Mader Group (ASX:MAD) reported record first-half results for FY2026, with management highlighting continued demand across regions, progress toward its five-year strategic plan, and a shift in capital management aimed at supporting future growth.
Record half-year revenue and earnings growth
For the half year, Mader delivered revenue of AUD 485.2 million, up 18% versus the prior corresponding period (PCP). Net profit after tax (NPAT) rose 17% to AUD 30.5 million, which management said equated to an NPAT margin of 6.3%, consistent with the PCP and aligned with the company’s typical first-half/second-half seasonality.
Earnings per share increased to “just over” AUD 0.15 per share, up 16% on the PCP.
Balance sheet, cash flow, and dividend decision
Management emphasized improved cash collection and a strengthened balance sheet. Hegarty said days sales outstanding fell by 10 days to 50 days, down from 60 days. Net debt was reduced by 57% to about AUD 3.4–3.6 million by period end, which he said translated to net leverage of 0.03x. He added the company remained well supported by lenders, including NAB in Australia, with working relationships also established in the U.S. and Canada.
Net cash flow from operations was AUD 30.9 million. The company reported operating cash flows before interest and tax of 98% of EBITDA, which management attributed to the quality of the client base and trade receivables ledger. Free cash flow increased to AUD 15.8 million, marking the sixth consecutive half-year period of positive free cash flow.
The board suspended the interim dividend following a review of its capital management strategy. Hegarty said the decision, together with improved free cash flow, was intended to accelerate Mader’s pathway to net cash and strengthen liquidity to support a “more aggressive approach to organic and inorganic growth opportunities.” Management described the company’s past dividend payments as modest (citing a dividend yield of circa AUD 0.01) and said the focus remained on capital allocation to fund growth and increase financial flexibility.
Segment performance and demand backdrop
Management said demand remained strong across regions and service offerings, with revenue growth in each operating segment:
- Australia: revenue increased 19% versus the PCP. Management pointed to continued scaling in infrastructure maintenance, road transport, and rail alongside growth in the core business.
- North America: revenue reached AUD 90 million, representing the third consecutive half-year period of growth. Hegarty said the region now represents “almost 20%” of group revenue, with an encouraging visible workflow pipeline. In Q&A, management said there were “close to 100 unfilled roles” in North America based on current demand and that recruitment efforts included internal hiring and the Global Pathways program.
- Rest of world: revenue increased 36%, which management said was supported by diversification of global operations including placing “first boots on the ground” in New Zealand. Management described the segment as small but said it remained important for specialized technicians and would be approached cautiously, with a focus on Tier 1 clients in safe and stable jurisdictions.
Chief Executive Justin (speaking during the presentation and Q&A) also discussed diversification within Canada, saying the business had broadened from being oil sands dominant to a wider commodity mix. He said oil sands exposure had reduced to around 30% from about 90% two years ago, with growth across other commodities including gold, precious metals, copper, coal, phosphates, and aggregates.
Margins, incentives, and cost initiatives
Hegarty explained that EBITDA growth (+9.2% versus PCP) lagged NPAT growth due to higher annual short-term incentive payments that scaled upward with improved earnings momentum. He described the incentives as a performance-driven feature that accelerates with NPAT growth and is expensed across the year, adding that the company typically sees operating leverage in the second half as revenue grows without incentives scaling at the same rate during that period.
In response to questions on margin initiatives, management cited incremental optimization projects such as renegotiated flight discounts (completed and in place for the second half) and PPE sourcing initiatives. Management also discussed operating leverage, noting overhead had been built ahead of revenue in some teams, including infrastructure maintenance, with expectations of improved leverage as revenue expands.
In Q&A, management provided cost items impacting the first half, including incentive/bonus expense of about AUD 6 million on a pre-tax basis and flights of about AUD 1.5 million, and noted a roughly AUD 1.5 million interest expense difference to the NPAT line reflecting lower net leverage.
Strategy progress, workforce growth, and FY2026 guidance
Management reiterated that the business is in the final year of its five-year strategic plan, which focuses on geographic diversification, service line diversification, expansion into additional industry verticals, and scaling the existing business. The company highlighted culture-led programs, including Global Pathways and Three Gears, and said more than 160 employees participated in short- and long-term overseas secondments during the half.
Mader reported net headcount growth of more than 250 people in the first half despite competitive labor markets. Management said approximately 7%–8% of that net growth was in support functions, with the remainder being field-deployed technicians.
On capital intensity, management said expansion into service lines such as infrastructure maintenance, rail, and road transport has reduced the need for a service vehicle per incremental employee compared with more vehicle-intensive field service models, supporting improved free cash flow as the business scales.
The company reaffirmed FY2026 guidance of AUD 1 billion in revenue and NPAT of at least AUD 65 million. Management also said it expected to release its next five-year strategic plan roughly two months from the call, ahead of the end of the financial year.
About Mader Group (ASX:MAD)
Mader Group Limited, a contracting company, provides specialist technical services in the mining, energy, and industrial sectors in Australia and internationally. It offers fabrication and line boring, electrical services, mechanical maintenance, and component exchange; infrastructure maintenance, rail services, power generation and marine, road transport maintenance, maintenance project, specialised tool hire, clean team, maintenance centre, and training and mentoring services. The company also provides in-field technical support, major overhauls and repairs, preventative equipment maintenance, training of maintenance teams, and ancillary services.
