I'm Chan from Bridge Street Capital, and today we are hosting Mitchell Services for the FY 2026 Q2 update. Today we have with us Andrew Elf, CEO, and Greg Switala, CFO, to talk about the quarterly. Over to you, Andrew. Thank you. Thanks very much, Allen, and thanks everyone for, for joining us today. We'll just touch on a few key points in the quarterly, and then open it up to questions, as we usually do. But first off, obviously, some good results in the quarter, and a solid first half, and really, that's the, the title on the, on the sheet here. You know, the, the strong profit in H1 has certainly driven the business to a net cash position, which is, which is fantastic to see. So obviously, looking back, last year was a harder year with certain factors outside of our control. The couple of years before that, you know, over AUD 40 million EBITDA, and some good returns to shareholders. So, yeah, again, this is a good start for us, and hopefully we can bring home a solid second half and have a good year for the business and our shareholders. So again, without reading it, the better, you know, a number of factors that hit us in the same half last year just didn't happen this year. It It was a good, clean operation for the six months. Contracts that we'd won and spent the money on were out, up and running, and then operating in the ordinary course of business. Lack of bad weather and other things like that. Client scopes, steady. Where things did end, there was enough work around to be able to redeploy rig and keep the continuity going. So all in all, a very good half for the business and good execution from the team, which is fantastic. So, there is a paragraph in there about the impairment of the assets for the fire in Western Australia. Obviously, an accounting nuance as we say, and that'll obviously reverse itself in the second half just on timing as we work through that claim process with the insurer, which is progressing well. I won't talk too much about the market. Needless to say, commodity prices are certainly strong across multiple commodities, and there's some tailwinds there. Pleasingly, coal has sort of bounced back a bit as well, which is good to see, too. And certainly the demand for rigs we can see is certainly starting to increase further. It always takes time from capital getting raised to the capital getting into the ground, but we're certainly starting to see more demand for rigs as that money that's been raised flows through the system. So obviously, with the operating rig count, you know, it's sort of there or thereabouts is where it's been, and there's some good tenders in the pipeline. But obviously, you know, we're patient, we're disciplined, and we're bidding things at the right prices to get those returns that we're demonstrating in this quarter. The half-year results table on page two, a very solid start to the year. And again, good return on capital, and good profitability, which is fantastic to see. Obviously, pretty disciplined with capital spending. We do expect that to be a little bit higher in the second half, but, but certainly again, you know, being disciplined and, and things like that. The cash flow, again, very strong and, and certainly some big tax bills that we've, we've had to pay as well. So, it's good to see that we've, we've been able to manage that and still achieve what we, we have achieved from a net cash perspective. But, but again, when this business gets going, and with more rigs in the share, the ability to really generate strong cash is starting to be seen. From a capital management perspective, I know people may have some questions on that, and really, what we've put in the quarterly here is just playing it with a pretty straight bat. Everyone's just gonna have to wait until the nineteenth of February when we come out with the half year. The board's got some decisions to make between now and that release, and we'll decide what's gonna happen at that point in time. But needless to say, you know, we've spent a lot of money on divs in recent times, notwithstanding last year, and buybacks. You know, we've certainly rewarded our shareholders as that debt has been reduced. So with the balance sheet where it is and the market and cash and everything else, then the board will obviously discuss and make a decision on that. And then lastly, the Loop decarbonization business. We've released previous announcements about Sumitomo making the investment into that business, which was fantastic. But the team has just won a contract with someone only yesterday, which is gonna have a couple of rigs out there for quite a long time. And there's another rig starting with a client in the not-too-distant future. So that business is gaining momentum all the time. I think certainly the clients that are exposed to that safeguard mechanism expense are getting their head around it, understanding it, and certainly, I think that Loop business is starting to get more momentum, which is, you know, upside growth opportunity for the business in the medium to longer term, as well. So all in all, good start, and hopefully, we have another good half in the second half, and it's a good year for everyone. So, Al, that's just a bit of a summary on some of the key points. I might hand back to you if there's any questions from anyone. Great. Thanks, Andrew. Yeah, first question. Can you provide some comment around the rig count. So, you've got nine in the fleet, 62 operating, obviously 30 rigs are still parked. Can you give me some color