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Lemaranta, Managing Director and CEO. Please go ahead.

Excellent. Thank you, and welcome everyone, and thank you for taking the time to dial into our results presentation. [indiscernible] If we just kick through, I'll just give a little bit of an overview on our business for those that might be joining the call for the first time. So Maxi Parts operates two operating divisions. The traditional Maxi Parts business, which is a commercial truck and trailer spare parts business. And Forche Australia, which is a workshop consumable business that we purchased in May 2023. Just briefly touching on the MaxiPARTS slide, MaxiPart is one of the leading distributor of both genuine and aftermarket parts for commercial vehicles in Australia.

We have 29 branches operating around Australia with then a number of on-site customer embedded operations. We also have one of the largest dedicated driveline rebuilding workshops in Western Australia. We have our own private brands in terms of MaxiPARTS XL as well as partner with a number of industry leading brands such as Castrol or Cummins as we move forward. [indiscernible] Quickly touching on the Forche background. As I said, Forche was a business we acquired in May 2023. It's a business that specializes in workshop consumables and offers us the ability to generate returns at a higher rate than the traditional MaxiPARTS business. When we bought it was predominantly Western Australian business with very little operations on the East Coast We The last eighteen months, we've been expanding those operations and successfully growing the business. So we do think it is a business that allows us to continue to deliver higher than traditional growth rates. And those growth rates will come in at higher than traditional EBITDA and profit margins. To drive an overall improvement in the group's profitability metrics. That business also has its three main warehouses in Melbourne, Perth, and Brisbane, which we believe is that long term ideal distribution network with an expanding infield sales team to drive that business forward. [indiscernible] If I then jump to the FY 2025 highlights page, and our progress so far this financial year.

As most people know, we we have had a ongoing legal dispute in relation to the sale of the trailer solutions business that we completed in September 2021. Pleasingly that dispute got resolved at the end of this half. And that resulted in a positive cash input as a result of the settlement elimination of construction and management time and certainly elimination of any ongoing legal Cost or litigation risk. The items on the right hand slide were the items that we outlined in our outlook statement at the full year presentation where we are operating in a difficult market, but our focus was going to be on improving revenue and improvement and as you'll see as we move forward that's certainly something that we've achieved. We want to drive balance sheet flexibility. Once again, you'll see in the detailed presentation strong cash flow, reduction in debt, driving an improved balance sheet flex We do have some system integration work linking into previous acquisitions of the independent path business. So that's got a in progress on. It's progressing well in line with what we expected. And it is only the ERP system integration work that is left with the rest of those business integration activities are all fully complete.

And the last one, as we talked about previously, the opportunity with Foresch. So we have targeted a higher growth out of that business and certainly the half year results demonstrate the importance and our ability to scale up that business as we move forward. If we jump to the next slide that leads us into some of the key financial metrics, which I'll touch on before Liz jumps into some of the more details. Around our P and L balance sheet and cash flow. But I guess these results we're very pleased with. They've been driven by a combination of strong continued organic growth programs coupled with well executed strategic acquisitions. That have allowed us to improve all of our key operating metrics and financial metrics in this financial year in what is still a very difficult market. Top line revenue growth of 22.6% year on year. I guess what is more pleasing to us is that revenue growth has then been coupled with margin improvement, whether it be at the EBITDA level net profit level, EBITDA margins hit the 10% mark, which is what is the metrics that we were looking to target early. And likewise, strong cash flow generation allowed us to further reduce our debt into a very conservative leverage position.

We did see some natural increases as a result of the profit improvement. Improvements in earnings per share of 36.3%. And a lift in the interim dividend to $0.035 which is 18.7% increase on the previous half. If we then jump to the next slide, and it's just, I guess, important to recognize We have been doing this over a number of periods now. So we've got consistent growth. At the revenue line, we've got consistent improvement in our EBITDA results as well as our EBITDA margins. And we've done that with a significant change in our revenue distribution model linking back to when we sold the business. So when we sold the the trailer business in September 2021, we had a large exposure to a revenue stream that was linked back into that business. That has now been effect completely removed from the business. But we've substituted with traditional higher margin business, which is been driving those improvements over time.

So with that, I'll hand over to Liz to talk through a bit more detail about the financial results.

