The Environmental Group (EGL) H2 2025 earnings summary

Executive summary

• Revenue for FY25 reached $112 million, up 14% year-over-year, with EBITDA up 10% to $11.1 million and EBIT up 8% to $8.1 million.

• Recurring revenue increased to 53% of total, with the last quarter reaching 58% due to strategic focus and the Advanced Boilers acquisition.

• Strategic acquisitions, notably Advanced Boilers & Combustion for $5.5 million, expanded product offerings and recurring revenue base.

• Major milestones in PFAS waste treatment technology, including EPA approval, US patent, and new plant orders, expanded market reach.

• Second half EBITDA surged 86% over the first half, driven by strong performance in waste, water, and energy segments.

Financial highlights

• Revenue up 14% year-over-year to $112 million; EBITDA up 10% to $11.1 million; EBIT up 8% to $8.1 million.

• Second half EBITDA was $7.2 million, more than double the first half.

• Recurring revenue grew from 44% to 53% for FY25, and to 58% in the last quarter.

• Contract assets rose from $5.3 million to $11.2 million in the energy business, reflecting strong June activity.

• Excluding one-off items, underlying earnings exclude $808K in acquisition costs, $307K ERP costs, $163K performance rights, $97K restructuring, and $214K FX gains.

Outlook and guidance

• Normalised EBITDA expected to grow 15%-20% in FY26 compared to FY25.

• Strong pipeline in PFAS, waste, and energy segments, with recurring revenue targeted to reach 70%.

• Continued focus on organic growth, strategic acquisitions, and expanding recurring revenue streams.

• Guidance described as prudent, with a history of meeting or exceeding targets.

• Management plans to reinvest cashflow to support growth strategy and margin expansion.