The Environmental Group Limited
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The Environmental Group Limited acknowledges the traditional owners and custodians of country throughout Australia and acknowledges their continuing connection to land, sea, and community. We pay our respects to the people, the cultures and the elders past and present.
FY26 in Review
FY26 demonstrated The Environmental Group’s ability to adapt, innovate and build the foundations for future growth. By strengthening our businesses, expanding market opportunities and advancing key strategic initiatives, we have positioned the Group to deliver long-term value for shareholders and customers.
Review of Operations
The Environmental Group Limited is focused on engineering a sustainable future, providing products and engineering services through our operating divisions to a diverse range of clients across many industries. The 2026 financial year delivered below our operational expectations while we continue to invest in the Group’s long-term sustainability. Key focus points included relocating to significantly larger, consolidated premises, implementing an ERP system to support future growth and the integration of Advanced Boilers & Combustion into the Group, whilst challenging were successfully completed. Alongside our operational improvement initiatives, we have made significant investments in leadership capability and organisational depth to position EGL for its next phase of sustainable growth. This includes substantial progress in the development of our PFAS Extraction technology, which has generated strong interest from a number of domestic and international customers. Strategic appointments included a new Chief Financial Officer, General Manager of EGL Baltec and General Manager of TAPC, complemented by the establishment of stronger support functions through the appointment of a Procurement Lead and dedicated Financial Business Partners within each business unit. Collectively, these appointments strengthen accountability, commercial execution and decision-making, while providing the leadership capacity required to support a larger and more integrated organisation.
Enhancing combustion efficiency with heat exchange systems, biomass boilers, and autoclaves to optimise energy use and sustainability.
Recycling, sorting and baling technologies for efficient waste recovery, including PFAS extraction from water, biosolids and soil.
Engineering gas turbine inlet and exhaust systems, including inlet filtration, bypass exhaust with diverter dampers, simple cycle stacks and silencers.
Advanced solutions for controlling gas emissions, particle removal, dust & odor control, ensuring compliance & strict air quality regulations.
EGL Energy had a challenging year following the launch of the new ERP systems, causing significant operational disruption to the business. EGL Energy is a high-volume business with Tomlinson alone generating close to 9,000 invoices a year, the operational impact of the system upgrade affected both invoice accuracy and processing efficiency. The issue was resolved by the end of the financial year with a return to normal trading.
While ERP implementations are widely recognised for creating operational disruption during transition, the issues experienced during the rollout highlighted shortcomings in data readiness, validation and testing processes that should have mitigated much of the impact. In response, management changes have been made and operating procedures strengthened to improve accountability, system governance and execution. At the same time, external factors outside our control added further pressure on profitability. Disruptions to global energy markets arising from the closure of the Strait of Hormuz contributed to significantly higher fuel costs. With a fleet of 133 vehicles travelling extensive distances each day, these increases had a material impact on operating costs and earnings. To offset these pressures, we implemented pricing adjustments, including increased travel charges, to better recover the cost of delivering services and protect margins.
Revenue increased by 20.2% on PCP to $64,468,589 with EBITDA down 7.7% to $7,008,886 EBITDA for the full year, largely due to the impact of the ERP system and fuel price. With these issues substantially behind us, margins should improve to normal levels over the coming period. It is also pleasing to see that new boiler sales have been particularly strong in early FY27. The increase in service revenue, from approximately $40.6 million to $47.1 million, is expected to have a material impact on the business as we continue to grow our high margin, recurring service revenue base. New boiler sales, Fulton product sales and service expansion have been very strong for Tomlinson’s in recent months and position the business well for the coming period. Ignite Services performed well and continued to contribute above expectations with both revenue and earnings growth.
In 2025 we acquired a leading Australian industrial boiler service and manufacturing business Advanced for $4.9 million. This represents a major expansion in EGL’s sales and service offering to the industrial boiler industry, complementing EGL Energy’s existing business. Advanced’s product offerings, including its range of Maxitherm boilers, are one of top two leading water tube boilers in Australia, alongside the Tomlinson Energy Service product range. Positioning EGL Energy as the clear number one in packaged boiler sales in Australia, representing the two leading brands. In addition to the manufacturing and sales of boilers and water heaters, Advanced has developed a significant and growing service business which represents approximately 60% of revenue.
The integration of Advanced into the Group has been highly successful, reflecting its strong professional culture, commercial acumen, engineering expertise and manufacturing capability. During FY26, Advanced further expanded its contribution across the Group through the manufacture of control panels, tanks, vessels and structural components. This capability was also instrumental in the manufacture, installation and commissioning of PFAS treatment plants for EGL Waste Services. The success achieved throughout the year is a testament to the leadership of Laurie Grigg and the dedication of his team, whose efforts have delivered significant value to the business during FY26.
