• Revenue slightly down 1.9% from PCP but higher than 2H FY24
• Gross margins increased to 18.5% due to higher margin work
• Normalised EBITDA margins increased to 9.4%

Duratec Ltd has reported its 1H FY25 results, with revenue of $287.3 million, slightly down 1.9% from the prior corresponding period but 9.2% higher than the second half of FY24. This result was driven by lower revenue in the Defence and Mining & Industrial sectors, offset by strong performance in the Energy and Other sectors. Gross margins increased to 18.5% from 16.2% in the prior corresponding period, primarily due to the mix of work undertaken in the higher margin sectors and Early Contractor Involvement works. Normalised EBITDA margins increased to 9.4% following the higher gross margins and increased profitability from the DDR Australia associate. The company's balance sheet continued to strengthen, with net assets increasing by 14.1% to $67.4 million. Operating cash flow conversion was strong at 84%. The company has also successfully negotiated an increase in its banking facilities by 69% to $294.1 million, providing headroom to support future growth. The company provided a positive outlook, forecasting FY25 revenue of $600 million to $640 million and EBITDA of $52 million to $56 million.

Forecast FY25 Revenue of $600 million to $640 million and EBITDA of $52 million to $56 million.

Very strong tender outlook demonstrates robust pipeline of opportunities and confidence in future growth prospects. Conversion of ECI planning phase projects at HMAS Stirling into delivery contracts, further ECI contract model take up, and strong tailwinds in Mining, Energy and Building Maintenance sectors expected to drive medium to long-term growth.