF is sort of circa 3, which is a big step forward for us as a business, but every day is a new day and we won't be satisfied until that's 0. So I think overarching, terrific set of results, really good execution of strategy, really strong set of numbers, but a really strong framework on which to take the business moving forward. So I'm now going to switch gears and we'll go into some of the more financial aspects, and I'll pass on to our CFO, Roger Lee, to walk us through those. Thanks, Roger.

Thanks, David. So onto Slide 12, as you can see here with a segmental breakup of our performance, the key takeaways here is on the left-hand side, you can see we're up on all metrics of revenue, EBITDA and EBITA. And to David's point, that's what he said before, you can see our earnings now significantly weighted towards our first 2 segments of Asset Maintenance and Mining Services. And from a margin perspective, continued margin profile of circa 11% EBITDA margins in Asset Maintenance. In Mining Services, circa 20% EBITDA performance, which is very consistent with our historical run rates. In Engineering & Constructions, margins of 7.2%, which is, again, in line with historical results. And our corporate number of circa 2.2%, again, in line with historical, and we feel pretty much a very modest spend for our corporate profile. So a very strong set of results and very much evidence of our weighting more towards our annuity and recurring earnings profile. Onto Slide 13, cash generation. Key takeaway here is I guess 133% cash conversion rate. And that's with a strong operating cash result of $59.7 million against our EBITDA of $45.1 million. In the half that we invested significantly, invested in CapEx of $39 million and we paid dividends and continued to grow the business and invest in working capital. I think as David pointed out earlier, a very, very pleasing result and again, evidence of the cash generating power of the business that we have today. And Slide 14, again, a very robust financial position. We continue to build on this position. Available liquidity of $184 million, cash in hand, undrawn working cap facilities and equipment finance facilities. So plenty of opportunity for us to grow and plenty of support from our supporters banking-wise. Net cash of $6.4 million from a net debt position of $17 million. Again, a very pleasing result and a lot of undrawn facility there from a bonding and bank guarantee perspective. So I guess the key takeaway from this slide is a strong platform for us to grow from a financial perspective.