Excellent. Thanks, Peter. Hello, everyone. Please take your through the HY25 financial results today. And hopefully, you'll agree the nice clean set of results for the period So just starting on the slide titled, FY 2025 financials. Revenue for the period of $136,900,000 was up 22.6%.

Over the prior period EBITDA was $13,700,000 was up $28,600,000 and it's Pete called out in the highlights, EBITDA percentage of 10% was a key metric that we've been targeting for the last few reporting periods. So very pleasing to get there and see 40 basis point increase over the prior period We have provided further information on the MaxiPaths operations and Fort Australia revenue and EBITDA results and highlights, which Pete will take you through shortly and we'll give you a little bit more flavor as to the product MaxiPARTS helped contributed to the margin improvement that we're seeing. Moving to the net profit before tax and amortization line item of profit of $6,800,000 up 29.2%. We have included the details and make up the depreciation and interest line items there for those interested in the breakout of those numbers. Net profit after tax for continued operations of $4,300,000 was up from $2,800,000 for the same half last year. And a reportable profit for the period of $3,800,000 was up by about $400,000 That encompasses the discontinued operations results which we've got full disclosures in the financial statements the makeup of those [indiscernible] The next slide being the balance sheet slide first item to call out, net working capital of $68,300,000 which consists of the inventory receivables and payables balances.

Is consistent period to period with seasonal increase in inventory offset by a reduction in receivables [indiscernible] Just called out the financial assets. So prior periods have had a $3,200,000 balance relating to the outstanding receivable that's now being dealt with dates with Sprider Group. As we've previously announced at the end of last year, we received $2,200,000 of funds which you'll see in the cash flow and the remaining balance of that receivable was impaired to discontinued off operations, but also offset with the balances of provisions to unused customer warranty and other provisions Draw your attention to the deferred tax asset for the group of $11,100,000 that includes $10,100,000 of income tax losses carried forward for future use. [indiscernible] And the final item to call out on the balance sheet, the financial liability of $1,200,000 for the estimated purchase price of the remaining 20% ownership stake in Forged Australia that we've bought to the account for the first time this half. The purchase of that stake is governed by the Put and Call option that can be exercised by either party. Within the two to five year window from acquisition date. Moving on to the cash flow side.

Gross operating cash flow of $12,000,000 for the period that resulted in a cash conversion rate of 88% for the half very comparable to the second half of FY 'twenty four at 90% so very pleasing results. The first half of FY 'twenty four had a conversion rate of 45%, which was sort of impacted by the timing of acquisitions in that half.

So again, a very pleasing result at 80% to 80% cash conversion for the half.

Just call out the cash inflow on this continue operation items that split across two line items in the cash flow So you'll see the proceeds from the legal settlement of $2,200,000 offset with outflows to the Queensland State Government. That was a provision that we'd held over at the end of FY 'twenty four and the legal fees incurred throughout the period. I'll draw your attention to the CapEx for the period. Of only $400,000 just reiterating that we are a capital light business.

Are expecting a small uptick in the CapEx spend for the second half.

Just flowing on from Peter's comments with regards to the system business system upgrades that are in progress at the moment. As well as some smaller site. Relocations. And the final item I'd like to call out on the cash flow is the 4,500,000.0 repayment of borrowings, for the period that consisted of us paying down $1,000,000 in line with the amortization rates of our facilities as well as a $3,500,000 payout of drawn debt through the use of our free cash flow generated for the period. We'll move to the next slide, being the capital management again just reiterating on our debt funding. The group where it was total borrowing facilities at the end of the half of $28,500,000 which is drawn to $25,000,000 and our current leverage ratio of 0.4 times is well within the group's capital management targets.

For dividends, we've got a fully franked interim dividend at $3.05 per share declared to be paid on the 03/20/2025. Dividend reinvestment plan remains available And that will be at a new discount to the market price Post this dividend payment will have franking credits of 3.9 remaining within the group. And the final item to call out With regards to the Forest Australia 20% minority stake, $1,200,000 financial liability that we've recorded The exercise with the option opened in June of this coming year, so June 25 and it is considered likely that the option will be triggered inside the next twelve months. The purchase would be cash funded either through obviously cash on hand or undrawn existing borrowing facilities. On that note, I'll hand back to Peter to take you through business unit.

