COSOL (COS) investor relations material

Executive summary

• Revenue declined 14.1% year-over-year to $49.6m, ending a previously strong growth trajectory, with underlying EBITDA down 57% to $3.5m due to subdued demand in natural resources and the end of major contracts.

• Performance was impacted by contract terminations, underutilization of staff, and weak sales pipeline, prompting an operational reset with restructuring and cost reductions (~$1m annualized from H2).

• Leadership roles were expanded, with the CFO also taking on COO duties to drive operational improvements and integration.

• Strategic focus shifted to digital and data services, with SaaS ARR doubling to $3.1m and integration of Toustone AI/data business to pursue mass transportation contracts.

• No interim dividend declared; $2.13m paid as final dividend for FY25.

Financial highlights

• Asset Management Services revenue declined 26% to AUD 5.7m (or $15.9m), mainly due to reduced demand in the coal sector and contract changes.

• Consulting services revenue was hit by the termination of a Managed Services contract and the wind-down of a major project, with Australian Consulting revenue at $27.6m.

• Gross margin compressed to 28.8% from 31.5% year-over-year; underlying NPATA dropped 73.9% to $1.3m.

• Cash position stable at $6m, with strong cash conversion at 294% due to debtor recovery and working capital management.

• Net debt reduced by $5.9m to $20.7m, with $14.3m available borrowing capacity.

Outlook and guidance

• Revenue and earnings are expected to grow in the second half, supported by improved utilization, new contract wins, and a strengthening sales pipeline, especially in transportation and infrastructure.

• Managed Services is projected to achieve 10% annualized growth in 2027, with margins approaching 40%.

• Continued investment in digital and data services, especially in public infrastructure and Americas markets.

• Cash conversion anticipated to normalize to ~90% for the full year.

• Further guidance will be provided in early Q4 as momentum builds.