Thanks, Roger. Certainly, a lot of hard work there from the team. To move now to the operating segments and just move to Slide 16 which is our geographic footprint. I think what you can see here is just the terrific platform and footprint that we really have to grow the business into the future. And it's not only that, it's just the breadth of services we provide and the depth of services at each of the locations that we are today. We have very much a cross-selling culture in our business and that really is I guess the opportunity for us moving forward. From a number perspective about 55% of our work is West Coast based, about 35% East and about 10% offshore which the lion's share of that is in New Zealand. But it's an enormous footprint for us and we think we're just getting started on how we can really leverage that footprint and add different diverse services to each of those locations. As we break down the 3 operating segments, firstly starting with Asset Maintenance, which is our multidisciplinary specialist maintenance business, our access solutions business and our asset monitoring, inspection and testing business. Now there's a couple of key takeaways from Slide 17. And it's really just the quality of the clients that we have and the diversity of the sectors on which we play. As I said earlier, we have a very broad platform on which to play across a broad range of sectors and just the quality of the clients that we have are absolute blue chip. We move to Slide 18 which is the first half in review. It's been a terrific first half in Asset Maintenance. A number of long-term contracts secured in a diverse range of sectors. It really embedded that geographic expansion and now truly in Australia, New Zealand Asset Maintenance business across all geographic sectors. The integration of Asset Care has gone exceptionally well. The whole thesis of buying Asset Care which is the monitoring, testing, inspection business. It was really to give us that front end monitoring, inspection, testing capability to then have the ability, the back-end maintenance ability to execute the work and provide that complete offering to market. We're basically at the 12-month anniversary of that absolutely on business case. I've been delighted at the cultural integration. Greg Fletcher and the team have really sort of joined the business well. There's a lot of sort of cross collaboration and cross selling initiatives underway. And we're delighted what this business brings to us from an innovation, a technology perspective. And we see a really bright future on how we can grow that business, but also how it strengthens other elements of our business. And really continues a really good track record of us acquiring well and integrating those acquisitions well. As I mentioned our Bugarrba Aboriginal joint venture is well established with contracts now with FMG and BHP. And look, I think there's a couple of key takeaways from the Asset Maintenance business as a whole. It's really just the tenure that we have with a lot of blue chip clients. And just the level of capability innovation that we provide and that complete end-to-end offering where we basically self-perform everything that we do. It's quite unique. We move to Slide 19, which is our Mining Services business. Our core service is our production drill and blast business and our geotechnical services business. Again, the key takeaway from mining services is the quality of the clients, and it's the quality of the commodities and it's all production based. And we play almost exclusively in gold and iron ore. Everything's production based. So we're really quite insulated from commodity price movements which are largely irrelevant to our business. And just the quality of clients we have are very much at the lower end of the cost curve. Again, as we move to Slide 20, terrific first half from our Mining Services business which continues a really long track record of delivery over a long period of time. We won multiple contracts in the first half. A particular highlight was Genesis Mining, which is a new client for us, well-known people within that business, the SRG Global family. We really see a very, very bright partnership with them moving forward. We continue to develop and enhance our Orbix data intelligence software. This is an in-house software that we've developed. It's all around good data analytics and driving good decision-making and performance. This software is integrated with our clients. It provides very much predictive intelligence, and it really drives that sort of data and insight and makes us very integrated with our clients. We expect the Mining Services business to continue to grow. We have a good pipeline of opportunities, but look, we're not trying to be all things to all people, it's very much around quality of client, quality of commodity. And to be honest, in the near future, it's really about growing primarily with existing clients as they expand their operations. The final operating segment is Engineering & Construction, which is our civil and infrastructure business in the sort of dam, bridges, tanks, wind farms and mine site infrastructure space. Our specialist building business which is our curtain wall facade construction business and our engineered products business. Again, probably some of the key takeaways, you can see the quality of the clients. It's very much government clients in the transport, water and defense space and long-term key partners. I think that's the key here is we're very focused, we're very targeted and really just following and growing with our key clients. If we look at the first half on Slide 22, it's been a terrific first half from Engineering & Construction and I'm quite bullish on where this business and segment will go over the next 3 years to 5 years. And we've won our first major R5/B4 project at Jervis Bay which is a key milestone for us. We now have the highest national road and bridge accreditation. This was a very, very important project for us. And I think the key message here is with the highest national road and bridge accreditation, it gives us the ability to do things in our own right where we would ordinarily have to joint venture 50/50. And this allows us to get the whole of the pie with the skill set that we have within the group, and that was a very, very key milestone for our business. As specialist facades business, we are an