Johns Lyng Group reported a modest revenue increase to $1.18 billion in FY25, driven by organic growth and key acquisitions, while agreeing to a $1.1 billion takeover scheme with Pacific Equity Partners.
- FY25 revenue up 1.8% to $1.18 billion
- Record Business-as-Usual EBITDA of $118 million despite decline in catastrophic event earnings
- Acquisitions of Chill-Rite HVAC, SSKB Strata, and Keystone Group expand service and geographic footprint
- Entered Scheme Implementation Deed with Pacific Equity Partners for $4.00 per share takeover
- No final dividend declared due to Scheme conditions
Financial Performance and Operational Resilience
Johns Lyng Group Limited has released its FY25 results, reporting a revenue increase of 1.8% to $1.18 billion, reflecting steady growth in a challenging external environment. The group delivered a resilient EBITDA of $126.8 million, a slight decline of 2.1% compared to the previous year, but notably achieved a record Business-as-Usual (BaU) EBITDA of $118 million. This performance underscores the strength of Johns Lyng’s diversified business model and its ability to generate stable earnings outside of volatile catastrophic (CAT) event income.
The decline in CAT earnings, down 68.2% to $8.8 million, was attributed to unusually benign weather conditions and fewer large-scale disaster events during the year. Despite this, the group’s core operations showed robust growth, supported by disciplined cost management and operational efficiencies, including a global headcount reduction and tighter discretionary spending controls.
Strategic Acquisitions Bolster Market Position
FY25 was marked by significant strategic progress through acquisitions that expanded Johns Lyng’s geographic reach and service capabilities. The group’s subsidiary Air Control acquired an 83.7% stake in Chill-Rite HVAC, a leading heating, ventilation, and air-conditioning provider in regional New South Wales. Bright & Duggan, the group’s strata management arm, completed the acquisition of SSKB Strata, adding over 44,000 lots across 790 schemes and strengthening its east-coast presence.
Further enhancing its Insurance Building & Restoration Services (IB&RS) division, Johns Lyng acquired an 87.5% interest in Keystone Group, a prominent player in insurance repairs, restoration, and hazardous material removal. These acquisitions align with the group’s strategy of disciplined expansion into complementary markets and services, reinforcing its position as a market leader in Australia and supporting future growth.
Takeover Proposal and Shareholder Implications
In a major development post-year-end, Johns Lyng entered into a Scheme Implementation Deed with Sherwood BidCo Pty Ltd, an entity controlled by Pacific Equity Partners (PEP). The proposed Scheme offers $4.00 cash per share, valuing the company’s equity at approximately $1.1 billion and enterprise value at around $1.3 billion. This represents a substantial premium of 77% to the closing share price before PEP’s initial offer and 57% to the price prior to the announcement.
The Independent Board Committee unanimously recommends the Scheme, subject to the absence of a superior proposal and confirmation from an Independent Expert that the transaction is in shareholders’ best interests. The Scheme is fully funded and contingent on customary conditions including shareholder and court approvals, with Scheme Meetings expected in October 2025 and implementation anticipated in November 2025.
Dividend Policy and Capital Management
Reflecting the pending Scheme and its conditions, Johns Lyng did not declare a final dividend for FY25. The group’s dividend policy is aligned with the Scheme Implementation Deed, which contemplates permitted dividends only under certain surplus cash conditions that are not expected to be met. The group maintains a strong balance sheet with net assets increasing to $504.9 million, supporting ongoing operational and strategic initiatives.
ESG and Corporate Culture
Johns Lyng continues to invest in Environmental, Social, and Governance (ESG) initiatives, emphasizing employee development, health and safety, and customer service excellence. The group reported strong employee engagement and has embedded a customer-first culture across its operations. Its commitment to sustainability and community support remains a core pillar of its corporate responsibility framework.
Bottom Line?
As Johns Lyng Group awaits shareholder approval for the Pacific Equity Partners takeover, investors will watch closely how the integration of recent acquisitions and US market expansion shape its future trajectory.
Questions in the middle?
- Will the Scheme of Arrangement receive the necessary shareholder and regulatory approvals as scheduled?
- How will Johns Lyng integrate and leverage its recent acquisitions to sustain growth amid fluctuating CAT event activity?
- What progress and challenges lie ahead for Johns Lyng’s expansion in the US insurance restoration market?