Mastermyne Group Limited reported a rebound in earnings and cash generation in the first half of FY2026 as the underground coal mining services contractor worked through disruptions that weighed on FY2025 activity levels. Management highlighted improved margins, a sharply higher order book, and new FY2026 guidance, while also pointing to ongoing risks tied to coal price movements and uncertainty around Anglo American’s steelmaking coal business sale process.
First-half financial results show earnings rebound despite lower revenue versus prior year
Managing Director and CEO Jeff Whiteman said the company delivered growth in earnings, net cash, and the order book during the half, although revenue was lower than the prior comparable period due to external events. For the six months ended 31 December, the company reported:
- Underlying EBITDA of AUD 8.3 million, up 5% versus the prior comparable period, and 41% higher than the second half of FY2025
- Underlying NPAT of AUD 4.1 million, more than double the prior comparable period
- Net cash of AUD 33.1 million at 31 December, an increase of AUD 4 million over the half
- Order book of AUD 441 million, up 79%
Cash, liquidity, and dividend decision
Ruhl said the earnings recovery translated into improved cash generation. Net operating cash flow was AUD 5.5 million in the first half, despite a AUD 1.6 million working capital increase to support higher activity levels. Cash at period end was cited at AUD 34.1 million on the cash flow slide, while net cash was reported as AUD 33.1 million on the balance sheet.
The company ended the half with minimal debt and up to AUD 40 million of undrawn facilities, according to management. Net tangible assets increased to AUD 64.8 million, equivalent to AUD 0.21 per share, including AUD 0.11 per share in cash.
On capital management, Ruhl said that while the company paid a franked dividend in FY2025, the board declared a nil final dividend for the first half, describing it as a strategic decision intended to build capital to support organic and inorganic growth strategies. The board will continue to assess the position, he said.
In response to a webcast question about interest income, Ruhl said approximately 70% of the company’s AUD 34 million cash balance was held in short-term deposits. He added that interest income was earned in the half, contrasting with prior halves where interest was an expense, and noted that term deposit income was offset by debt on some equipment and leased equipment from an accounting perspective.
Operations: Appin mobilization, contract extensions, and demand for strata services
Whiteman said FY2025 was adversely impacted by reduced activity following separate ignition events at the Grosvenor and Moranbah North mines, with the second half of FY2025 most affected. He said the company navigated these challenges through cost management and diversification, and that the first half of FY2026 showed a return to revenue growth and improved margins.
Operationally, Whiteman highlighted mobilization of the new Appin project, with more than 200 roles filled. He said this helped drive a 17% increase in revenue compared with the second half of FY2025. Addressing a question about mobilization impacts, Whiteman said there were no material negative mobilization costs, as the company handled the ramp-up through existing support teams, and that the primary impact was positive because the project was mobilized quickly and contributed revenue for “pretty much the whole first half.”
Management said order book growth was driven by the Appin contract signed mid-last year, a six-month extension of Anglo contracts through April 2026, and new contracts with Yancoal and Glencore. Whiteman also disclosed that after period end the company received a letter of intent from Anglo relating to a further 12-month extension through to April 2027, which he said would take the contract beyond the completion of Anglo’s current sale process. He emphasized that the expected extension is included in the pipeline figure, not the order book at this stage.
Asked what the extension would mean for the order book if signed, Whiteman said that at the current level of activity it would be “around about AUD 60 million,” putting the total order book “around the AUD 500 million” level, with potential upside depending on activity levels. He added that the restriction on production at Moranbah North was lifted a couple of weeks prior to the call and said Anglo planned to return the mine to full production over coming months.
Whiteman also said the half ended with a high level of demand for strata consolidation services, with activity continuing into the current period.
Strategy, safety update, and acquisition approach
Management said the company is focused on organic growth and strategic acquisitions, supported by liquidity and its major shareholder. Whiteman noted that M Mining, a member of the M Resources Group, remains the company’s largest shareholder with 54% following a May 2023 placement.
On acquisition criteria, Whiteman said the company is considering opportunities at two levels: businesses with adjacent capabilities and tangible synergies with existing operations, and potentially larger, more transformative businesses that align with company strengths while diversifying away from the existing business. He said Mastermyne applies a disciplined approach to capital deployment and considers metrics including margins, return on capital employed, and prudent gearing levels.
On competition, Whiteman said competitive intensity varies across the company’s five capability areas. He said the company’s growth strategy aims to shift mix toward higher-margin areas, including products, safety innovations, and technology solutions, while noting that the labor hire market is “quite competitive” and mentioning the impact of “Same Job, Same Pay” legislation.
On safety, Whiteman said the company has implemented a multi-faceted safety performance project over the past 2.5 years, reporting significant improvement in safety metrics. During the half, Mastermyne recorded 12 months recordable injury-free across Queensland projects. He said TRIFR had since “tempered slightly,” but that the all-incident frequency rate remained lower, injury severity remained low, and there were zero life-changing events in the period.
He also updated the market on prosecutions relating to two serious incidents in 2021 and 2022, including a “tragic incident” at Crinum Mine. Whiteman said the Crinum matter was listed for a jury trial in March and that the company was defending its position. He added that insurance in place at the time provided some mitigation on costs, including partial coverage of legal costs incurred to date.
Outlook and FY2026 guidance
Management said the outlook for the remainder of FY2026 and into FY2027 is positive, citing the AUD 441 million order book and an AUD 1 billion pipeline. Whiteman said the company is exploring organic growth and acquisition opportunities and described having a supportive long-term shareholder with a strong network. He also flagged risks including potential coal price fluctuations and uncertainty arising from Anglo American’s steelmaking coal business sale process.
Mastermyne initiated FY2026 guidance of AUD 220 million to AUD 230 million in expected revenue and underlying EBITDA of AUD 17 million to AUD 18 million.
About Metarock Group (ASX:MYE)
Metarock Group Limited provides mining, contracting, training, and related services to the underground long wall coal mining operations and industrial products and services in coalfields and supporting industries in Australia. It offers various mining services, which include new mine development, mine operation, training, roadway construction, ventilation, conveyors, longwall relocations, and application of polymeric strata support. The company also provides cable hanging bracket; chemicals products, which include geosorb, quick drive cement, road salt, and safemark paint; conveyor consumables; and dewatering products such as snorebox, strainers, and suction strainer.
