MLG Oz (ASX:MLG) reported what management described as a strong first-half FY2026 result, highlighted by margin expansion, higher earnings and a return to dividends, according to comments made during the company’s results call.
Leadership on the call included acting CEO Mark Hatfield and CFO Phil Mirams, alongside Murray Leahy, who noted he had been on extended leave for personal circumstances and credited the management team and broader workforce for the half’s performance.
Financial performance: earnings outpaced revenue growth
The company also noted that a AUD 750,000 work health and safety infringement fine was recognized in the period and was “normalized” in pro forma reporting.
Leahy reiterated the company’s internal margin ambitions, saying MLG has historically referenced a 15% EBITDA margin target and views margins above 12% as sufficient to generate free cash to fund growth, strengthen the balance sheet, and resume dividends. He said the business has trended from around 10% EBITDA margin to roughly 13% over the last three years, with the most recent half cited at 12.8% and the company still targeting 15% over time.
Dividend returns as balance sheet strengthens
MLG declared a fully franked dividend, with management describing the result as a return to dividend payments. In Q&A, executives indicated the payout ratio was “roughly about 25%” and said future dividends would be assessed on a half-by-half basis and remain subject to board decisions.
Mirams said the balance sheet strengthened alongside improved operating performance. He pointed to a declining gearing ratio driven by rising profitability, while net debt remained relatively stable at about AUD 60 million (with net debt cited at AUD 61 million at the reporting date). He added that the company had “plenty of headroom” in its facilities.
On capital expenditure, Mirams said MLG spent about AUD 25.7 million in the half and remained on track for full-year CapEx of AUD 50 million to AUD 55 million. He noted the company was assessing whether to replace portions of hired fleet used on longer-term contracts or with high engine hours, which could increase CapEx next year if returns are attractive, though no decision had been made at the time of the call.
Mirams also said a portion of CapEx relates to workshop work extending fleet life, including major component change-outs such as engine rebuilds, rather than solely purchasing new equipment.
Operations: site services strength, weather impacts, and higher crushing utilization
Mirams said the strongest performance came from the site services and haulage business, as a portfolio of projects became more stable and delivered more consistent margins. He acknowledged operational disruption early in the half from heavy weather events in July and August, which constrained activity and lowered revenue while costs largely remained fixed. He said the business has invested in systems to mitigate downtime impacts, including improving fleet mobility and protecting fixed costs.
In Q&A, management provided additional color on the quarter-to-quarter dynamics within the half:
- Q1 was impacted by wet conditions.
- Q2 saw a recovery as haulage improved, and the company completed a large civil project (Castle Hill Road for Evolution).
- As civil work slowed in Q2, crushing activity picked up, with the run rate expected to continue into the second half.
Management said the second half is expected to be “in line” with the first half, with upside dependent on the timing of civil tenders and project approvals. The company noted some projects had experienced delays from both regulatory and principal approval processes.
On crushing, Leahy said MLG typically runs six or seven two- or three-stage crushing configurations across the business. At the start of the year, two were operating, and the half finished with five operating as longer-term deals were secured. Management said additional opportunities were being progressed for the second half, predominantly in the Goldfields, with some potential activity moving in and out of iron ore.
Market drivers: gold-led demand and emerging iron ore opportunities
Leahy described MLG as an integrated infrastructure support business, with activities spanning civil and mining, crushing and screening, bulk haulage and site services, and a construction materials division. He said the company’s model is built around supporting processing infrastructure—particularly in gold—by providing multiple services through a single contractual interface.
The company said it operates across 38 sites with a workforce of about 1,500, primarily in Western Australia, with some Northern Territory operations. Leahy said MLG’s growth has been underpinned by mid-tier Australian gold miners expanding into larger producers, supported by higher gold prices and volume growth. He also stated that since 2018, the business has achieved a compound annual growth rate of 32% and that “100% of that growth has been organic,” with no M&A-driven expansion.
Looking ahead, Leahy characterized the outlook as “bullish” but noted timing risk tied to project approvals and expansions. He said MLG expects underlying organic growth to continue, with additional upside as expansion capacity comes online over the next 12–18 months.
In iron ore, management said recent work on Rio Tinto’s Western Turner Syncline project was “highly successful,” and as a result MLG has been accredited as a tier one supplier and is seeing increased tender invitations. Leahy noted these are competitive tenders and approvals can take time, but said individual jobs can be sizable, citing typical revenue of around AUD 5–6 million per month per project.
“Moving up the value chain” and workforce conditions
Management also reiterated interest in “moving up the value chain” through opportunities tied to constrained gold processing capacity. In Q&A, Leahy said the company is not actively pursuing joint ventures for this and prefers to execute in its “own right” when the right asset and location are available. He emphasized MLG’s service-business approach, describing a fee-for-service processing model where geology risk remains with third parties and MLG is paid per tonne throughput.
On labor, management said conditions remain competitive. Hatfield said the company had invested in additional HR capability over the last six months and is working on its employee value proposition to improve attraction and retention, adding that retaining employees is key to managing labor inflation pressure.
About MLG Oz (ASX:MLG)
MLG Oz Limited provides mine site services in Western Australia and the Northern Territory. The company offers mine site and bulk haulage services, such as crusher feed, road and vehicle maintenance, machine and labor hire, and rehabilitation work, as well as mine site haulage services; and supplies construction materials, including sand, aggregate, cement, and lime for mining and civil projects. It also provides crushing and screening services comprising mobile and fixed plant crushing equipment, mine ore crushing, concrete aggregate production, road base production, and general screening services; and export logistics services, including mine to port transport, container packing and devanning, import receival and distribution, and shipping documentation services.
