Austco’s Earn-Out Adjustment Could Weigh on Net Profit Despite Strong Earnings
Austco Healthcare reports robust FY25 growth with revenue climbing over 37% and EBITDA soaring by more than 54%, fueled by strong organic performance and key acquisitions.
- Revenue up 37% to $80-$82 million in FY25
- EBITDA increases over 54% to $12.5-$13.5 million
- Acquisitions of Amentco and G&S Technologies drive growth
- G&S acquisition fully funded by operating cash flow
- Earn-out adjustment for Amentco raises expenses but not EBITDA
Strong Financial Momentum
Austco Healthcare Limited (ASX – AHC) has delivered a standout performance for the financial year ended 30 June 2025, with unaudited guidance revealing a revenue increase of over 37% to between $80 million and $82 million. Even more impressive is the growth in EBITDA, which is expected to rise by more than 54% to a range of $12.5 million to $13.5 million. This robust financial momentum underscores Austco’s successful execution of its strategic plan and operational discipline.
Acquisitions Fuel Growth and Cash Strength
The company’s growth story is significantly bolstered by its recent acquisitions. The May 2024 acquisition of Amentco Enterprise Group Pty Ltd not only met but exceeded expectations in the second half of FY25, validating Austco’s strategic rationale. Furthermore, the acquisition of G&S Technologies Limited in late May 2025 was notable for being fully funded through operating cash flows, a testament to Austco’s strong cash generation capabilities. This move also helped increase the company’s cash reserves to $14.4 million, up 6% from the previous year.
Contracted Revenue and Earn-Out Adjustments
Unfilled contracted revenue has climbed to $55.8 million, reflecting both the addition of G&S Technologies and continued strong operational performance, including a record $13.2 million revenue month in June 2025. However, the company also disclosed an earn-out adjustment related to the Amentco acquisition. The final earn-out payment is now expected to be approximately $8.4 million, up from the previously accrued $5.9 million. While this $2.5 million increase will reduce statutory net profit due to accounting standards, it does not impact EBITDA, preserving the core earnings metric.
Looking Ahead with Confidence
CEO Clayton Astles highlighted the transformative nature of FY25, emphasizing the company’s ability to fund acquisitions internally while maintaining a strong balance sheet. With a solid pipeline of contracted revenue and positive momentum across key markets including Australia, New Zealand, North America, and Asia, Austco enters FY26 with confidence. The company plans to release its audited full-year results on 26 August 2025, which will provide further clarity on its financial position and strategic outlook.
Bottom Line?
Austco’s strong FY25 sets the stage for continued growth, but investors will watch closely how earn-out settlements and integration unfold.
Questions in the middle?
- Will Austco settle the Amentco earn-out partly in shares or cash, and what impact will that have?
- How will the integration of G&S Technologies influence Austco’s operational efficiency and margins?
- Can Austco sustain its double-digit growth trajectory amid evolving healthcare market dynamics?
