Macmahon Holdings Limited

For FY26, Macmahon reported revenue of $2.6 billion and EBITA of $190.1 million, with EBITA margin at 7.3% versus 7.1% in the prior year. Underlying operating cash flow was $387 million, free cash flow was $103.1 million, net debt was $111.1 million, and ROACE was 22%. Total dividends rose 47% to $0.022 per share fully franked. Management said revenue was up 8% and underlying EBITA was up 11%, while free cash flow was lower mainly because of final FY25 tax and FY26 provisional tax payments. For FY27, the company guided to revenue of $2.85 billion to $3.05 billion and underlying EBITA of $205 million to $225 million.

Mick Finnegan emphasized that Macmahon has built a more diversified, lower-capital-intensity business and said that strategy is supporting record results, better ROACE and stronger shareholder returns. He highlighted growth in underground mining, civil infrastructure and Indonesia, and framed the company as an end-to-end service provider with a strong pipeline of follow-on work. His tone was confident but measured, acknowledging geopolitical, commodity and fuel-cost challenges while saying the company is navigating them well.

Ursula Lummis focused on the financial progression: EBITA margins improved from 5.9% in FY22 to 7.3% in FY26, helped by cost management, efficiency and lower-capital services. She pointed to revenue growth of 8% and underlying EBITA growth of 11%, effective borrowing costs of 6.72% versus 6.0% in FY25, a 30.6% tax rate, and about $104 million of franking credits. On cash, she cited cash conversion of 98.4%, free cash flow of $103.1 million, CapEx of $200.5 million including about $20 million of growth CapEx, and liquidity of $566 million in cash plus committed banking facilities.

Analysts focused on FY27 margin drivers, interest and tax assumptions, the mix of awarded work, and M&A priorities. Management said interest expense should stay flat into FY27 and tax should remain around 30% for both P&L and cash flow, while FY27 margins should be broadly similar to FY26 at the 7.3% midpoint because higher-margin underground growth is being offset by lower-margin but lower-capital civil work. On guidance, management said the $2.2 billion of secured FY27 work excludes normal churn and the preferred-contractor Ravensthorpe project, and that the $13.8 billion tender pool includes a larger share of opportunities where Macmahon has a better-than-normal win chance. On M&A, they said they are looking for debt-funded deals that extend end-to-end services in existing jurisdictions.