Emeco caps FY26 with earnings growth and a 10% share buy-back
In its FY26 full-year results for the period ending 30 June 2026, Emeco Holdings delivered earnings growth, strong cash generation and further deleveraging, while its Board separately approved a fresh on-market share buy-back of up to 10% of shares on issue.
The equipment rental and mining services provider recorded Operating NPAT of $89.0 million (up 5%) on Group Revenue of $792.8 million (up 1%). Net leverage closed the year at 0.43x, well below the Company’s target range.
The combination underscores a resilient, cash-generative model that funded both growth and shareholder returns across the period.
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FY26 financial results at a glance
Emeco reported broadly intact margins despite second-half headwinds, including wet weather in Queensland and geopolitically driven supply and cost challenges affecting the mining sector. Growth in maintenance services, particularly on-site maintenance through the rental segment, supported the top line.
The FY26 result extends six consecutive halves of earnings growth, a streak that reflects embedded operational discipline across rental utilisation cycles rather than a single-period uplift.
Key financial outcomes for the year included:
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Group Revenue of $792.8 million (up 1% vs FY25)
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Operating EBIT of $148.0 million (up 2%)
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Operating NPAT of $89.0 million (up 5%)
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Statutory NPAT of $76.7 million (up 2%), delivering EPS of 14.8 cents
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Operating EBIT margin of 18.7%
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Return on Capital of 16.9% (up 30bps)
| $m (unless stated) | FY25 | 1H26 | 2H26 | FY26 | Change |
|---|---|---|---|---|---|
| Revenue | 785.4 | 420.8 | 372.0 | 792.8 | +1% |
| Operating EBITDA | 301.1 | 155.8 | 136.7 | 292.5 | (3%) |
| Operating EBIT | 145.7 | 77.0 | 71.0 | 148.0 | +2% |
| Operating NPAT | 84.5 | 46.5 | 42.5 | 89.0 | +5% |
| Statutory NPAT | 75.1 | 38.7 | 38.0 | 76.7 | +2% |
| Return on Capital | 16.6% | 17.8% | – | 16.9% | +30bps |
Operating NPAT excluded one-off items of $12.3 million after tax, comprising ERP implementation costs of $8.6 million (pre-tax), restructuring costs of $1.3 million (pre-tax) and defence costs of $3.5 million (pre-tax).
What drove the result — rental, Force and technology
Rental segment powers on-site maintenance growth
The core rental business delivered a 4% increase in revenue to $637.0 million, driven by on-site maintenance services that grew 44% year-on-year. Demand remained strong across gold, iron ore and coal, particularly in the first half.
Surface fleet gross utilisation averaged 82% for the year, with underground utilisation at 67%. Rental Operating EBIT improved 2% to $183.9 million, supported by a high proportion of variable costs that allowed the business to adjust its cost base quickly as revenue shifted.
Force builds rebuild capability and a battery-electric edge
Force, which provides equipment and component rebuild capability, delivered total revenue of $276.8 million, up 1% on FY25. Internal revenue rose 17% to $121.0 million, while external revenue declined 8% to $155.8 million as capacity was directed toward internal rebuild works.
The business completed 143 major machine rebuilds and 983 component rebuilds during the year, compared with 137 and 996 respectively in FY25.
In FY27, the Fortescue and XCMG program is expected to commence with the delivery of four battery electric prototype assets for testing and support trials, assisted by the Force maintenance service team. Fortescue is set to increase this to a total of 110 assets by early 2029.
In preparation, Force has upskilled 14 personnel in high voltage mobile plant and battery electric vehicle training, targeting 60 to 70 trained technicians by 2029. The Company noted this provides Force with a first-mover advantage in battery electric services and positions the business to support Chinese OEMs within the Australian mining industry.
Technology investment building future uptime
Emeco advanced the build of its new ERP system, Microsoft Dynamics 365, which is now in final testing with rollout targeted for late CY2026. The Company also reported in-house telemetry across more than 200 machines, combined with AI-enabled reliability solutions, alongside its proprietary Emeco Operating System (EOS).
These technology investments, while modest in capital cost, are expected to improve fleet uptime and maintenance optimisation in future years.
Understanding Emeco’s mid-life equipment rental model
Emeco rents out maintained mid-life mining equipment rather than selling new machines. This lets miners access flexible, capital-efficient fleet solutions without committing heavy upfront capital to owning and maintaining their own equipment.
Low-capital maintenance services, such as on-site maintenance, allow Emeco to lift returns without significant capital expenditure. This supports what the Company describes as a circular, capital-efficient asset model, helping to sustain a higher Return on Capital.
This shift in earnings composition, with a higher contribution from low-capital maintenance services, is why margins moved slightly while ROC improved during the year.
Balance sheet strength funds the buy-back
On 19 August 2026, the Board resolved to undertake an on-market share buy-back of up to 10% of ordinary shares, being a maximum of 51,837,475 shares, over a 12-month period. The decision follows a year of strong cash generation and further balance sheet strengthening.
Key balance sheet and cash flow metrics included:
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Adjusted operating free cash flow of $114.5 million, with cash conversion of 108%
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Net debt of $127.1 million and net leverage of 0.43x, below the target range of 0.5x to 1.0x
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Liquidity of approximately $315 million, supported by a $355 million debt facility maturing December 2030, with $190 million undrawn
The Board believes repurchasing shares at current trading levels represents an attractive deployment of capital and is expected to enhance earnings per share and return on capital, while retaining flexibility for growth and potential acquisition opportunities.
Cash interest paid exceeded interest expense for the period following the early redemption of Medium-Term Notes and higher-frequency debt rollovers, which the Company expects to normalise in future reporting periods.
CEO Commentary
“This financial year demonstrates that we have built a resilient, cash-generative business capable of delivering strong earnings. We have set up a solid platform for growth, and this is evidenced in the expansion of our maintenance service business. Our strong balance sheet provides flexibility to pursue growth opportunities including sector consolidation and to invest free cash in our share buy-back, delivering a high-return use of balance sheet capacity,” said Ian Testrow, CEO and Managing Director.
FY27 outlook and the path to a 20% ROC target
Emeco guided that FY27 earnings are expected to be in line with FY26, with a weighting to the second half. Approximately 80% of rental revenue is locked in, and a new project pipeline is forecast to drive increased utilisation.
Forward guidance disclosed by the Company included:
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Utilisation forecast to reach approximately 90% for surface and 80% for underground by the end of FY27
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Capex of circa $155 to 165 million net of asset disposals
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ERP spend of approximately $5 million and depreciation of circa $145 to 150 million
In FY28, the Company expects the utilisation run rate to deliver earnings growth in line with its 20% Return on Capital target.
The Testrow contract extension to 2031 aligns management incentives directly with that multi-year roadmap, with equity vesting tied to the release of FY31 full-year results and total incentive participation capped at 300% of fixed remuneration.
Strategic priorities for the period ahead centre on expanding the maintenance service platform, continued deleveraging, and pursuing opportunistic sector consolidation. FY26 also marked the completion of Emeco’s first mandatory climate-related disclosures under the Australian Government’s new legislative framework.
The roadmap points to a stable FY27 transitioning to FY28 growth, backed by locked-in revenue and a strong balance sheet.
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