Half Yearly Report and Accounts

• Revenue down 3.3% to $104.8M, but net profit after tax up 61.6% to $2.4M
• Improved gross profit margins and disciplined cost management drive financial outcomes
• Gemco Rail delivers strong growth, while Drivetrain and Convair see shifts in customer demand

Engenco Limited reported a net profit after tax of $2,389,000 for the half-year ended 31 December 2024, up 61.6% from $1,478,000 in the prior corresponding period. The improved result reflects higher gross profit margins and disciplined cost management across the group. Earnings before interest and tax (EBIT) were $4,569,000, up from $3,175,000 in the prior period. Revenue was down 3.3% to $104,766,000, with Gemco Rail delivering strong growth underpinned by new business and increased wheel and maintenance activity. However, Drivetrain experienced a shift in customer demand, while continued portfolio adjustments in Convair and Momentum also impacted group revenue. Net profit before tax for the period was $3,453,000, up from $1,998,000 in the prior period, reflecting the benefit of higher revenue from Gemco Rail and improved gross profit margins. Net operating cash flow was $9,931,000, higher than the prior period's $7,370,000, which included proceeds from government grants.The group's reportable segments saw mixed results, with Gemco Rail's net profit before tax up 58.8% to $6,617,000, while Drivetrain, Convair, and Workforce Solutions experienced declines. Hedemora Turbo & Diesel also saw a reduction in net profit due to deferred turbocharger shipments and increased costs.The group's balance sheet and cash flow position remained strong, with net cash of $5,167,000 at 31 December 2024. The group continues to prioritize employee health, safety, and wellbeing, with improvements in safety metrics.Looking ahead, the group expects operating performance in the second half of FY25 to be materially stronger than the first half, delivering a materially higher result for the full year compared to FY24. The group's efforts to optimize the business portfolio and manage costs are expected to continue driving improved financial outcomes.

On the basis that market conditions do not materially change, the group anticipates operating performance in the second half of FY25 will be materially stronger than the first half, delivering a materially higher result for the full year compared to FY24.

The group's efforts to optimize the business portfolio, matched with cost management, are improving gross profit margins. The group is experiencing more consistent demand across key industries including transport, mining, defence, and energy. Improved performance is expected for Drivetrain, Convair, and Hedemora, while the Gemco business is well-positioned to accelerate growth. Workforce Solutions continues to reposition its portfolio to align with industry demand.