absolute market leader across Australia and New Zealand, and really just following 3 or 4 key clients. And to be honest, almost agnostic as to the type of structure whether it's in health, education, hospitality, commercial, residential, we largely don't care. It's really following our key clients as they develop their pipeline and we're already working on things as far out as FY '28 and that early contractor engagement. Really, really strong business. We've expanded across the [ ditch ] to New Zealand which really enhances our footprint over there and it's having a really, really strong period. We continue to expand our engineered products business. This is one that I ultimately see being the fourth operating segment of the group. That might take 5 years to 7 years. These are infrastructure products. And why I like engineered products, it's the same clients, it's the same sectors, it's the same geographies. You make it, you sell it, you get paid. Very low risk profile. And it's a market that we know well. These are specified products by engineers. And we have engineers selling to engineers. And we certainly believe, over the long-term we can really make a real success of this business. It is a long-time horizon. We look 5 years to 7 years, but that's the way that we think about around that business and we'll be very measured and focused and disciplined on how we continue to invest and grow that element of the business. And underpinning Engineering & Construction is just a really robust commercial framework. Nearly all the work we do is under early contractor engagement. The key here is just really well-established relationships where we're valued, we are the most sought after, and we're very targeted. And the things that we do, we're absolutely world class in. To sort of switch gears again in terms of the outlook moving forward, and I'll move over a couple of slides to Slide 24. It's really around continuing to execute what has been a very clear strategy for a long period of time. We very much morph the growth phase into the leadership phase over the next little period. And what will that look like? Certainly, zero harm at an ESG industry leader recognized employer of choice where people want to work for SRG Global. Products will ultimately become the fourth operating segment of the group. There will continue to be selective strategic acquisitions that complement either our capability or our footprint. And you've seen a very, very clear track record of us on the M&A front, buying well and integrating exceptionally well. Consistent above market returns for shareholders. And you've seen very clear evidence of that over the last 4 years. And often with the profile of the business, we'll move more towards about 80% annuity recurring and 20% project based. We really do see good organic growth across all 3 operating segments, but probably anything in more the inorganic M&A space will be more in that sort of recurring revenue style businesses. We have a really strong platform to continue to grow as we move to Slide 25. Work in hand of nearly $2 billion. It's just the quality of the work. We have the consistency and the sustainability of that work. We have a very large pipeline. For us, it's being very targeted on what -- who, on clients we'll work with, commercial framework, so we're not lacking for opportunity. We are very targeted. For us, I think the biggest opportunity is just leveraging the footprint we have and continuing to cross-sell different aspects of our business to clients that we know, know well and have a well-established commercial relationship. And that's really driving positive momentum and a positive outlook as we move to Slide 26. From an operating segment perspective, Asset Maintenance, it's all about continuing to deliver step-change growth in diverse sectors with blue-chip clients. Mining Services are all about operating in high-demand, high-quality growth commodities. You've seen really clear evidence of that today. Engineering & Construction, really positively linked to what is significant infrastructure investment across a number of sectors moving into the future. Engineered Products is gaining momentum both domestically and internationally. And Asset Care, it's really that transformative acquisition that adds that sort of front-end asset monitor, inspection and testing services. And that's driving positive momentum for the group as a whole. With upgraded guidance to $95 million to $100 million, the strength and diversity of the business really gives us that protection against labor and cost pressures. You've really seen that in the margin performance. As Roger's talked, a really robust balance sheet back in a net cash position with the ability to fund the future growth of the business. In earnings profile of circa 2/3 annuity in '24 and beyond. And the strategic transformation to diversified industrial services business will continue to deliver results as it has done. And I think ultimately for us as a company, we have multiple, multiple organic levers to grow the business into the future. Which is really the investment proposition of SRG Global, as we move to Slide 27. We have end-to-end asset lifecycle capability where we basically self-perform everything that we do. We play across diverse market sectors and geographies. It's that hedge that I talk about in terms of not being invited to any sector, geography, client, but having a very broad set of services and platform on which to apply our skills. We have a highly scalable business model with management aboard with the experience, the robust systems and structure to continue to scale and be a bigger business than we are today. A high level of annuity earnings profile which makes us very predictable and lowers the risk profile of the business. A very capital light investment profile with sort of maintenance CapEx circa 2% of revenue, but also being a really good high yield dividend stock and something, I think we've done particularly well over a long period of time, and really balancing that growth and dividend elements of the business. From my perspective, the business has never been in a stronger position than might now nearly 10 years within the business. And I'd really like to acknowledge all our shareholders for their ongoing support. We have a very exciting future in front of us. So I really want to again shout out and acknowledge [Audio Gap].