Updates.

If we jump to the the MaxiPARTS part slide, we'll talk through the market highlights and focus areas, but really what we're seeing in this particular business unit is the benefit from the strategic acquisitions that we've made either through the Truxion acquisition in 2022 or the independent part acquisition in December 2023, combining with a continued focus on organic programs to offset the softer market and economy particularly on the East Coast. In terms of market, as we talked about, we do see quite a difference between the East Coast and West Coast Of Australia at the moment. The East Coast being significantly weaker and subdued on the back of generally economy impacting the freight task. Western Australian market which links into the strategic acquisition of independent parts has continued to remain robust and has delivered growth through the period at a higher rate than the East Coast. We are still seeing fairly competitive pricing in certain sectors certainly some of the larger customers that is a challenge to maintaining margins or has been a challenge to maintaining margins over the last twelve months. In terms of highlights for the MaxiPARTS business, as we did talk about a number of the part of the revenue growth is driven by timing of the acquisitions, but if we strip all that back out and look at a real like for like revenue growth number for the underlying MaxiPARTS business, so underlying being excluding sales to the previously owned trailer business, including the independent MaxiPARTS sites that we picked up.

We saw a 4% year on year growth rate through that business. The Japanese MaxiPARTS program was an out of the Trux Zone acquisition we completed in February 2022 and has been a continued focus and higher growth rate for us. It's a product range that comes through at traditionally higher profit margins then the traditional 20% period on period growth rate out of that program as well. We have seen growth from the acquired independent parts business that growth has come through both the sites we acquired as well as the embedded operations. So Once again, not relying on a single distribution revenue stream, through there. The growth has become across both of those different distribution avenues. We have seen key expansion of key customers that we picked up by the Independent Parts acquisition starting to drive benefits through the non independent part sites. So the East Coast business certainly through Central Queensland and Northern Queensland and we do see further opportunity for that to continue to add value in future periods. And once again, the cycle back pleasing to see the EBITDA margins improve. Despite the challenging East Coast market.

Terms of focus areas for the MaxiPARTS business, we will continue to focus on growing the Japanese range at accelerated rates. We will look at network expansion, particularly in key regional sites where we think there's some growth opportunity. We remain active in terms of our inventory and working capital management, particularly on the East Coast where we do see some subdued volumes.

We do have the completion of our business system upgrade and database consolidation. So to put that into perspective, we're currently in UAT testing for the upgrade of the East Coast database an upgrade, it's not a new system and an upgrade in line with the version of our ERP system that is in place in Western Australia. So it's not new, it's not unknown. It's an upgrade is currently going through testing. That's expected to go live the coming weeks. For those that remember, we did put the traditional MaxiPARTS business and the independent parts business onto a common ERP platform in West Australia at the start of last calendar year as part of our acquisition that's allowed transaction efficiency It's also meant that we've completed a bulk of the data analysis and integration work that is one of the key challenges in integrations of our business. So once we get the East Coast up upgrade, we will then bring the West Coast on and be on a once again a national ERP platform for the MaxiPARTS business. Just to reiterate, all the other integration act activities in relation to the independent parts business were completed probably about six months ago.

And we'll continue to look at key account acquisition and management within the MaxiPARTS business. If we then jump through to the slide on Force Australia, once again, I guess as a bit of a highlight, this particular business unit is delivering high growth rates and improved financial returns. The market that operates in is very similar MaxiPARTS. The West Coast is stronger than the East Coast. So slightly different in terms of market impact we see as being [indiscernible] lower impact on the forged business as a result of starting from such a smaller immature business. So therefore, the ability to gain market share It's a smaller spend per customer. So therefore, slightly less price sensitive than the traditional MaxiPARTS business. And we've also seen very strong customer desire for those larger customers that are looking for a new larger national alternatives compared to what they might have had previously in the marketplace. Highlights for that business. Similar to MaxiPARTS, we've gone and adjusted out for the impact of the Forsch Brusbane acquisition that was completed in December 2023. And that results in a 16% like for like revenue growth half '1 versus prior comparative period.

We are still seeing strong multi site customer solution implementations as well as ongoing strong leads in that particular space. The national sales team that we invested heavily in twelve months ago you're starting to mature and starting to drive revenue growth and that revenue growth is coming through both the East And West Coast regions.

