Tasmea (ASX:TEA) executives told investors the company delivered a strong first-half result and reiterated full-year earnings guidance, citing continued organic growth, early benefits from acquisitions, and a highly visible second-half workload supported by long-term customer agreements and a growing order book.
Half-year performance and guidance reaffirmed
Managing Director Stephen Young said underlying EBIT for the half year was AUD 44.3 million, up 36% from AUD 32.6 million in the prior corresponding period. Underlying EBIT margin increased to 13.7% from 13.2%.
On statutory results, management highlighted statutory EBIT of AUD 40 million and net profit after tax of AUD 22 million. The interim dividend was set at AUD 0.06 per share, up 20% from the prior interim dividend. The company also reported underlying net profit after tax of AUD 26.6 million, up 32% from AUD 20 million, and earnings per share of AUD 0.106, up 19%.
Young and the executive team reiterated full-year guidance, including underlying EBIT guidance of AUD 117 million (up 57% year-on-year) and net profit after tax guidance of AUD 72.5 million (up 37%), as stated in the presentation. Management also emphasized that the second-half earnings profile was consistent with prior years.
WorkPac integration: recruiting momentum and synergy targets
Executive Director Mark Vartuli said integration of WorkPac was “well advanced,” describing the business as a “growth engine” for Tasmea by recruiting to support demand across operating subsidiaries. The company identified approximately AUD 2 million in annual cost synergies, with benefits expected to start in the second half and reach a full run rate into FY 2027.
In response to an analyst question, Vartuli said roughly half of the 140 roles currently being recruited are in the electrical area, with hiring also directed toward mechanical shutdown work, rope access roles in South Australia and Queensland, and some civil roles. He said systems and working capital structures were “bedded down,” with an interface now implemented to connect WorkPac recruiting to subsidiary demand.
Looking ahead, he cited payroll integration as a major opportunity, with work beginning in March on the first rollout into the company’s ERP system and a broader rollout expected to take “probably 12 months” across subsidiaries. He also said Tasmea is seeking to redirect labor hire spend (which he described as about AUD 12 million last year) through WorkPac to retain margin within the group.
Second-half visibility: contracted revenue and scheduled delivery
Executive Director Trent Northover said Tasmea forecast revenue of over AUD 700 million for FY 2026, with AUD 663 million (or 93%) described as delivered, secured, recurring, or intended revenue, which he said was 26% higher than the same time last year. He added the company had over AUD 340 million scheduled for delivery in the second half, providing earnings visibility.
Northover and other executives pointed to the company having more than 100 executed long-term agreements (MSAs), which they said underpin contracted revenue streams and help build barriers to entry. Management also cited record customer demand and increasing interest from tier-one customers, particularly in connection with WorkPac’s labor capability.
Vartuli said the company’s bridge from first-half EBIT to full-year guidance was supported by “identifiable and executable” second-half drivers, including MSA execution, order book conversion in Mechanical and Civil, delayed client works moving into the second half, recruitment support from WorkPac, and cost-out initiatives. He emphasized the second half was not a “step change in risk,” but rather the conversion of secured work and implemented initiatives.
Segment commentary: Electrical and Civil lead; Mechanical and Water show signs of improvement
Executive Director Jason Pryde said the Electrical segment produced record underlying EBIT of AUD 18.6 million, up 29%, and now represents 42% of underlying group EBIT. He cited strong demand across subsidiaries and said the outlook remains positive, supported by electrification-related client needs.
In Q&A, management clarified that comparisons at the EBIT line can be affected by prior-period items, noting that the prior half included a AUD 4.6 million financial derivative gain. Pryde said order books and tender activity in Electrical were at record levels and that decarbonization and electrification demands were driving opportunities across the group.
In Civil, Pryde reported underlying EBIT of AUD 13.9 million, up 92%, with revenue up 57%. He attributed the margin improvement primarily to outperformance at one recent acquisition. He said the civil order book is growing, supported by a record tender pipeline, and expects margins to be maintained for the remainder of FY 2026.
For Mechanical, Northover said revenue was relatively flat, but performance was improving across several businesses. He said GMS received significant orders in the prior month expected to generate activity in calendar 2026, and noted a client deferral at Rollwell that pushed a construction project into the second half. He also said Heavymech had completed a relocation to a new facility, and Tasman Rope Access was executing work consistently in line with budget. In response to an analyst question on rig fleet utilization, management said there was no immediate shift in demand but an increased level of inquiry, while guidance did not assume a material change in rig hire demand.
In Water and Fluid, Northover said revenue was also relatively flat, but EBIT increased by 11%, driven by outperformance at higher-margin businesses Labtech and AusPress. He added the company was seeing customer discussions in mining and water around tailings dams and regional water storage.
Balance sheet, cash conversion, and acquisitions
Management emphasized cash generation as a core feature of the model. Vartuli said Tasmea delivered 130% EBIT-to-cash conversion in H1 2026 and over 108% for the last 12 months, with underlying free cash flow of AUD 26.5 million, equating to 100% NPAT-to-free-cash-flow conversion.
Young said net debt declined to AUD 68 million from AUD 110 million at 30 June 2025, and the company reported gearing of 0.45x net debt to EBITDA. Management also discussed a conservative payout ratio of around 35% cash payout, within its 30%–50% target range, and said founders and executive directors would participate materially in the dividend reinvestment plan.
On M&A, executives said the acquisition pipeline remains robust and the company expects to remain active, focused on “programmatic” acquisitions of maintenance-oriented trade services businesses servicing the mining and resources sector.
About Tasmea (ASX:TEA)
Tasmea Limited provides shutdown, maintenance, emergency breakdown, and capital upgrade services in Australia. It operates through four segments: Electrical, Mechanical, Civil, and Water & Fluid. The Electrical segment provides electrical shutdown, preventative, programmed and reactive maintenance, emergency breakdown repair, fault finding, and statutory compliance services, as well as electrical upgrades for brownfield and greenfield projects, and high-voltage testing and commissioning services.