Revenue increased by 20.2% on PCP to $64,468,589 with EBITDA down 7.7% to $7,008,886 EBITDA for the full year. The increase in service revenue, from approximately $40.6 million to $47.1 million, is expected to have a material impact on the business as we continue to grow our high-margin, recurring service revenue base. It is also pleasant to see that new boiler sales have been particularly strong in early FY27
EGL Waste is the Group’s primary platform for delivering integrated solutions to the waste industry, leveraging the diverse capabilities, technologies and expertise available across EGL’s businesses. The business is further supported by the Turmec agency agreement, alongside comprehensive servicing, maintenance and spare parts support. The addition of baling capabilities strengthens our ability to support waste processors and recycling by improving material recovery, increasing operational efficiency, and contributing to a more effective circular economy. Additional services include dust and particulate matter extraction through EGL Clean Air and sterilisation and combustion technologies via EGL Energy, providing the “one-stop-solution” to the waste treatment industry.
The outlook for EGL Waste remains strong, supported by the long-term opportunities created by the Recycling and Waste Reduction Act 2020, which continues to drive investment, innovation and improved resource recovery outcomes across the sector. For the full year EGL Waste generated revenue of $4,655,247 and delivered EBITDA of $976,684. Increasing our service offering, including the Kadant PAAL agreement, has generated solid sales revenues and has led to an increase in service-based revenue, and introductions to an extended client base. Late in the financial year we completed the installation of a large-scale baling system into a significant waste recycling plant in NSW. New sales of Turmec plants have been subdued, with changes to recycling standards, especially in NSW, making the economics more difficult for our customers.
PFAS Extraction Technology
EGL’s patented PFAS extraction technology has continued to advance, with significant progress made over the past twelve months confirming successful treatment across an increasingly diverse range of waste streams. EGL set out to use its foam fractionation technology to remove PFAS from liquid waste streams. Over the past year we have been able to prove that the same technology base can be equally effective in removing PFAS from both biosolids and soils. This represents a significant opportunity for the Group and its shareholders, given the widespread presence of PFAS worldwide across a broad range of waste streams and the increasing need for proven treatment solutions. The simulation plant built in conjunction with Victoria University (VU) has been instrumental in demonstrating to the market the versatility and scalability of our technology. Continued investment into this technology has achieved outstanding results with removal up to 99% of PFAS from biosolids during testing and commercial operation.
Growing customer demand for effective PFAS treatment solutions, supported by strong and ongoing testing results, continues to drive the expansion of our capabilities. We continue to learn that subtle variations in foam fractionation can require multiple trials to determine the optimal PFAS removal regime for each waste stream. Over the past 12 months, we have advanced the technology further than in any previous period, expanding the range of applicable waste streams and strengthening our ability to profile them to achieve leading treatment outcomes. Our simulation program and real-world processing experience have significantly deepened our understanding of how to optimise performance across a diverse range of customer applications.
As customers seek solutions for increasingly complex waste streams, including soils and biosolids, EGL has partnered with a global leader in in-situ foam mass transfer technology. This collaboration enables our proprietary treatment process to be applied through an established vesselbased platform, extending its capability across a broader suite of waste streams. The modular and scalable nature of the technology provides customers with flexible treatment solutions across multiple sites and applications.
To further meet customer requirements for deployment flexibility and operational efficiency, we are also designing a mobile treatment plant. This capability will reduce setup and commissioning times while enabling rapid mobilisation for emergency response projects and time-critical remediation works, ensuring treatment solutions can be deployed quickly and efficiently wherever they are needed.
For some clients, removing PFAS to down-classify the waste can commercially lower disposal costs, changing processing economics, while extending landfill life and reducing long-term liability. For other clients, the opportunity to create beneficial reuse products from previously contaminated materials can be particularly attractive, transforming a waste liability into a valuable resource and supporting circular economy objectives. For each client, we assess the individual waste profile, establish the best treatment process and provide commercially attractive solutions for the problematic waste stream they need to treat, for others it is a treatment for disposal compliance approach.
From a commercial point of view, it was a successful 12 months with the installation of a major soil washing PFAS removal plant and the sale of two additional plants, the first of which is due for installation and commissioning in March 2027. The soil washing plant proved to be a major success on two fronts. Firstly, it demonstrated the substantial treatment volumes that we were able to treat using the same core technology through a retrofit solutions implemented onto an existing infrastructure. Secondly, it provided us with increased understandings that enabled us to identify a few minor technology adaptations improving the effectiveness of that plant and future plants sold to our clients.
The year culminated with the commencement of our US market development strategy, one of the world’s largest potential markets for PFAS treatment and remediation technologies. Recent in-person meetings with large players in that sector provided encouragement that our technology can address and serve this large and expanding market. Multiple face-to-face meetings have been held in recent weeks with interest from several parties.
A number of additional clients domestically have expressed interest in the technology beyond liquids treatment and have or are sending product for trial through our simulation plant. This allows us to define a treatment methodology and provide pricing for further plant sales.