on where that balance sits? Are we losing tenders to competitors? You know, I figure with the current environment, there'd be plenty of work. And I guess when you go to put these things to work, how are you with staff? Would that be easy to sort of, yeah, get people to run these rigs? Look, I think the challenge for us here in the east versus the west is the coal sector. You know, there's obviously been pretty subdued, as we say in the quarterly, from a demand perspective in the coal, given you know Queensland, and that's obviously coal price slash royalties. So, what's happened is a lot of those rigs that have been in Queensland coal, and not just our rigs, have been redeployed across to minerals, which means that hard rock minerals has had to soak up rigs coming across from the coal. So, you know, as Western Australia, you've sort your iron ore and then your hard rock minerals. Iron ore steady, hard rock minerals picks up, utilization goes up. What you've seen over here, coal down, minerals up, rigs across from coal, utilization stays the same. You know, you haven't seen that uptick as much. Having said that, you know, there are tailwinds in minerals. Demand is increasing further. Coal's had a bit of a bounce back on prices. So again, you would like to think that we can get more rigs out, but we will remain disciplined in our pricing. Happy to lose if we bid fair and reasonable prices and get beaten. Happy to lose, happy to leave the rigs in the shed and keep delivering, you know, 20%+ return on capital with good profitability and cash flow with great team, safely, happy clients. But you know, where we put the prices in and we get a win, you know, we'll take advantage of it. We'll do it properly and make a dollar. So again, I think, you know, the chance of the rig count going up, you know, is greater than it going down, you would think at this point in time. You know, we'll keep taking advantage of that. Obviously, we do have the rigs available to us. It does give us leverage, but we'll remain disciplined with the bidding. That's great. Thank you. A question from Daniel. EBITDA margins in the quarter of 19.7% are very strong. How much of this is driven by steady operating conditions versus new high-margin contracts? And how sustainable is this over the rest of FY 2026? Yeah, if we don't get smacked with things that we can't control, it's absolutely sustainable. It's ordinary course of business earnings. You know, we've always said to people that we target 30% gross margin, 10% overheads for a 20% EBITDA number, and then everything else generally takes care of itself if you're managing CapEx after that from a return on capital and profit perspective. So certainly, I think that's what it really looks like in that first half is you sort of bang on those sort of numbers roughly, just with a lack of things impacting earnings outside of our control and good execution from our teams and some good continuity with operations. So certainly, I think, you know, again, if we have similar conditions in the second half, you know, we'll see how it goes. But obviously, you're generally stronger in H1 than H2, and that's on the basis of the wet season really impacting things, sort of January, February, March, usually, and it has been a, you know, a bit of wet weather around, particularly in Queensland in January. All right. Thanks. Just back on the impairment charge. Just confirming the impairment in Q2 is reflected at both EBITDA and EBIT line? Yeah, that's correct, Allen. So you can effectively add the AUD 1.4 million back to the quoted EBITDA numbers and EBIT numbers here to arrive at a normalized number. And I think just importantly, and to clarify, it's purely timing with the insurance claim expected to sort of, you know, finalize and, you know, very shortly, and that'll then, you know, reverse in Q3. Understood. Thanks, Greg. Maybe some comments around your order book? Yeah, it's not something that we've traditionally put into presentations or spoken about a great deal. You know, we really sort of just talk about, you know, how many rigs are running, how many rigs are in the fleet, what does the pipeline look like, what does it look like with commodities, and those sort of things. But so it's not, it's not something we've traditionally gone into a lot of detail with. But really, the best way to think about it is, you know, about a third of our contract book rolls per year on average. So you typically got, you know, two-year, three-year contracts, you know, mostly. There's obviously shorter ones in there for smaller clients, but ordinarily, you'd have about a third of the book rolling. And, you know, some years it's more, some years it's less. This particular financial year 2026, it's a little bit less than that. You know, given that we had a few good wins and had to spend the money and get those jobs up and running last year, you know, we had a higher proportion of locked-in work. But yeah, certainly the order book that you might see in some of the other, you know, NRWs and others or Monos we don't put together. Great. Question on CapEx. With CapEx of AUD 7.8 million year to date, can you remind us what your expectations are for the full year? I think the AUD 7.8 million is probably not reflective of a normalized number. In other words, I don't believe you can simply take that number and multiply by two to get to the full year number, and that's largely timing related. So it will be, you know, it will be certainly north of the AUD 15.5 million. But at the