Peoplein (ASX:PPE) outlined a strategic reshaping of the group during its first-half FY2026 results presentation, emphasizing a shift away from lower-growth operations and toward higher-growth end markets including infrastructure construction—particularly in Queensland—along with manufacturing, agriculture and food services.
Chief Executive Officer Ross Thompson said the company delivered AUD 16.1 million in earnings for the half, “in line with expectations,” noting the result included only five months of earnings from TechForce ahead of its divestment. With TechForce and the health and community division treated as divested businesses, management highlighted that the ongoing business produced AUD 10.5 million, which Thompson said was down on the prior year largely due to reduced PALM worker numbers.
Portfolio changes and divisional momentum
Chief Financial Officer Adam Leake added that the sale of TechForce and the health and community brands created “significant noise” in the published financial reports, and said management’s analysis was therefore focused on ongoing operations. Leake said the ongoing business showed “real positive forward momentum” driven by the group’s traditional engineering, trades and labor brands.
Leake reported that ongoing revenues were down 8.2% versus the prior corresponding period but flat compared to the prior half. He said higher build hours in engineering, trades and labor were offset by lower hours in food and agriculture, reflecting a reduction in PALM candidates during the prior year and into the half. He also said hours in food and agriculture began improving late in the half.
Pricing, costs and profitability measures
Across the business, Leake said billing rates continued to improve, up 5% versus the same period a year earlier, citing a scarcity of skilled labor and a shift toward more qualified roles. He also pointed to a favorable workers’ compensation experience, which he said reflected returns from prior investments.
Operating expenses were described as well controlled, with Leake stating costs were down 3.6% compared to the prior corresponding period. Post-divestments, he said the smaller group produced a 20.2% net revenue margin for the period, while reiterating the company’s goal of returning to a 25% net revenue margin.
Leake said lower debt reduced interest costs and that tax costs had been noisy, with expectations that they would return to normal ranges. He also noted amortization costs had reduced and were expected to reduce again in the second half before “falling quite significantly” in FY2027 and FY2028, prior to considering the effect of any new acquisitions.
On a per-share basis, Leake reported a AUD 0.046 normalized NPADA result, which he said was up 52.3% on the prior period for the half. For the entire group, normalized EBITDA including discontinued operations was AUD 16.1 million, up 15% on the last half and including only five months of TechForce.
Division-by-division performance
Leake detailed performance across three operating divisions:
- Engineering, trades and labor: Leake said the division recorded a significant improvement, up on the first half of FY2025 and up 131% from the prior half-year, driven by increased build hours and higher bill rates. He cited increased qualified trade roles linked to early-stage construction and development for Brisbane Olympics projects and higher infrastructure spending in the region, along with a rebound in areas previously hit by weaker discretionary spending. He also highlighted sharp gains in the hospitality brand Tribe (up 90.4%) and childhood education brand ExpectaStar (up 133%). Division costs were reported down 8.4% due to efficiency and productivity improvements.
- Food and agriculture: EBITDA was down versus the prior first half but up 8.4% compared to the prior half, according to Leake. Total PALM candidates were 4,100 as at December 2025, down from a peak in mid-2024, which he attributed primarily to visa processing delays in replacing departing workers. He said PALM candidates had stabilized in recent months and that improved conditions in Southern Australia, including the lifting of drought conditions, supported higher hours worked from November. Billing rates in the division rose 20% as clients sought PALM workers for critical food processing roles. Leake said visa processing issues were improving but that it would take months for growth in total PALM workers to return, adding that it was not expected to recover until 2027.
- Professional services: Normalized EBITDA declined 7.2% versus the prior period. Leake said market conditions showed a “noticeable change,” with returning confidence across contracting and permanent recruitment. Contracting hours were steady, with improvements late in the half across corporate services and IT contracting, and he said both government contracting and SME market contracting continued to improve. Permanent fees in services roles were 15% higher, which he linked to regulatory changes across the financial sector, aged care, and health and safety. Leake said the division reinvested in key talent and leadership during the half.
Cash flow, balance sheet actions, and acquisition plan
Leake said operational cash flow fell short of the company’s 80%–90% normalized cash collection-to-EBITDA target for the half. He attributed part of the shortfall to payroll timing, noting that with December 31 falling on a Wednesday payday, the half included 27 pay periods versus 26 previously, creating a temporary cash outflow to be collected in subsequent weeks. Even adjusting for this, he said collections would have been “in the 65% range,” still below target, while reaffirming the aim to achieve the 80%–90% target over the full year.
He also said the group made a strategic investment in accommodation in Southern New South Wales to support PALM candidates, which lifted capex, but he did not view this as an ongoing program. Leake said the increase in debtor days reflected period-end timing rather than a structural change, adding that debtor days in the ongoing business were about four days lower than the previously larger combined business.
On the balance sheet, Leake said divestments of TechForce and the health and community businesses delivered around AUD 49 million in cash proceeds. As at 31 December, net debt was AUD 14 million, including a cash balance of AUD 61.1 million. He said the company retained significant available debt funding lines for strategic acquisitions.
The board, he said, continued to pause dividends to preserve capacity for the acquisition announced and a “strong pipeline” of potential future acquisitions. Leake said over AUD 1.7 million of shares had been bought back on market to date, and reiterated the intention to continue the previously announced 6 million share buyback.
Incoming Managing Director Tom Reardon highlighted the group’s ambition to become the largest and most efficient workforce solutions provider across Australia and New Zealand, with a strategy focused on labor mobility and “an Asia-Pacific platform” that he said would be difficult for competitors to replicate. Reardon introduced Infrawork, a New Zealand specialist trade sourcing business serving infrastructure and construction through Extra Staff and Visa Hub, which he said included migration services to accelerate worker placements.
PeopleIN announced an agreement to acquire Infrawork for NZD 24 million at an initial 4.8x multiple, with anticipated earnings of NZD 5 million and an earn-out that could reduce the maximum multiple to 3.7x based on performance. Management said the deal was subject to customary conditions and expected completion in Q3 FY2026. Leake added that the acquisition would lift net debt to around 1.5x ongoing EBITDA, which he said remained well below covenant levels.
In Q&A, Reardon said PeopleIN does not currently supply PALM into New Zealand because it operates under a different visa type—access that Infrawork has—adding the combination could provide a pathway for PALM workers finishing 3–4-year visas in Australia to find opportunities in New Zealand. He also said Infrawork’s footprint could support access to skilled trades sourcing, including via the Philippines, and referenced the Trans-Tasman Agreement enabling labor movement between Australia and New Zealand. Reardon noted New Zealand had been slow recently and said PeopleIN was acquiring the business “at the very low of the market end.”
About Peoplein (ASX:PPE)
Peoplein Limited engages in the provision of workforce management, contracted staffing, recruitment, and human resources outsourcing service in Australia and New Zealand. The company operates through three segments: Industrial and Specialist Services, Professional Services, and Health and Community. It offers recruiting, on-boarding, contracting, rostering, timesheet management, payroll, and workplace health and safety management services. The company was formerly known as People Infrastructure Ltd and changed its name to Peoplein Limited in December 2021.
