Infragreen CFO on FY26 growth and energy transition

0:00Followed and gone from the company's presentation last week at the ASX Small and Mid cap conference in for Green CFO Martin MacIver joins me now to discuss the company, its sustainability aims and its FY26 performance. Martin, thanks for joining us. Thank you Jonathan. It's a pleasure to have you. So let's kick things off today with a brief overview of Infra Green and the businesses under that umbrella. Yeah, that's probably all. Thank you. That's the Infra Green was established to partner with Clean Energy and Energy Transition sectors. And how we do that is we take an equity stake in those businesses alongside, typically the founder and support the founder and the business to grow to their full value. And our investment around involvement in the businesses is over a long

1:00period of time. So as long as the founder wants to be there, be it 10 years, 15 years, beyond our view is to really engage with those businesses and that for the long term instead of making short term decisions. The four businesses that we've currently got invested in to their two in the waste recycling and two in the energy sector. Now the first one is pure environmental and pure treats hazardous and regulated waste that provides industrial services such as industrial cleaning services and then treats the byproduct and has organic recycling. So this business operates in WA and Queensland and in our time in the last three years, the businesses doubled at sea, but so it's got really good strong growth and really good tailwinds. Minimum at recycling is an integrated metals processing and export business. So we take in

2:05ferris and non-ferris metals in our three locations, being WA, Victoria and New Zealand, process it, sort it and then majority of it is exported into the busking, can't reconstitute it into new metal products by other people. So that business certainly plays a vital role in that circular economy and particularly with the focus on data centers and other high-value use metals, recycling existing metals that we have is really important. The two in the energy space, energy bill, it's the number one solar business, a solar installer in retail, sorry in residential new homes and our we partner with the builders, the high-volume builders, so as they're rolling out different developments and per states, we're the energy partner or energy builders, the energy partner. So it's not only doing solar panels,

3:09it's doing batteries, inverters, smart meters, EV charges and a like, but it's really set up as the access to the channel for delivering products into the new build construction. So adjacent products to are also under consideration and it's with the shortage or the demand to increase the rate of new home building, we see a really bright future for energy bill. And the fourth one, Meridan energy is an 82 megawatt peaking power plant in WA and so it's a people may ask how that fits within sort of secular economy or sustainability, but peaking power plants it's diesel-fired, but it's it's a really important to have peaking power plants to support the energy grid as more renewable energy generation gets deployed. So it's essentially the insurance policy for continuity of

4:09supply. We can turn on 15 minutes and be producing electricity, so being able to provide that stability to the grid when we call on is really important. So that's a yeah, a vital part of the energy sector. So it's a part of Infragrade's mission is to I guess invest in untabbed value companies, but what you're telling me here, these companies seem to have a lot of value in them. But we're very much focused on businesses that are generating good cash flow, their successful businesses. They may well be starting in some cases that say $5 million a year, but they're doing that in a profitable way, but they've got the ability to scale with support and not just financial support, but management support, strategic support, lots of different layers to get to 30 to 50 and beyond in most cases. So they're very much businesses that are

5:09a good quality investment businesses. And they're all obviously linked to clean energy transition before we sort of move back into Infragrade and what's happening there. What are your thoughts on that transition and how quickly I guess we're moving or where we're heading? It's always any sort of major change certainly on the either on the waste front or the energy front, certainly major sort of economy-wide changes is complex and takes time. And it obviously needs good businesses to support that process, but it will take time. So we see that the businesses we're investing in and other businesses we're looking at will add to that process. Yeah. And then you mentioned other businesses that you're looking at, you might not be able to tell me who or what. But I guess overall what sort of businesses are you looking at?

6:12Yeah. Well, we have the two major sectors we focus on. We're probably seeing a little bit more opportunity for investing or in partnering with businesses in the energy sector just at this point in time. We're still open for looking at opportunities in both, but just in the focus on that energy transition, there are some interesting businesses there. So we'll see how they progress over time, but it's certainly sectors within both of the, so parts within both of those sectors that are really good commercial and offer value to us and our shareholders. So let's turn attention to something close to your heart, financials. You deliver the record full year earnings. Can you talk us through those numbers and what you put your growth down to? Yeah, no problem. So the businesses we have, the four businesses that they're performing well and growing in their own right and sort of have good outlook as well. And it's important to note

7:17that the earnings of the four businesses are correlated together so that there's a really good balancing portfolio effect that we have. But on the results for the year, we were pleased to see the 29% growth in EBITDA year-on-year. And one measure that we really look at closely is the dividends we receive from the businesses. So they more than doubled year-on-year. So that was, we saw that as a very positive result. And outside of that, we were able to pay our first intra-men and finally dividend in FY26 as well. So we can pass some of that earnings and cash generation on to shareholders. Looking forward, we've put out earnings guidance of EBITDA of 26 to 28 million. That's for the existing businesses. Outside of that, we really pursue four growth pillars. One is our organic growth.

8:21Two is where there's an opportunity to increase our stake acquisitions to those businesses, which might give them a geographic open a new geography or new capability or capacity. And then finally, as every 18 to 24 months, we'll look to add a new platform business to our to our group. So certainly a lot of growth to look forward. So what are the key messages to investors? I think reiterating back that the earnings are the businesses we have. They're in really good sectors. Really good strong tailwinds. The businesses we have currently aren't correlated. Over time, as we add more platform businesses, they may be some correlation, but at the moment, they're not. They've got different drivers, different tailwinds within those sectors, which are important. And our share prices performance in the last 12 months has, we see, has been undervalued significantly. And we see that if you look at the valuation of each of the

9:24businesses separately, that will show where the true value of the business is. And as a result, we're doing on a buyback currently and see that as value-creative. But we've got some short term where we see short term opportunities to outperform. But ultimately, we've got long term, really good tailwinds in each of those two sectors we are pursuing. Yeah, Martin, certainly an interesting space to be working in and certainly a space of growth. But yeah, everything looks to be moving well for you. Thanks for your time today. And yeah, good luck with everything that comes in FY27. Great. Thank you very much.