same time, FY 2025 had a relatively high level of CapEx, just given those new jobs that were won, as Andrew mentioned earlier. And I think, from memory, CapEx in the last year was a tick under AUD 20 million. I think, you know, certainly north of AUD 15 million, but lower than AUD 20 million, yeah, probably AUD 17.5 million, AUD 18 million, based on what we know now is probably a reasonable number. That can obviously change, of course, depending the success of some of those, you know, tenders that Andrew mentioned earlier. Yeah. Right. Thanks, Greg. A question from Nick here in regards to Loop. If there's an increase in requirements, will that require additional investment in capital? It will require an additional investment in capital. Obviously, Loop currently owns one drill rig. An increase in requirements will require capital. Just reminding everyone of the Sumitomo investment that happened in late August, whereby Sumitomo have effectively, based on certain hurdles, committed to two additional tranches of approximately AUD 1.5 million each. An increase in rig requirements would see the drawdown of those two tranches effectively, and the use of those funds would certainly be to fund the additional rigs. And I dare say, you know, once it's reached that point, or if it reaches that point, Loop would certainly be able to sort of stand on its own two feet in terms of acquiring, you know, debt facilities to fund rig four, five, and six going forward. So, so we don't see any direct finance requirements from Mitchell Services or Talisman, the other partners, certainly in the short term at least. Great. Andrew, I know we've touched on capital management, but this question relates to that. Capital management policy was to pay out 75% of the net profit. Are you saying this could change? No, look, I think that's been communicated as pay up to 75%, you know, and the board had spoken to people previously that, you know, their decision will be to allocate, you know, based on growth opportunities or buybacks or divvies, but up to 75%. So again, I can't say anything other than that until they meet, talk, decide, and we put it out, you know, on the, I think the eighteenth, Greg, is it we're gonna- 18th of February? 18th. 18th of February, we'll release the half year or intending to release the half year. So, that'll be the time to keep an eye out for that. Thank you. With regards to Loop getting more momentum, when do you think you'll need to start to think about acquiring new decarb rigs to support potential new clients? Yeah, the good thing with that business is there's a lot of pre-work that we do in advance of the drilling in regards to engineering, modeling, planning, operational readiness, et cetera. So it's not like you've got to commit, buy a rig, get it on spec, and then hope to win and get the work. You've almost got a nice scenario there where you can get a win with a client, know that you've got a fair runway of sort of desktop-type consulting work in advance of starting operations on their site in the field, and sort of tie it to, okay, you'll win and start that work, then you might go, "Okay, let's get a rig for this client because they're gonna want one." So ultimately, the answer is more work, more rigs, of course, but not right now. You know, certainly, I think maybe, if we were gonna buy rigs for Loop, potentially, after 30 June, unless something else changes. Understood. Thank you. A question from Chris. Has debt been paid off to achieve the current net cash position, or have you accumulated a cash pile? Should we make any changes to previous forecasts of debt reduction? No. So I don't believe any change to the forecast debt reduction is required. And to answer the first part of the question, the AUD 7 million worth of net cash is effectively AUD 15 million in cash. So yes, there is a cash pile that's been accumulated, coupled with AUD 8 million worth of gross debt. Now, that gross debt is just traditional equipment finance facilities, you know, that generally get paid over a three-year period. There would certainly be no intention to try and target repaying that off earlier. So in terms of how the debt comes off, that's just in line with, you know, what was previously been disclosed in our financials. In terms of the AUD 15 million worth of cash, you know, that then becomes an important aspect to the meeting, as Andrew mentioned, that's gonna take place later this month in terms of, you know, best use of that, from a capital management perspective. ... Thank you. Now, a question from Sam, in regards to work. The inquiries you are seeing, are they from new or existing clients? And do you expect these inquiries to convert in the second half or in FY 2027? Yeah, the leads-- Sorry if there's any noise in the background, that as luck would have it, the gardener's just rolled up. But, yeah, look, we're seeing inquiries from new and existing clients, particularly in the metalliferous or mineral space. Certainly not coal, as we say, it's pretty flat. There are a number of tenders submitted with decisions due in the next month or two, where the work would start this side of 30 June or a touch after. So, yeah, there is a couple of those in the pipeline. Right. Thank you. The next question, in regards to rigs. Does it make sense to dry lease spare rigs to operators in the western states? Yeah, absolutely. That's something that we have done before, and we would do it again if the opportunity arose. I did have a conversation with someone late last year in