Ladies and gentlemen, this is the conference operator, we have temporarily lost connection with the speaker line. Please hold and the conference will resume shortly.

So we're back online now, I believe.

Please go ahead.

I'm going to back up. Yes. Okay. Sorry about that. I'm not sure what happened technically.

I think we're back online, Roger, so you might want to continue with the questions.

Yes. All right. So let me just get to that section again. Question here on the revenue perspective and growth rates. How do we see that each operating division growing for the remainder of FY '24 and then, I guess, beyond into FY '25?

Look, I think I never get too hung up on revenue. I must say, it's all around profitable growth. And we would expect all our 3 operating segments to continue to grow, and the revenue profile would, I think, highlight that accordingly.

Highlight that as well, yes. Yes, question around here on the very good operating performance. Expenses, finance expenses has increased, can you provide some comment around that? So this was around, clearly, when we bought Asset Care, we actually took on the term facility for Asset Care. So there's a repayment schedule and there's obviously finance expenses attached to that. So that's a 5-year term, and we'll expect that to continue to be paid down in accordance to the plan. So that's kind of the reason why interest expenses gone up, as well as we've continued to invest in motor vehicle purchases as well. And that's got an interest component attached to that as well, just to fund the growing business that we have. Question around uses of cash going forward. Do you think that SRG has seen its last acquisition? Do we think we use cash going forward as opposed to equity funding? What's our view and mix, I guess, on that going forward?

Well, I think ultimately it would depend on anything we look at it and the size of it, and like any acquisition we've made, we always make an assessment from a cash debt funding perspective and also an equity funding perspective. So there's no -- you can't provide a definitive answer. There's not anything we're looking at imminently, but clearly, we're in a very strong cash position, a very strong balance sheet, and we would look at all elements of funding and what makes sense for us. But probably one of the key elements for us is any deal we have done historically and would look to do in the future, we would want to be accretive.

Yes, agree with that. Question around exposure to recent curtailments AGL, Alcoa. What's the impact of that to the group?

Yes. Look, I think ultimately for us, one of the key strings of our business is very diverse. We're not wedded to any client, we're not wedded to any sector, not wedded to any geography. And look, I'm not going to comment commercially on any individual client. Alcoa is a good customer of ours, and they've made some recent announcements, and I think it potentially, in some ways, may present some opportunity for SRG Global. So I think you've clearly seen from our guidance, we've increased guidance that sort of shows you what we think about FY '24, and we continue to expect to continue to grow on FY '25. So I really think that shows the strength and diversity of the business as a whole. I mean, life's not perfect, business is not perfect. Different things will happen, but yes, just the strength and diversity of our business really provides us a very natural hedge as different things happen both positively and negatively.

Yes, I agree. Yes, question here around a geographic profile I guess about the U.S. business, and are we still operating there? This Slide 16 obviously shows U.S., South Africa and the UK. Can you clarify our approach in those markets?

Yes. So I think we have the footprint offshore. South Africa is sort of dam anchoring the UK, it's engineered products. In the U.S. we have a dam joint venture, it's not active at the moment. We still have the joint venture in place with our local partner. And I always said that's very much a medium-term play for us. Certainly, through Covid we put that on ice. We see the opportunities probably closer to home and it's more probably keeping a medium-term play and keeping a peg in the ground. And if the right opportunities start presenting themselves and they make sense for us, well then, the opportunity is there. But we're certainly not active and not actively pushing in that market at this point in time.

Okay. Now a couple of questions on Asset Care. So I'll try to group them together. So Asset Care, how's it going? How's the business tracking? Is it tracking the plan? The first half contribution, the full year contribution and going forward I guess, David, comments on Asset Care, please.

Yes, very much delivering to the business case. Really excited about the opportunities as we move into the future. And I think our business case on an annualized basis first half was about $15.4 million EBITDA and I can't remember down to last decimal place here. Roger, there's a lot of numbers in my head, but I think, yes, certainly the first half was very much in line with business case from a half year perspective.

Correct. Yes. Question here, just sensible approach for the same clients, same industries across business segments, obviously track record of deep relationships. Are there any new industries that you're looking to expand into?

