The Environmental Group Limited reported a robust first half of FY26 with revenue rising 8.6% to $58.9 million and underlying EBITDA jumping 25.9%, driven by strong performances in its Energy and Waste divisions alongside strategic operational upgrades.
- Revenue increased 8.6% to $58.9 million
- Underlying EBITDA up 25.9% to $4.9 million
- Recurring revenue now represents 54.3% of total revenue
- Significant growth in EGL Energy (39.8% revenue increase) and EGL Waste
- ERP system upgrade and business unit relocations to boost efficiency
Strong Financial Momentum Amid Operational Transition
The Environmental Group Limited (EGL) has delivered a compelling first half for FY26, posting an 8.6% increase in revenue to $58.9 million and a striking 25.9% rise in underlying EBITDA to $4.9 million. This performance underscores the company’s resilience and growth potential despite ongoing business transitions, including a major ERP system upgrade and relocation of multiple business units.
Recurring revenue now accounts for over half of EGL’s total revenue at 54.3%, reflecting the company’s strategic shift towards stable, service-based income streams. This recurring revenue is largely derived from maintenance contracts, routine servicing, and spare parts supply, providing a solid foundation for sustainable growth.
Division Highlights – Energy and Waste Lead the Charge
EGL Energy emerged as the standout performer, with revenue soaring 39.8% to $34.1 million and EBITDA climbing 32.6% to $4.1 million. This division’s growth was supported by approximately 14,000 boiler services annually and the recent distribution agreement for the Gestra product range, expanding its footprint in boiler controls and valves.
Meanwhile, EGL Waste recorded a remarkable revenue increase from $0.6 million to $2.3 million, driven by the commissioning of a large-scale PFAS plant and strategic acquisitions such as Dashton Engineering. These moves have enhanced EGL’s capabilities in waste plant upgrades, repairs, and maintenance contracts, positioning the division for further expansion.
Innovation and Efficiency – ERP Upgrade and PFAS Testing Device
Operationally, EGL has invested heavily in upgrading its ERP system, consolidating three legacy platforms into a unified solution. This upgrade is expected to improve data capabilities and operational efficiencies, supporting future business initiatives. Additionally, the company has developed a rapid on-site PFAS testing device capable of delivering results within one hour, offering customers immediate insights into contamination levels and enhancing EGL’s environmental technology portfolio.
Relocation of multiple business units is also underway, aimed at long-term operational efficiencies. While these transitions have caused temporary inefficiencies, management remains confident that these investments will drive improved earnings and profitability going forward.
Outlook – Confident Growth and Strategic Expansion
Looking ahead, EGL has reaffirmed its guidance for FY26, targeting a 15% to 20% increase in normalized EBITDA over FY25. The company anticipates continued strengthening of recurring revenue streams and plans to pursue organic growth alongside disciplined strategic acquisitions. With a strong pipeline of projects, including engineering work for a new lithium plant and construction of waste facilities in New South Wales and Queensland, EGL appears well-positioned to sustain its upward trajectory.
Bottom Line?
EGL’s strategic investments and division growth set the stage for a promising FY26, but execution risks during operational transitions remain a watchpoint.
Questions in the middle?
- How quickly will the ERP system upgrade translate into measurable operational efficiencies?
- What is the commercial potential and market adoption timeline for the rapid PFAS testing device?
- Can EGL sustain growth momentum in divisions like Baltec and Clean Air, which showed revenue declines?