APM Human Services International (APM) H2 2024 earnings summary

Executive summary

• FY2024 revenue grew 21% to AUD 2.3 billion ($2,297.7m), driven by acquisitions and organic growth, especially in North America and Australian health businesses.

• Underlying EBITDA declined 23% to AUD 280 million ($279.6m), and underlying NPAT/NPATA fell 47% to AUD 95 million ($95.1m), mainly due to lower employment services contributions, margin pressure, and higher interest expenses.

• Statutory NPATA was a loss of $166.6m, impacted by a significant impairment charge.

• Over 2 million people were supported globally by 15,000 staff across 11 countries, with new contract wins in Canada and the U.S.

• A proposed scheme of arrangement, supported by the board, may result in privatization via acquisition by Madison Dearborn Partners at $1.45 per share, a 75% premium.

Financial highlights

• Revenue increased 21% year-over-year to AUD 2.3 billion ($2,297.7m), with North America up 66%, Australia/NZ up 3%, and Rest of World down 9-12%.

• Underlying EBITDA dropped 23% to AUD 280 million ($279.6m), with margin declining to 12.2% from 19.2%.

• Underlying NPATA was $95.1m, down 47%; underlying EPS 10.4c.

• Non-cash impairment of AUD 269 million ($269.1m) recognized, excluded from underlying results.

• Underlying cash conversion for FY2024 was 81.8%, with operating cash flow of $228.6m.

Outlook and guidance

• Focus on mobilizing new contracts, especially the Functional Assessment Services contract in the UK, commencing October 2024.

• Continued investment in people, processes, NDIS reforms, and efficiency initiatives to optimize for the current environment.

• Emphasis on operational efficiency, quality, and pipeline development.

• Board recommends shareholders approve the proposed scheme of arrangement.