For the Forche business.

We did invest in upgrading the an e com business to B2Cecom facility, which was just as much about starting to improve brand recognition for the Porsche business on a national basis as well as generating income, but that is a new distribution channel that we would expect to continue to grow as we move forward. As mentioned earlier, with the increased revenue and a more consistent cost base, we are seeing that the operating leverage is starting to come through with EBITDA margins back up at 13% for the period. And once again, ahead of the traditional MaxiPARTS business helping us drive that entry into double digit EBITDA results for the group. Cash flow for Foresch we did invest fairly heavily in inventory we first bought the business the last six months. We managed to keep our inventory level stable. Despite the 16% growth. So that has driven a strong cash conversion out of the forged business as we move forward.

Focus areas for the Porsche business.

Continuing to get efficiency and maturity out of the sales team that we invested in twelve months ago. We do expect to maintain higher growth rates and they will come through further multi site customer wins, existing customer sales growth and range extension and some territory expansion as we leverage off some of the earlier larger customers that might have allowed us to enter particular markets where we haven't operated previously. We'll continue to build on the brand awareness through our digital marketing and social media strategy And as Liz mentioned, we do expect to see 20% minority holding acquired within the next twelve months. If we jump through to the outlook, very similar to what we communicated at the end of the last financial year. We do see ourselves operating in a period of heightened heightened unpredictability due to both global events and weaker domestic economy. That has seen East Coast Of Australia slowdown and soften in the transport activity. We are still seeing Western Australia operate in a strong basis. At this point in time, we expect those trends to continue through the second half. Of financial twenty twenty five. Likewise, we remain committed to our organic program.

So we expect to continue to see revenue and margin improvement from our organic activities. Continue to drive balance sheet flexibility to allow us to respond as well as have an capital. Active capital management plan moving forward.

We will finalize the integration work and get the systems back onto a common ERP platform And once again, Force remains a continued area of investment and revenue and profit growth that we expect to come through for a number of different periods. We believe by doing that similar to what we're seeing in half one of this year, we'll continue to deliver strength and financial metrics. At an EBITDA and EBIT level as well as return on invested capital. Pass back to the administrator and open it up for any questions.

The first question comes from James Casey with Good morning. Just a couple of questions from me.

Just in terms of the outlook I guess you've come up with a fairly conservative outlook, which I guess is prudent. Just over reporting season, and in particular in recent days, I guess we've started to see some improvement from companies and some companies calling out some green shoots in Victoria. Peter, are you starting to see any of that kind of materialize, specifically on the East Coast?

Look, thanks, James. Look, to be honest, at this time of year, The variability that comes through holiday periods come customer closure, weather events, we don't we certainly don't see it fundamentally declining. We probably think it's a bit too early for us to turn around and say we expect the slowdown that we saw last year to suddenly materialize, but look, we certainly are hopeful that the recent interest rate reductions drive some economic activity and that will ultimately flow through to transport movements and therefore spare parts businesses. So certainly think it's a timing event of when things improve, whether that improves quickly or whether it flows in the next financial year. I think we'll see over the next couple of weeks and months Yes. Okay, fair enough. Just with the fourth business, You called out comp growth of 16%, which is really good growth. [indiscernible] sort of outside of the next six months, maybe looking more to the medium term. I know you've invested heavily in sales staff, but where would you see the medium term growth of that business kind of level out would still be double digit or you expect it to kind of come back to single digit type growth maybe over the next three years, for instance, Yes.

Look, we're certainly thinking that short to medium term, it will remain in that double digit level. If we go back to one of those original slides and I guess put the opportunity into perspective, the Forch business this year will be sitting at about $20,000,000 or just over $20,000,000 worth of revenue, certainly the market leader in that space is well north of $175,000,000 We will start to feed in some investment back into the sales team, but that investment will be a lot more staggered and traditional than what we originally did when we bought the business. But we think a combination of expansion of that sales team, continued rollout of key customers, growth into regions where the business is traditionally not serviced will certainly allow us to continue to generate those sort of double digit revenue growth rates for multiple periods to come.

