Ashley Services Group has reported a robust first half for 2026, with significant growth in earnings and dividends, underpinned by strong labour hire and training divisions.
- EBITDA increased 41% to $7.6 million
- Net profit after tax rose 88% to $3.4 million
- Revenue growth driven by contract wins in supply chain, retail, and construction
- Interim dividend raised to 1.4 cents per share, fully franked
- Borrowing capacity expanded to support ongoing organic growth
Strong Financial Momentum
Ashley Services Group Limited (ASX: ASH) has delivered a compelling set of results for the first half of fiscal 2026, showcasing a marked turnaround and growth trajectory. The company reported an EBITDA of $7.6 million, a 41% increase compared to the prior corresponding period, alongside a net profit after tax (NPAT) of $3.4 million, up 88%. Earnings per share also jumped 88% to 2.39 cents, reflecting improved operational efficiency and revenue expansion.
Revenue Growth Fueled by Sector Wins
Revenue climbed 15.8% to $308.2 million, driven primarily by the Labour Hire division, which saw a 16.1% increase to nearly $300 million. This growth was supported by new contract wins in the supply chain and retail sectors, as well as fresh projects in Victoria’s construction industry. The Training division also contributed, with revenues up 3.8%, benefiting from increased public funding for rail-related courses. Both divisions improved margins, reflecting successful cost controls and operational efficiencies.
Cash Flow and Balance Sheet Developments
Operating cash flow turned positive with an inflow of $0.8 million, a notable improvement from the previous year’s outflow, despite the typical seasonal rise in trade receivables. The company’s net debt increased slightly to $11.93 million, largely due to equipment financing for its traffic management business in Victoria. Net assets rose to $34.6 million, consistent with the reported profit. Importantly, Ashley Services expanded its borrowing capacity, increasing its invoice financing facility from $25 million to $35 million and adding a $5 million overdraft facility, positioning the group well to support ongoing organic growth.
Dividend and Strategic Outlook
Reflecting confidence in its financial health and future prospects, Ashley Services declared a fully franked interim dividend of 1.4 cents per share, up from 0.8 cents previously. The payout ratio was set at 60%, slightly reduced to bolster the balance sheet and fund growth initiatives. Managing Director Ross Shrimpton highlighted the company’s successful restructuring and margin improvement efforts over the past 18 months, which have helped it navigate external headwinds and position for sustained expansion.
Looking Ahead
With strengthened borrowing capacity and a focus on higher-margin sectors, Ashley Services appears poised to continue its upward trajectory. The company’s emphasis on executive retention through enhanced incentive plans signals a commitment to stability as it scales. Investors will be watching closely to see how these strategic moves translate into performance in the second half and beyond.
Bottom Line?
Ashley Services Group’s strong half-year results and strategic financial moves set the stage for continued growth amid evolving market conditions.
Questions in the middle?
- How will wage inflation and increased incentive provisions impact future margins?
- What are the prospects for further contract wins in the construction and supply chain sectors?
- How effectively can Ashley Services leverage its expanded borrowing capacity for growth?