The Environmental Group Ltd. (ASX: EGL) reported flat total revenue of $112 million for FY26, as recurring sales rose to more than 55% of the total and grew at a 25.2% compound annual rate since FY22. Underlying EBITDA met revised guidance at $8.7 million, down 22% year-over-year, while the company absorbed $10.8 million in one-off costs tied to ERP implementation, facility relocations and contract write-offs.
EGL Energy, the largest division, posted a 20.2% revenue increase to $64.5 million, with service revenue climbing to $47.2 million. EBITDA fell 7.7% to $7.0 million and margins compressed to 10.9%, though 73% of revenue remained recurring. EGL Waste Services grew revenue 27.7% to $4.7 million but EBITDA declined 41.3% to $1.0 million. EGL Baltec’s sales dropped 25.5% to $26.6 million, while EGL Clean Air’s revenue fell 3.9% to $18.9 million with EBITDA down 35.5% to $1.1 million.
Cash generation remained positive at $2.3 million in operating cash flow, though underlying cash generation totaled $9.5 million before outflows for ERP costs, interest, taxes, capital expenditures and lease liabilities. The net cash position widened to negative $3.0 million from negative $0.8 million at June 30, 2026, with $6.2 million of a $7 million overdraft facility unused.
Operational headwinds included a $2.5 million ERP impact in EGL Energy following the internal completion of an Oracle NetSuite rollout after the external provider was dismissed. EGL Baltec faced approximately $1.5 million in timing and logistics costs from delayed deliveries, shipping disruptions and slower tender awards, compounded by geopolitical shipping delays through the Strait of Hormuz. The company treated over 5 million liters of PFAS-contaminated water during the year and expects four PFAS plants to be fully commissioned by March 2027, with patents secured in Australia, the U.S. and Europe. EGL also secured a rare earths project contract with Ozango Minerais S.A. valued at approximately A$9 million.
The share price traded at $0.09, down 3.23% on the day, near the 52-week low of $0.085 and roughly 67.5% below the 52-week high of $0.28.
