Mitchell Services Posts 67% EBITDA Growth and Returns to Net Cash in FY26

Financial Performance Surges Amid Strategic Pivot

Mitchell Services Limited (ASX:MSV) delivered a standout FY26, reporting a 67% increase in EBITDA to A$42.8 million on revenue of A$207.4 million, up 5% from the previous year. Profit after tax surged 2,732% to A$15.2 million, or 7.2 cents per share, reversing a modest A$0.5 million profit in FY25. The company’s EBITDA margin expanded sharply to 20.7%, up from 13.1%, driven by improved operating conditions and a more favourable commodity mix.

Operating cash flow more than doubled to A$37.4 million, enabling the group to return to a net cash position of A$3.5 million at 30 June 2026, a significant turnaround from net debt of A$8.4 million a year earlier. This robust cash generation supported a fully franked final dividend of 2 cents per share, bringing total FY26 dividends to 6 cents per share, representing an 11% yield on the recent share price.

Operational Leverage With Rig Fleet Capacity

The company operated an average of 61.5 rigs from a fleet of approximately 90, slightly down from 63.2 in FY25, yet delivered materially stronger results. The operating rig count bottomed at 59 in April 2026 following the exit from Queensland coal projects but rebounded to 65 by year-end, with further increases expected in FY27. This underutilisation of the fleet provides significant operational leverage should demand continue to strengthen, especially in the metalliferous sector.

Gold now accounts for approximately 61% of revenue, up from 47% the prior year, while coal’s contribution declined to around 30%. This shift reflects the company’s strategic pivot away from Queensland coal and towards higher-value metalliferous projects, including expanding operations in Victoria, New South Wales, Northern Territory, and Papua New Guinea.

Capital Management and Growth Initiatives

Since late FY22, Mitchell Services has redeployed about A$77 million in capital through debt reduction and shareholder returns, including dividends and share buy-backs, equating to roughly 30% of the company’s market capitalisation. The balance sheet strength and disciplined capital expenditure, largely maintenance-focused at A$18.9 million in FY26, position the company well for growth opportunities without the need for equity raising.

Mitchell Services also continues to develop Loop Decarbonisation Solutions, a 50/50 joint venture with Talisman Partners focused on mining sector emissions reduction. Sumitomo Corporation’s strategic investment in Loop during FY26 valued the business at around A$24 million and provides a capital-light platform for growth. Loop has progressed from advisory work to in-field operations, with the second customer contract underway.

Safety and Leadership Stability

Safety remains a core focus, with the company maintaining its critical risk management program amid headcount and rig count growth. Leadership continuity under Executive Chairman Nathan Mitchell and CEO Andrew Elf has supported the company’s operational and strategic execution. The board remains committed to capital discipline, margin improvement, and shareholder returns.

Looking ahead, Mitchell Services enters FY27 with momentum, a diversified revenue base, and a strong balance sheet offering flexibility to capitalise on an increasing pipeline of drilling opportunities, particularly in the gold sector. The company’s operational leverage and strategic initiatives suggest potential for further earnings growth as rig utilisation rises.

While cost pressures and labour market tightness require ongoing management, Mitchell Services’ FY26 results demonstrate the financial strength and strategic positioning to navigate these challenges.