Ventia Services Group (VNT) H2 2024 earnings summary

Executive summary

• Achieved full-year revenue of $6.1 billion, up 7.6% year-over-year, with EBITDA up 7.3% to $499.3 million and stable group margin at 8.2%.

• NPATA grew 12.8% to $227.9 million, supported by strong business performance, lower amortization, and higher interest income, with a 3-year CAGR of 15.8%.

• Work in Hand increased 6.7% to $19.4 billion, the highest annual increase since listing, supporting future growth.

• Customer renewal rate increased to 92%, and total dividend for the year rose 12.8% to 19.98 cents per share, 80% franked.

• Announced an on-market share buyback of up to $100 million for 2025.

Financial highlights

• Cash conversion improved by 2.6 percentage points to 91.4%.

• Free cash flow before tax and dividends rose 5.8% to $272.1 million.

• Capital expenditure rose to $67.4 million (1.1% of revenue), driven by investments in plant and machinery.

• Net debt to EBITDA at 1.0x, at the bottom of the target range; interest cover ratio at 11.2x.

• S&P and Moody's credit ratings remain stable and unchanged.

Outlook and guidance

• FY25 NPATA growth guidance set at 7%-10%, excluding the one-off Toowoomba transaction.

• Market opportunity remains strong, with addressable market projected to grow from $83.4 billion in FY25 to over $100 billion by FY28.

• Guidance incorporates risks and opportunities, including legal costs related to ACCC proceedings.

• Continued strong cash generation expected, with >90% cash conversion.

• Targeting >$20 billion Work in Hand and 60-80% NPATA dividend payout.