AJ Lucas Posts $32.6M EBITDA on UK Settlement, Australian Operations Up

Quarterly Financial Overview

AJ Lucas Group Limited has reported its quarterly results for the period ended 30 September 2025, revealing a mixed but generally positive picture. Revenue for the quarter was $35.7 million, a slight decline from $38.3 million in the same period last year. However, the company’s Australian operations showed marked improvement with EBITDA rising to $7.9 million, up from $5.5 million a year earlier, reflecting operational efficiencies and reduced maintenance costs.

Group EBITDA was notably impacted by a one-off event – a £12.5 million (approximately $25.9 million AUD) cash settlement from a dispute in the UK related to shale gas exploration licences. This settlement inflated the group EBITDA to $32.6 million for the quarter. Excluding this settlement, EBITDA stood at $6.7 million, still an improvement over the previous year’s $4.7 million, indicating underlying operational strength.

Operational Developments and UK Settlement

The UK subsidiary, Cuadrilla Resources Limited, resolved a long-standing dispute regarding a carry agreement on shale gas licences, resulting in the substantial cash inflow. While the moratorium on hydraulic fracturing remains in place in the UK, the company continues to pursue conventional gas opportunities unaffected by this ban. The termination of the carry agreement removes a layer of uncertainty and provides a clearer path forward for Cuadrilla’s UK operations.

In Australia, the company welcomed a new 100-tonne multi-purpose drilling rig equipped with advanced safety and automation features, including hands-free pipe handling and AI safety systems. This rig is designed to service multiple sectors such as steel-making coal, coal seam gas, and water markets, as well as support carbon capture initiatives. The addition of this rig underscores AJ Lucas’s commitment to modernising its fleet and expanding its service capabilities.

Liquidity and Financial Position

AJ Lucas ended the quarter with $13.9 million in cash and cash equivalents and had $12.1 million undrawn on its $50 million senior syndicated facility. The company’s net cash generated from operating activities was a strong $30.2 million, largely buoyed by the UK settlement proceeds. The group continues to manage its debt facilities prudently, with the senior syndicated facility secured against key assets and subject to financial covenants, all of which were met during the quarter.

Related party payments amounted to approximately $1.4 million, primarily reflecting executive and director remuneration and associated tax and superannuation obligations. The company remains in discussions with lenders to optimise the use of available funds, indicating a proactive approach to capital management.

Outlook and Market Positioning

Despite the suspension of mining operations at two major Australian client sites, AJ Lucas’s quarterly results demonstrate resilience and operational improvement. The company expresses optimism about sustaining strong performance throughout FY26, contingent on the absence of unforeseen disruptions. The deployment of next-generation drilling technology and ongoing UK conventional gas projects position the group well to navigate industry challenges and capitalise on emerging opportunities.