• Verbrec produces third consecutive profitable period since new management team in 2023
• Gross margins at another multi-year high
• Prudent use of cash reduces debt, cash remains stable
• Increased work in hand suggests stronger revenues and profits in second half

Verbrec Limited (ASX: VBC) has announced its half year financial results for the period ended 31 December 2024. The company continued its trend of producing higher gross margins, establishing another multi-year high gross margin of 37.0% in H1 FY2025 (34.9% in H1 FY2024). Verbrec also posted its third consecutive profitable period since the appointment of the new CEO and management team in mid-2023. EBITDA was $3.1 million, representing a 7.2% EBITDA margin. The company prudently reduced its loan debt to $6.1 million while maintaining a stable cash position of $4.5 million. Client feedback suggests that inflationary pressures, election uncertainty, and shortage of qualified engineering resources caused deferrals of several notable prospective project opportunities in H1 FY2025. However, management expects stronger revenues and profits in the second half, supported by an increased work in hand of $40.0 million (up from $36.6 million at 31 October 2024). Verbrec's unweighted opportunity pipeline has also increased by $31.8 million to $131.0 million. The company has secured several significant project awards and contracts, including a $4.2 million Port Adelaide Electrical Upgrade, over $25 million in Gas Market Transition and Decarbonisation projects, and the Front-End Engineering and Design (FEED) contract for a major energy infrastructure project. Verbrec has also expanded its training presence in Western Australia and made key management appointments to drive growth and energy transition initiatives.

Verbrec expects to deliver stronger revenue, gross margin and EBITDA results in the second half FY2025 as deferred projects start to come online, strategic partnerships crystallise and the company capitalises on its high-quality opportunity pipeline. A key focus will be diligent overhead control and reduction, securing economically attractive project opportunities, and developing key alliances and partnerships to increase the breadth and depth of Verbrec's services offering.