Emeco Holdings Limited

Emeco reported group revenue of $421 million, up 9% year on year. Operating EBITDA was $155 million, up 7%, operating EBIT was $77 million, up 13%, operating NPAT was $46 million, up 21%, and statutory profit after tax was $38.7 million, up 15%. Operating free cash flow was $67 million, up 37%, with cash conversion of 110%; return on capital reached 18% and net leverage improved to 0.5x. Rental revenue increased 14% to $342 million, and Force delivered gross revenue of $141 million with gross operating EBITDA of $18.3 million and gross operating EBIT of $15 million. For FY26, management expects stay-in-business capex of about $170 million to $175 million, depreciation of $160 million to $165 million, and nonrecurring spend of about $15 million; second-half CapEx will be lower and aligned with full-year guidance.

Ian Testrow framed the half as evidence that Emeco’s simplified business model and disciplined capital management are working, saying the company has now delivered six consecutive halves of period-on-period growth in earnings and cash flow. He emphasized that maintenance services, fleet utilization, and technology are the core drivers of the strategy, and said the business is positioned to pursue disciplined organic and inorganic growth while targeting 20% returns for shareholders. His tone was upbeat and confident, especially on the refi, balance sheet strength, and the company’s ability to use existing fleet capacity before adding more capital.

Theresa Mlikota focused on the financial mechanics behind the results: statutory PAT of $38.7 million, operating PAT of $46.5 million, operating free cash flow of $67 million, and a $11.3 million working-capital release helped by debtor collections and timing benefits on creditor payments. She said stay-in-business CapEx was $90.7 million in the half, net CapEx was $86.7 million after $4 million of asset-sale proceeds, and cash increased by $45 million to $171 million at period end. She also noted net debt fell by $52 million since June, net leverage is 0.5x, and the company completed a 5-year $355 million syndicated bank facility on better pricing and conditions, with no shareholder distribution recommended as the board prioritized flexibility for growth.

In Q&A, analysts asked how long it might take Emeco to reach its 20% return-on-capital target. Management said the key lever is utilization, suggesting moving fleet utilization from about 85% toward 90% could get the company to 20%, with further support from continued growth in low-capital maintenance earnings. They were also asked about M&A pricing and competition; Ian Testrow said the company has not been overly active, but is considering both competitor consolidation and acquisitions that broaden its maintenance and asset-management capabilities, while staying disciplined on valuation and fit.