Mitchell Services Posts 67% EBITDA Growth and Returns to Net Cash in FY26
Mitchell Services reported a robust FY26 with EBITDA up 67% and a net cash position of $3.5 million, driven by a shift towards gold projects and rising rig activity.
- FY26 EBITDA jumps 67% to $42.8 million
- Earnings before tax climbs to $20.8 million from $0.7 million
- Operating rig count bottoms out in April 2026, then rises
- Net cash position improves by 142% to $3.5 million
- Loop Decarbonisation drilling underway with positive early signs
Strong Financial Turnaround in FY26
Mitchell Services Limited (ASX:MSV) has posted a striking financial turnaround in FY26, with EBITDA soaring 67% to $42.8 million compared to FY25. Earnings before tax surged to $20.8 million, a dramatic leap from just $0.7 million the previous year. The company’s quarterly results for June 2026 also showed momentum, with revenue climbing 12% year-on-year to $56.5 million and quarterly EBITDA up 32% to $10.2 million at an 18% margin.
This performance marks a significant recovery following a transitional FY25, when the company faced a steep revenue decline from Queensland coal projects. Mitchell Services successfully pivoted its commodity exposure, with gold now accounting for 61% of FY26 revenue and coal 30%, reflecting a strategic shift that cushioned the impact of the coal downturn.
Rig Activity Rebounds After April Low
The operating rig count hit its nadir in April 2026, following the final expected demobilisation of coal rigs in Queensland. Since then, rig numbers have climbed steadily, closing FY26 with 65 rigs in operation. This rebound is underpinned by new contract awards and scope expansions across existing projects, setting a positive tone for FY27. Despite a slight dip in average rigs year-on-year; from 63.2 in FY25 to 61.5 in FY26; the company managed to increase shifts worked and revenue per rig, highlighting improved operational efficiency.
Balance Sheet Strength and Capital Discipline
Mitchell Services ended FY26 with a net cash position of $3.5 million, a remarkable turnaround from $8.4 million in net debt a year earlier. This was achieved through strong operating cash flows of $37.4 million, more than doubling the prior year’s figure, alongside disciplined capital expenditure of $21.3 million. The company’s balance sheet flexibility opens up options for growth investments or shareholder returns.
The Board is scheduled to meet in August to finalise FY26 financial statements and capital management plans. Given the robust cash flow and net cash position, a fully franked dividend distribution is expected, balancing shareholder returns with opportunities to capitalise on a growing project pipeline.
Progress in Loop Decarbonisation Business
Mitchell’s Loop Decarbonisation venture, aimed at mining sector emissions reduction, has moved into active drilling with its second customer contract. Early indications from this contract are positive, although it remains early days. Interest in Loop’s advisory services continues to build as asset owners face increasing regulatory pressures under safeguard mechanism legislation. This segment represents a strategic growth avenue aligned with broader decarbonisation trends in the mining industry.
Bottom Line?
Mitchell Services’ FY26 results reflect a successful pivot to gold and operational resilience, with a strengthening rig count and net cash position setting the stage for growth and shareholder returns in FY27.
Questions in the middle?
- Will rig count growth sustain momentum through FY27 amid evolving commodity demand?
- How will the Board balance dividend payouts with reinvestment in growth opportunities?
- Can Loop Decarbonisation scale beyond initial contracts to become a meaningful earnings contributor?