Western Australia about one particular rig getting rented. Didn't go anywhere, but, yeah, if it gets absolutely red hot and they need more rigs there, you know, it's not an opportunity that we would go to Western Australia for, because we do operate in Western Australia. You know, it's something to consider. Absolutely. Right. Thanks, Andrew. Okay, bear with me on this one, guys, from Ismail. Obviously, he's commenting. First of all, congratulations on the strong result and the solid cash generation achieved for the half year. Given the current very favorable environment for the commodity such as gold, copper, I'd like to ask: How many rigs are currently operating as of today? And how is the company approaching the signing of new contracts at this point in the cycle, particularly with the objective of securing future utilization ahead of a potentially less favorable environment? Yeah, I mean, if you think about it, a drilling contract, the first thing you do is look at the structure of a drilling contract. It's not a construction-style contract. So you don't have, generally, you don't have consequential loss, liquidated damages, or a fixed schedule of work as such. The client reserves the right, and sometimes by way of mutual negotiation, to vary the scope, the services, either up or down, and that notice can be given generally on a 30-day period. So, you know, if you sign a contract now, for 1 million m, that client could terminate it, with 30 days notice. You sign a contract for 1,000 m, same thing. So the approach that you take to contracting and winning work doesn't change. You've got to go, "These are our costs. This is the return that we want to get," and you put your bid in accordingly. And we've been very open telling people, as I said earlier on this call, 30% gross margin, 10% overheads, 20% EBITDA. There's obviously different factors you then take into account where those gross margin numbers move. It's either highly technical work, highly specialized work, short-term work, working for juniors, versus longer-term ongoing work with a Tier One major, where you're gonna have your rigs running at a site that's steady and stable as it can be for the next 10 years. So you will make a decision on what gross margin you put in to bid based on, the client, the commodity, the risk of the drilling, you know, the terms and conditions, the technical nature of the work, et cetera, et cetera. They're all the things that you take into account. You've also got to have a look at the outlook with, inflation and how long you contract for, and your rise and falls, and labor rates, and all those sort of things. So they're all the things that we take into account. So, you know, as utilization goes up and the squeeze comes on, things get tighter. You can bid more aggressively, bid harder. Certainly, the juniors, you know, it's well understood, they come, they go. And as things get busy, you put the prices up. But again, that might not necessarily be the case as much with your larger clients. They'll sort of get a fairer price through the commodity cycle, in exchange for the fact that they keep you alive when times are tough. You know, but I think generating a 20% EBITDA return, you know, with good return on capital, you know, is a good fair number for a business like this, if you can get it. You know, when you don't have things outside of your control impacting those returns. Thanks, Andrew. Our next question, again, bear with me here. So, I know we sort of had a pipeline already, but can you provide some color on the composition of the tender pipeline you're seeing? You mentioned that there is a lag between commodity prices translating into demand. Obviously, when you talk to your customers, how do you see this cycle playing out? Is all of that demand coming across in tenders today? Do we still need to see them make capital decisions? It's starting, it's starting to come through now in tenders that we're receiving and submissions that they're asking us to put in. So we are definitely starting to see it. it. No doubt about that. And it's predominantly gold-related, no surprise. You know, Victoria, New South Wales, Queensland as well, but not to the same, not to the same degree. So certainly I think, you know, we are starting to see it, which is really positive. Do you think part two of that question are coming from the juniors? It's a mix. Yeah, it's definitely more juniors. Absolutely. Yeah. Got it. There is a higher, a higher proportion of juniors in that mix than there has been, but, you know, the success in some of their drilling is driving the results, too. You know, I think, Southern Cross in Victoria has been a wonderful success story. I think, you know, Falcon in Victoria, another wonderful success story. Catalyst in Victoria are a success story. Waratah in New South Wales, looking good. So there's some, some juniors out there that are, that are doing some really good things. Excellent. Okay, are there any impacts from wet weather on the East Coast or any demobilization or mobilization that you're aware of in the second half? Yeah, the wet weather in January has been horrible in Queensland. It's been all over the news, been a horrible start to the year in Queensland with the wet weather. The rest of the country, not too bad. We've lost a bit of time in Victoria because of fires. So, you know, if it's not floods and rain in Queensland, it's fires and fire bans in Victoria, so we're waiting for the plagues to come. But, it's, you know, it's not too bad