Emeco Holdings reported fiscal 2026 operating free cash flow of $127.6 million, underpinning a board-approved on-market share buyback of up to 10% of shares outstanding and a stated target to lift return on capital to 20% by FY28.
Revenue for the year ended June 30, 2026, rose 1% year-over-year to $792.8 million, while operating EBIT increased 2% to $148.0 million. Operating EBIT margin expanded by 10 basis points to 18.7%, and operating NPAT grew 5% to $89.0 million. Earnings per share advanced 2% to 14.8 cents. Operating EBITDA declined 3% to $292.5 million, with the margin contracting 140 basis points to 36.9%.
Return on capital improved 30 basis points in FY26 to 16.9%, marking a 370-basis-point increase since FY23. Management reiterated a target of 20% ROC, supported by cumulative operating free cash flow of more than $350 million over the past four fiscal years. Operating free cash flow yield stood at 23% as of June 30, 2026, with cash conversion at 108% of operating EBITDA.
Net leverage fell to 0.43x from 0.65x a year earlier and 1.10x in FY23, reflecting a $67.8 million reduction in net debt to $127.1 million. Total liquidity stood at approximately $315 million, including $125 million in cash and undrawn credit facilities. Interest coverage improved to 13.7x on an adjusted basis.
The company’s maintenance services segment accounted for 50% of gross revenue in FY26, up from 45% in FY25 and 34% in FY23. The rental segment generated $637 million in revenue, up 4%, with surface equipment utilization at 82% and underground at 67%. The fleet totaled 840 units with a written-down value of $888 million. Force maintenance revenue reached $277 million, supported by 143 machine rebuilds and 983 component rebuilds, alongside a 37% increase in field service hours.
Geographic exposure remained concentrated in Western Australia at 47%, Queensland at 31%, and New South Wales at 19%, with commodity revenue split among gold (33%), iron ore (30%), and metallurgical coal (19%). Management noted 95% of revenue is fully insured against credit risk.
For FY27, Emeco guided to earnings broadly in line with FY26, with net capital expenditure projected at $155–$165 million and depreciation at $145–$150 million. Surface equipment utilization is targeted to rise to approximately 90% by year-end FY27, with underground utilization projected at 80%. The company expects operating free cash flow to increase to roughly $140 million in FY28, aligning with its 20% ROC objective.