Look, I think we play across a broad range of industries already and only for us. Our defense is an area that we certainly have a footprint in today, which we've sort of started to establish in the last 12 months to 18 months. And I think there's plenty of opportunity to grow there, which is probably a newer market for us over the last couple of years. And certainly, new energy, we do quite a bit in the renewable space from a maintenance perspective. We continue to look for opportunities over time. But we do play across a broad range of sectors already. So I wouldn't kind of sit here and say there's -- here's some new industry that doesn't exist today that we're not already playing in some capacity with the diverse business that we have.

Yes, terrific. Question around corporate costs. Do we expect a similar sort of amount and run rate for the second half? And the answer is yes to that question. Another one around, will we consider the AGM going forward moving to a hybrid model, in-person?

I'll take that on notice. I mean, I'll be focused right now scanning through the first half and delivering the [ year ], but yes, we'll certainly have a look at that.

Are you looking at any further acquisitions? And in what sector?

I think at any point in time, we're always looking for opportunities that add value to shells. There's certainly nothing imminent from an M&A perspective. What are the things that we like, certainly, continuing to enhance Asset Maintenance, Asset Care, even have the right small things in the engineered products front. We'll certainly look at it, or if there's certain sectors that we play in today that want to sort of increase our presence, we might look at that as well. But there's nothing imminent, and like we've done the last 10 years, we'll continue to explore opportunities where they make sense. But most importantly, a key part of our focus is really driving the organic growth in the business moving into the future.

Yes. Terrific. Question here, asset services. Can you talk about the level of organic revenue growth in the period? Comment around that. What do the forward opportunities look like? And what's driven it given the current level of services? And can you provide some examples of Asset Care and Maintenance synergies?

Yes, I think all the 3 operating segments have continued to grow. There's probably quite a few-ish questions in one there. I think that you can really see from an Asset Maintenance perspective, ex-Asset Care, that really the expansion on the East Coast of Australia is continuing to gather momentum. And that's been really strong. For us, from an Asset Care perspective and maintenance working together, there's been a number of examples already, Northern Star, FMG, the West Gate Bridge, where we've been providing a term contract for both maintenance and asset care services. We've started to expand our footprint in New Zealand for asset care as well, which is a new market for Asset Care. And also, probably it's perhaps traditionally been a business more focused on perhaps mining and oil and gas and energy but probably some of our infrastructure work particularly in sort of transport, and it really opens up an opportunity. West Gate Bridge was a pretty good example of that, but we're early days. It's a marathon, not a not a sprint. And the focus was really on integrating the business well culturally delivering a really solid set of numbers in the first year. And really getting out and engaging with clients about how we'll grow the business, and I certainly think it -- yes, we will continue to see that business grow. And also, I think it enhances other aspects of that business as well.

Yes, and I think let's emphasize the fact that we are seeing some terrific opportunity in the transport infrastructure sector, aren't we, with the Asset Care capability that we have, which is obviously a basis for us buying the business. Another question on margins going forward. I think we kind of covered this already.

Going margins are pretty consistent with [indiscernible], the question looks like margins were down. I think it depends what metric you look at. EBITDA was down [ 0.2% of 1% ]. The same EBIT was up 0.1% or 0.2%, and if we're getting to the last 0.2% of 1%, I think we're delivering a really good, strong margin. It's pretty well above industry, some industry peers in the space. It's very consistent with where we'd expect to be. We have a stated aim over time to ultimately get to 10%. I'm not sort of giving any guarantees of when that will happen on a consistent basis. But that's certainly the stated aim of the business. I think, as we leverage our size and continue to add scale to the business, we can really leverage the structure further as well where we are. It's very much a scalable business model we have. We have invested the systems and the structure to be a bigger business, and that's something that I think we've done well over a long period of time where we've really put the structure and the cost base in place prior to delivering the growth. And what that means that when we're winning, we're executing well. And that can be challenging at times where markets are looking for every 6 months some form of improvement. But yes, we very much think about this business in the long-term, and we'll continue to invest on where we want to be in the long-term for the business.

All right. Terrific. Well, I think that's the end of the Q&A session. So I will hand the session back to Melanie.

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