in Victoria. It's really just if it's a high fire danger day with that hot weather, you sort of, if you're working in national parks or highland country, you've just got to stop. But certainly it's been a, you know, a tougher start in Queensland. But again, as far as what happens with the weather and fires and other things from now moving forward, you know, you can't predict it. We are protected. We do have standby rates in place where we do not lose money when these things happen, but we do not make money when these things happen. It's effectively a neutral situation where you're effectively diluting your percentages. So, we'll wait and wait and see what happens. But certainly on the mob demo, nothing big, business as usual. So, again, if we get some good weather and just get back busy, we should be able to keep generating some decent numbers. Thank you. First half 2026 revenue, what would be the commodity mix, maybe look like? So that'd be in the half year accounts and in the preso. But without giving the exact numbers today in advance of that being released, gold up, coal down. Yeah. Yeah. Back to the Loop. I think memory, there's two operating rigs at the moment, or that's committed to. I guess, to Sam's question, is there a third coming in online in second half? Yeah. So there's gonna be 1 rig starting work in April for a trial, and that's gonna be a sort of a three or four-month project. And there's two rigs, two rigs starting, probably in April again, and they will run, we're expecting probably for a couple of years. So, we've been notified of the award. We haven't certainly haven't signed the contract yet, so I can't really say who it is, and, you know, it's not contracted, but, that's the plan. So yeah, hopefully two rigs on an ongoing basis, and one on a trial. So there's certainly a lot of work happening, with multiple clients, from a consulting perspective, and a lot of momentum in the business development space. So hopefully that, you know, momentum keeps going. Good. I think, Greg, we mentioned about CapEx before, but usually we split it up, maintenance CapEx. Yeah. So it's essentially, it's essentially all maintenance CapEx, both in terms of the numbers we've quoted here, and I spoke to some somewhat in terms of the forecast, that is generally all maintenance CapEx. Thank you. This next one relates back to capital management. I think Andrew and Greg, I think, the language here is just back to the 17th of February on the outcome of that one. So with the company share price trading at 3.5x free cash flow and a net cash position, does the board consider share buybacks and currently to represent a clear opportunity to create value for shareholders? And what role could they play within the company's capital allocation policy? Yeah, same answer. It's the same answer from before. I mean, and again, buybacks and divs, it's like consolidations. Everyone's got a view. Some people prefer buybacks, some divs, you know, so it's just... Yeah, it's the board's call. See what they decide. No, we'll wait. Thank you. Yeah, historically, any update from Anglo or Moranbah North and Grosvenor regarding the resumption of operations? Look, they're still working toward getting going at both of them. But again, they're keeping their cards pretty close to their chest for various reasons. Obviously, they've still got, I think, some discussions with Peabody as a result of that transaction. So they certainly haven't disclosed much to us or to the market. But certainly as far as we're aware, you know, they're working toward getting going again. So certainly from a positive perspective for Mitchell Services, you know, if and when they do, that is a positive for us because we'll have more rigs running at both of those sites. And that will naturally give us a bit of a boost in that coal sector of the business. Yep. Expect it. Thank you. Last question from Nick, obviously on Loop. Is there the possibility of an offtake agreement for gas in the upcoming operations? Yeah, absolutely. You know, again, Loop is never gonna be an infrastructure company funding and developing any power plants or other gas-related infrastructure. But there are certainly opportunities to look at commercial models and to sort of go, "Okay, how can we turn a waste product into a resource and monetize that, and sharing it in some way?" So, again, as we get more momentum and more confidence and we move forwards, it's absolutely something that we can talk about. But, is it gonna happen tomorrow? No. Is it an opportunity? Absolutely. Yeah. Thanks, Andrew. I think that last question, I'll again, probably relate back to the board, and we'll have to wait till the half year. So yeah, we'll leave it at that. Any final comments before we sign off? No, thanks, Allen. Thanks everyone for attending. I think, look, solid, solid first half and good to bounce back after a tough year last year and a couple of better years before that. So I think we've got some runs on the board if you go back and look at those other couple of years. You know, balance sheet's strong, board's got some decisions to make, and hopefully that the tailwinds in the industry continue, and we have a good second half and, you know, not too much rain. And as Essam says, hopefully Anglo can get going again at a couple of their sites too. So I think all in all, we're well set for a good second half, Allen. Thanks for having us. Fantastic. Thank you again, guys, and congratulations again. Talk soon. Thanks. Thanks, Andrew. Thanks, Greg. Bye.