Yes. Okay. And then just finally, you did comment On the competitive pricing, which went back to your previous trading update. Is that competitive pricing issue still well and truly in the market in the second half? Or is that kind of eased off now?

No, it's still in the market. As we sit here today.

Yes. Okay. Thanks, Peter. Thanks James.

The next question comes from Jason Palmer Taylor Collision.

Yes, thanks. Good morning, Peter and Liz. Just going on from James' question.

Around the challenging pricing environment. If you want to quantify what you thought that margin impact was to the business, what What would that be?

With how we participate probably less than 1%, about 1% overall. Now we have been selective in where we match and what we do with margins. We aren't interested in chasing the market to the bottom level.

Certainly where we've got key accounts and and relationships we're relying on our service and traditional relationships to not have to match every price gets thrown through and there's certainly been some particular pricing out there that we've chosen not to match, which might have taken a little bit off the top line revenue, but we certainly think maintaining pricing discipline in the short term will give us benefits as we flow into the medium and longer term and things stabilize.

Yes. Is that because the customers then get reset to a new price? Or I mean, Or is it that don't have the systems to kind of move up and down We've got the systems move up and down, but like everyone, once you reset a customer price, the customer gets attached to that price. And [indiscernible] Customer and the next customer. So we look to try to have a fairly structured and stable pricing matrix across all of our customer base. So certainly adapt and make minor changes, but Thank you. [indiscernible] overly aggressive and chasing volume for the sake of volume isn't in the best interest of [indiscernible] Yes. And just managing inventory, obviously, that converts to cash flow, but these are [indiscernible] Not capital intensive business. They're working capital intensive businesses and the inventory to sales come back I don't know whether that's good or bad, but from a growth perspective, obviously, it impacts the potential near term around availability of inventory How would you unpack the comment around potential stock outs if you if you run your inventory too tight. I guess to go back, we can see it a good story, James.

We're not putting our business at risk of stock outs. We actively manage our inventory on a national and price level. So we have continued to invest in areas and product ranges and branches where we are seeing high growth potential, we've been very aggressive at making sure we offset that and pulling back inventory in a market or a branch that might have had a decline etcetera. So on an overall basis, it has bounced out. On a product range or a specific branch basis. We have seen investment where we think we need to. We haven't seen any fundamental change in our full rate for service levels as we've been working through that changing dynamic.

Yes, that's wonderful. And how does the ERP integration finalizing change any of that consideration around around inventory, around management of the wider group, around further savings potentially in back office. [indiscernible] inventory, it doesn't change. So it makes it easier to manage. It doesn't change how we manage it. So there's probably been a few manual steps putting in there. But in terms of how we assess inventory across both systems, We do that today. It will just be a little bit easier to do once it's on a single system. As I said in terms of transactional ability of Western Australian business that being on that same system Potentially, we do expect to get some minor back end staffing benefits. It might be one heading accounts, etcetera. It's not a dramatic change, but there will be a minor benefit once we move through that. System consolidation.

The next question comes from Lauren Ash Ashley DeFries with Good day, guys. And can you get the full name in there?

Just seeing with a view to margin, just where we're sort of sitting with caution in terms of its potential margin going forward. I think when you first put it, there was an aspiration to get that to 20%. Is that that still reasonable? Or is that slightly slightly aggressive now? We'll continue to benefit as we scale up that business one. So we've got it's very different model to Maxi parts in that got three warehouses in place. Those three warehouses are sufficient to support the business on a national basis. So your investment tends to come through direct transacting sales team. Those sales team work on a a high commission basis, a low base. So once they get through that initial period, strong drop through and the gross profit margins are higher. So certainly heading towards 2020, that 1520 range in the medium term is probably where we see it sitting. We'll continue to look at leveraging and expanding that business as we go forward. So there will be ongoing improvements We do expect certainly that growth rate as we said before to be double digits. So with the higher margins and the double digit quickly drives some improvements in the overall group.

And I think you said Porsche will be should deliver around 20 mill for '25, was it? [indiscernible] Probably, yes, probably just north of that, yes. North of 2020 and then grow at a double digit sort of top line for foreseeable future as you as you sort of penetrate, yes? [indiscernible] is that through the full network at this stage?

Yes.

