Waterco (WAT) H1 2025 earnings summary

Executive summary

• Sales revenue rose 14% year-over-year to $132.4m for HY25, driven by organic growth, diversified streams, and the Davey acquisition.

• Net profit after tax declined 15% to $5.9m, impacted by margin compression, cost pressures, and foreign exchange losses.

• Underlying EBITDA declined 4% to $16.6m; EBIT down 17% to $9.8m; underlying NPAT down 11% to $6.6m.

• Interim dividend maintained at 7 cents per share, fully franked and payable 2 May 2025.

• Strong regional sales growth across ANZ, North America & Europe, and Asia, with ANZ benefiting from the Davey acquisition.

Financial highlights

• Operating revenue increased 13% to $134.7m compared to HY24.

• EBITDA: $15.6m (down 6%); EBIT: $9.8m (down 17%); NPAT: $5.9m (down 15%).

• Underlying EBIT margin fell to 8.1% from 10.7% year-over-year.

• Net cash from operating activities dropped to $1.3m from $15.5m in HY24, mainly due to higher working capital.

• Working capital increased to $113.0m, with inventory at $102.2m and investment in raw materials.

Outlook and guidance

• Stronger second-half performance expected, with improved margins and profitability.

• Plans to expand manufacturing capacity in Malaysia to support U.S. and European growth.

• Additional synergies and operational efficiencies anticipated from Davey integration and facility consolidation.

• Focus on product innovation, expanded distribution, and strategic M&A to accelerate growth.

• Board anticipates currency stability but no AUD appreciation for the rest of FY25.