Austin Engineering’s growth revenue up 27% to $258m in FY23

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Image credit: Austin Engineering

ASX-listed global engineering firm Austin Engineering announced that its FY23 group revenue was 27 per cent higher year-on-year at $258.3 million, marking another solid year of growth following the implementation of the Austin 2.0 company strategy in late 2021.

“The maturing of the Austin 2.0 operational strategy is clearly driving business performance, with both revenue and order book up significantly in the year and, as a result, we are well positioned for the future,” said David Singleton, Austin CEO and managing director. 

Results also showed that normalised Group EBITDA increased by 10 per cent year on year to $31 million. Following a focus on cost reduction, enhanced manufacturing systems, and greater revenue, EBITDA margins in Indonesia, the United States, and Chile all grew to Austin’s goal levels. 

Normalised net profit after tax (NPAT) was $18.1 million, falling within Austin’s target range of $17 million to $19 million and representing an 8.4 per cent growth over the previous comparable period (pcp). Statutory NPAT was $7.1 million, down from $20.6 million in FY22.

Singleton emphasised that the group operational cash flow increased to $15.8 million, more than three times what it was in FY22. 

He said this is especially impressive given a $28.3 million rise in raw materials inventory, which the company intends to unwind during FY24 as it returns to a more typical level of stock holdings.

Revenue in Asia Pacific climbed by 32 per cent to $141.9 million, reflecting overall expansion and the inclusion of a part-year contribution from Mainetec. 

Despite a slower-than-expected benefit from the AustBuy program, Mainetec boosted its EBITDA margin to 14 per cent and is now well-positioned to expand sales and profit in FY24.

“The acquisition of Mainetec has been instrumental in growing our highly complementary bucket business with new offerings to the market, which have driven a 75 per cent revenue increase in this segment even at this very early stage,” Singleton stated. 

In FY23, revenue in Indonesia rose by 51 per cent. As a result of the Batam facility’s modernisation and expansion to become a key hub for advanced manufacturing, revenues in this business unit have surged by 2.5 times in the past two years.

“Our Indonesian facility is a powerful differentiator for our business as we seek to drive down costs and increase capacity to meet customer product delivery requirements. The expansion in Indonesia was timely as it met increased demand locally but also importantly from Australia and the US as evidenced by a 51 per cent surge in revenue year-on-year,” Singleton explained. 

North America was the strongest region, with sales increasing by 13 per cent to $75 million and normalised EBITDA rising to $19.7 million.

Austin said it estimates H1 FY24 underlying NPAT to be in the $10 million to $12 million range, up about 100 per cent from the prior corresponding quarter.

As it improves its liquidity position in FY24, Austin said it will also look at possible M&A options, but it anticipates funding any acquisition internally. 

The ASX-listed company said it will concentrate on making strategic acquisitions that expand its worldwide footprint and increase market share for its primary mining equipment.