Look, it's through the full network. So certainly in the last twelve months, we had the project of rolling the program back out [indiscernible] By nature of maturity of the product range, those particular sites are still at the lower end of the maturity curve and have a higher opportunity to growth, but we are seeing consistent and successful growth through the network. We continue to adjust the inventory holdings on a site basis to make sure we continue to support and grow that business. So a bit like Porsche, we do expect the growth rates from Japanese to continue at higher than the traditional MaxiPARTS business certainly for a number of periods. So that was made strong growth it's not an instant, click the fingers and it comes in. So we do see that to come through multiple periods as we move forward. And that I think you said 20% against the prior period. Is that 20% half or PCP number again, something that's achievable in the next twelve to twenty four months as you sort of coming off of a base situation? Yes. Look, it does get challenging obviously as it continues to grow. Yes, of course. [indiscernible] yes, certainly whether it's big change to 20% would certainly be OXP [indiscernible] [indiscernible] Yes.

And the IT the residual ATSG business, is that I think that at some point just rolls into normal gross margins and normal pricing, no specialized offering there. Yes, as we flagged that distribution agreement came to an end in August 2000?

August, yes. 2024.

There was a level of revenue that came through in that probably about $1,700,000 in the first half. The revenue stream after that has become immaterial to the business.

And what is left is reverted to traditional Mackie parts pricing. So the low margin revenue stream converts to a lower revenue stream, but at normal margins and would just be considered normal business as we move forward.

Is that taking place already or is that still to come? That took place in at the August, sorry. August, I see. Good one. At that point.

Yes. Good, good. All right. Thanks, guys. Good numbers. Thanks, Warren. We have a follow-up question from Jason Palmer with Taylor Collision.

Yes, thanks. Sorry. I just have one more around embedded operations. You made a comment at the end of FY twenty [indiscernible] that you had some expansion in better on-site operations with key customers.

Across both WA and the East Coast. I'm just curious whether that sort of flowed into the into the first half or whether there's still upside from major projects in the second half?

Look, there certainly was a level of fly through in the the first half.

That is still an ongoing process. So Yes, there probably was just $100,000,000 worth of revenue flowed through into the first half, we are continuing to work on different sites and different opportunities with a number of those customers that we would expect to drive further growth into both the second half, the nature of them, they do take a while to set up, but certainly a little bit into the second half and certainly into the next financial year, we would expect it to be a more material lift Okay. Thank you. And just one more. Around the cost management, which has been really impressive. Over the last twelve months, At what point what top line sales do you need to see in the underlying MaxiPARTS business before you start to uncheck all the cost growth of the business and really invest behind it. I know it's a bit of a not really a loaded question, but just to understand sort of how you think about that [indiscernible] Look, we think about it and adjusted every day and we do that every day on every side different projects. So although we have as you pointed out and we also agree, we think we've done a very good job of managing cost in difficult market time with high inflation.

That hasn't stopped us investing in the business where we're seeing growth. Particularly our Western Australian operations that are operating at a high level. Has seen growth, whether that be into the acquired independent parts stores in terms of [indiscernible] or general staffing across, we'll continue to do the same with Porsche. We'll expect it to be a bit more [indiscernible] we are investing in the business. We are just being quite aggressive at making sure we pull costs out in a branch or a function that might not have the exit six to twelve months ago.

So will continue to do that. We would hope to I guess, maintain the the expense versus revenue type leverages as we move forward. So we're not expecting to see a step change in increase in expenses. Likewise, we don't think there's a step change down. We'll more continue to manage on a day to day basis.

Yes, wonderful. And thanks for the claims that numbers. That was good.

There are no further questions at this time. I will now hand the call back over to Mr. Lloyd Maranto.

Excellent. Thank you. Once again, thank you all for making the time We appreciate the questions and the interests. I guess just to recap, we are pleased with the results. We do still think operating in a challenging market, but it's really pleasing to see benefits coming from both the strategic acquisitions and the organic growth programs that we have in place. We expect those to continue to deliver benefits as we move forward and certainly, I guess, like most businesses operating today, we do expect or do hope to see some market improvement that will allow those benefits to accelerate as we move forward. Once again, thank you all for your time and enjoy your day.

That does conclude our conference for today. Thank you for participating. You may now disconnect. Your participation in the conference has been terminated by the host. Good