Can Lycopodium Sustain Margins Amid Rapid Expansion and Market Shifts?

Robust Financial Performance

Lycopodium Limited has reported a strong finish to FY25, with revenue reaching $339.6 million and net profit after tax (NPAT) of $42.2 million, both figures landing at the upper end of the company’s February guidance. This performance reflects a shift towards Engineering, Procurement and Construction Management (EPCM) projects, which have become the predominant revenue driver, replacing the supplementary Engineering, Procurement and Construction (EPC) contracts of previous years. The company’s disciplined approach to margin management has resulted in a sustainable NPAT margin of 12.4%, comfortably above its 10% target.

Strategic Expansion in the Americas

A highlight of the year was the majority acquisition of SAXUM, a move that significantly enhances Lycopodium’s geographic reach across the Americas, including Argentina, Brazil, and the USA. This acquisition is expected to increase Lycopodium’s total addressable market by over 40%, providing immediate contribution to profit before tax and positioning the company to capitalize on the region’s growing demand for critical minerals and infrastructure projects. The company also established new offices in Vancouver and expanded its team in Lima, further cementing its presence in key mining hubs.

Diverse and Growing Project Portfolio

Lycopodium’s project portfolio remains broad and diversified, spanning resources, industrial processes, and rail infrastructure. The resources segment, which accounts for approximately 94% of FY25 revenue, includes major projects such as the Kiaka Gold Project in Burkina Faso, the Goose Project in Canada, and the imminent Boto Gold Project in Senegal. The company also secured significant greenfield EPCM contracts for gold projects across Africa, including the Koné Gold Project in Côte d’Ivoire and the Baomahun Gold Project in Sierra Leone.

In industrial processes, Lycopodium completed the design of a modular battery recycling facility in regional Australia and advanced the Kalgoorlie Nickel Project, a key development in Australia’s energy transition. Rail infrastructure projects continued to contribute steady revenue, with notable work on interstate rail network safety upgrades and asset inspections across Australia.

Operational Strength and Innovation

The company maintained a strong balance sheet with minimal debt and a cash reserve of $79 million, funding the SAXUM acquisition without resorting to debt or equity dilution. Operationally, Lycopodium invested in systems and processes to enhance global work sharing and efficiency, alongside expanding its learning and development initiatives to support its growing workforce of over 1,300 employees worldwide. Safety metrics remained excellent despite increased work hours, underscoring the company’s commitment to a safe working environment.

Innovation remains a core pillar, with ongoing development of digital twins, energy storage technologies, and modular plant solutions that enhance project delivery and client value. Lycopodium’s participation in industry collaborations and R&D initiatives positions it well to support the evolving needs of the clean energy and critical minerals sectors.

Positive Outlook for FY26

Looking ahead, Lycopodium is optimistic about FY26, buoyed by strong demand for critical minerals driven by the global energy transition, sustained investment in gold exploration and production, and government-backed infrastructure projects in Australia. The company plans to continue leveraging its expanded geographic footprint, technical expertise, and disciplined risk management to deliver sustainable growth and shareholder returns. Full FY26 guidance is expected at the November AGM.