Verbrec Completes Alliance Automation Acquisition Targeting $100M Annual Revenue
Verbrec Ltd (ASX: VBC) has completed the Verbrec Alliance Automation Acquisition and reported strong H1 FY2026 financial results, positioning the combined group for annual revenues exceeding $100 million. The acquisition, finalised in December 2025, is expected to contribute $60 million in annual revenues while the company’s net cash position improved from $2.3 million to $11.6 million, demonstrating financial strength to execute its growth strategy.
Verbrec acquires Alliance Automation and posts record half-year results
The Verbrec Alliance Automation Acquisition represents a strategic expansion into high-growth industrial automation sectors. Alliance Automation brings capabilities in digital transformation, including Industry 4.0, Software Defined Automation, Cyber Security, and Artificial Intelligence.
For H1 FY2026 (July to December 2025), Verbrec reported revenue of $46.1 million on a continuing operations basis, up from $38.9 million in the prior corresponding period. EBITDA reached $4.0 million, compared to $1.7 million in H1 FY2025, while the company’s net cash position improved substantially to $11.6 million.
The acquisition effectively doubles Verbrec’s revenue base while simultaneously strengthening the balance sheet, a combination that signals disciplined capital allocation. The combined group now comprises 700 team members with offices across Australia and New Zealand.
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What is industrial automation and why is demand accelerating?
Industrial automation refers to using technology to control industrial processes with minimal human intervention. This encompasses programmable logic controllers, robotics, sensors, and software systems that monitor and manage manufacturing operations.
Industry 4.0 represents the fourth industrial revolution, integrating digital technologies such as the Internet of Things, cloud computing, and machine learning into manufacturing environments. This transformation is driving demand for automation as companies seek operational efficiency, improved safety protocols, reduced labour costs, and agile manufacturing capabilities.
Alliance Automation’s expertise in Software Defined Automation allows industrial systems to be controlled and reconfigured through software rather than hardware changes, providing flexibility in production environments. Cyber Security for Operational Technology has become critical as industrial systems connect to networks, creating potential vulnerabilities. Machine Learning and Artificial Intelligence enable predictive maintenance, quality control optimisation, and process automation.
Verbrec now offers end-to-end capability across the asset lifecycle, from Advisory and Engineering through Automation & Control, Construction, Asset Management, and Operations. This positions the company at the intersection of multiple structural trends including electrification, smart manufacturing, and operational technology security.
Financial performance demonstrates operational momentum
Verbrec’s H1 FY2026 results show revenue growth of 18.6% on a continuing operations basis. EBITDA margin expanded from 4.3% to 8.7%, more than doubling profitability as the business scales.
The divestment of the Competency Training division generated a $6.8 million gain, contributing to overall Group EBITDA of $11.3 million. Strong operating cash flow of $4.0 million supports the company’s self-funded growth strategy.
| Metric | H1 FY2026 | H1 FY2025 | Change |
|---|---|---|---|
| Revenue | $46.1m | $38.9m | +18.6% |
| EBITDA | $4.0m | $1.7m | +135% |
| EBITDA Margin | 8.7% | 4.3% | +4.4ppts |
| Net Cash | $11.6m | $2.3m | +404% |
The margin expansion demonstrates operating leverage as the business scales, a key indicator of sustainable profitability. Gross margin remained robust at 33.3%, marginally down from 34.3% in the prior period as the company invests in growth initiatives.
Work in hand and pipeline signal continued growth
Forward-looking indicators support the company’s positive trajectory. Work in hand has grown by over 75% to $71 million, up from $40 million in H1 FY2025. The opportunity pipeline expanded by over 50% to $203 million, compared to $131 million in the prior corresponding period.
Key pipeline metrics include:
- Work in hand: $71 million (+75% vs H1 FY2025)
- Opportunity pipeline: $203 million (+50% vs H1 FY2025)
- Tender win rate: 33.9% year-to-date
These leading indicators suggest the growth trajectory will continue into H2 FY2026 and beyond, providing visibility for revenue conversion.
FY2026 guidance and margin expansion roadmap
Management has provided full year FY2026 revenue guidance of $110 million to $120 million on a continuing operations basis, with EBITDA guidance of $8 million to $10 million. This implies an EBITDA margin target range of 8.0% to 10.0%.
The company aims to achieve margin improvement through several levers:
- Cross-selling to common client base across Verbrec and Alliance Automation
- Geographic expansion synergies leveraging combined office network
- Enhanced project delivery capabilities from integrated service offering
- Reduced cost of goods sold through operational efficiencies
The combined group’s scale and diversification provides multiple avenues for margin expansion beyond organic revenue growth, with management targeting the upper end of the 8% to 10% EBITDA margin range as integration progresses.
Interim dividend declared
Verbrec has declared an interim dividend of 0.1 cents per share, fully franked at 30%. The record date for determining entitlement is 31 March 2026, with payment scheduled for 21 April 2026.
The dividend signals management confidence in cash generation sustainability and commitment to shareholder returns alongside growth investment. With cash and equivalents of $21.1 million and net cash of $11.6 million, the company maintains financial flexibility for strategic initiatives.
Strategic positioning across six core sectors
Verbrec operates across the full asset lifecycle, from Advisory through Engineering, Automation & Control, Construction, Asset Management, and Operations. The company services six core sectors: Sustainable Energy, Efficient Mining, Modernised Infrastructure, Water Security, Defence, and Smart Manufacturing.
Alliance Automation enhances Verbrec’s Manufacturing sector exposure and adds capability in four growth markets: Gas Market Transition, Electrification & Energy Storage, Cyber Security for Operational Technology, and Industrial Automation & Machine Learning.
| Sector | Relative Strength |
|---|---|
| Energy | Highest |
| Mining | Strong |
| Manufacturing | Strong (enhanced by acquisition) |
| Defence | Moderate |
| Water | Moderate |
| Infrastructure | Moderate |
The combined group maintains offices across Australia and regional hubs in key mining and manufacturing centres including Perth, Brisbane, Sydney, Melbourne, Adelaide, Newcastle, Townsville, Mackay, Gladstone, and Yarrawonga, with a presence in New Plymouth, New Zealand.
Diversification across sectors and geographies reduces concentration risk while providing multiple avenues for growth. The integration of Alliance Automation’s automation expertise with Verbrec’s engineering and operations capabilities creates cross-selling opportunities within existing client relationships.
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Capital structure and market positioning
As at 20 February 2026, Verbrec’s share price stood at $0.21, implying a market capitalisation of $64.3 million with 306.2 million shares on issue. The company maintains a strong institutional register, with substantial shareholders including Thorney Holdings and DMX Asset Management.
Capital structure highlights include:
- Cash and equivalents: $21.1 million
- Net cash position: $11.6 million
- Top 20 shareholders hold 66.71% of shares on issue
- Board and key management personnel hold 24.78% of shares
The strong institutional register and net cash position provide stability and optionality for further strategic acquisitions. Management has articulated a growth strategy combining organic expansion, capability development, financial discipline, and strategic acquisitions focused on geographic expansion and technological capability enhancement.
The Verbrec Alliance Automation Acquisition represents a transformative milestone for the company, doubling revenue scale while strengthening the balance sheet. With H1 FY2026 demonstrating strong organic performance alongside the strategic acquisition, Verbrec has positioned itself for sustained growth across high-demand industrial sectors. Management’s FY2026 guidance of $110 million to $120 million revenue and $8 million to $10 million EBITDA reflects confidence in execution capability and market positioning.
Investors can access further updates and engage with management through Verbrec’s Investor Hub.
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