Late in the 2026 financial year Rob Chignell joined as the new General Manager of EGL Baltec from Engie Australia. Rob brings a significant wealth of knowledge in the power industry, and strength in project and process management. Charles Borg has moved into a Bussiness Development role to focus on the growth and development of the business.
EGL Baltec is in a particularly interesting time with both structural and shorter-term changes in its markets. A portion of the revenue for EGL Baltec comes from the Middle East as one of the largest gas hubs in the world. The closure of the Straight of Hormuz has caused a temporary disruption and delays to gas turbine orders in the region, as well as challenges with shipping of completed systems, that are now in storage. When the region returns to greater stability, the gas turbines will still be required and the projects that have been postponed are expected to proceed.
At the same time, the demand for gas turbines in the USA is unprecedented, driven by data centres seeking to secure their own power generation capacity as electricity demand has increased with the growing adoption of Artificial Intelligence (AI). This has seen not only record high turbine orders, but turbines being redirected into the US markets from other global markets. OEM’s are seeing unprecedented demand from the data centre market, with some leading OEM’s now sold out until 2030, and other OEMs reintroducing older turbine models back into production.
In response to evolving market dynamics, EGL Baltec has taken deliberate steps to strengthen its position in the US market through the establishment of an agency agreement and local representation within the Midwest, a key hub for Engineering, Procurement and Construction activity. This presence enhances customer engagement, market visibility and access to emerging opportunities, with the business currently tendering a several gas turbine bypass systems for US projects. Anticipating the ongoing shift toward larger turbine technologies, EGL Baltec is also proactively expanding its product offering through the development of new solutions tailored to changing customer requirements. To support this strategic initiative, approximately $300,000 has been allocated to product development during the coming year, positioning the business to capture future growth opportunities in this evolving market.
As a result of changing market conditions, EGL Baltec underperformed for the year with revenue down 25.5% on pcp (a prior record year) to $26,561,420 with EBITDA at $2,852,038 down 24.7%. Two jobs in the Middle East suffered delayed delivery schedules due to the closure of the Strait of Hormuz and a further significant project was delayed due to supply issues. Two of these projects have now been completed with the third in the final stages of fabrication. The pipeline of work through the request for quote process (RFQ) remains strong, with uncertainty around timing of contract award.
The continued expansion of renewable energy is increasing the need for gas turbines that can operate flexibly across both peaking and baseload applications. As renewable energy capacity continues to grow, gas turbines benefit from the technology of being able to run in peaking load to support fluctuating electricity demand. This requires technical solutions capable of operating in environments subject to significantly greater thermal dynamics. This is driving good demand for brownfields work to retrofit existing systems, with the new generation of EGL Baltec silencers and diverter dampers designed specifically for peaking load turbines.
EGL Baltec has established a unique position in the market, designing silencers suitable for gas turbines running in peaking load capacity supporting the move to renewable energy while being able to achieve the noise attenuation required by our customers. The IP generated by our engineering team is world leading and has created a strong foundation for sustained future growth.
Kiril Nikitin was appointed General Manager of Total Air Pollution Control (TAPC) during FY26. Following nine years with the Group, including his role as Head of Engineering, Kiril has successfully transitioned from a technical leadership position into broader operational management. His early impact has been significant, with several key initiatives already contributing to improved performance, stronger execution and future growth opportunities for the business. EGL Clean Air had a result in line with expectations with revenue of $18,865,774 and EBITDA of $1,087,152.
Of particular note was the improvement in results in the second half, with EBITDA increasing by approximately 84% compared with the first half.
EGL Clean Air has faced challenging market conditions; there has been a well-documented significant decline in the lithium sector over the last three years, where EGL has historically provided kiln off gas scrubbing systems and other air pollution control systems.
It was very pleasing to note, as announced to the ASX on the 1st of April 2026, we were successful in being awarded a major contract by Ozango Minerais S.A., a subsidiary of Pensana PLC and the owner of the Longonjo Rare Earth Project in Angola, valued at approximately A$9 million.
The primary scope of work is the design and supply of an off-gas scrubbing system for the project’s processing facility. The Longonjo Project is a strategically significant rare earth development that will supply critical materials used in electric vehicles, renewable energy technologies, and advanced manufacturing. Work commenced in April 2026, with an anticipated duration of 12 months. The project has suffered some delays due to project funding but remains largely on track. Pensana PLC has confirmed they expect funding to be finalised in the coming months.
At the end of the financial year, a decision was made to recognise an impairment of Airtight’s carrying value on the balance sheet. While the decision was not taken lightly, trading has not returned to the level post the Covid renovation boom. With housing prices falling, we do not see the market improving in the joinery sector in the near term. Airtight management has continued to manage to the changing market conditions and has now progressed through two rounds of workforce reductions, something we do not undertake lightly but which has been necessary in the current market.
During the period we completed the installation of a grain dust control system, a project inherited from the Airtight acquisition, the job was delayed for an extended period as EGL took over the scope of the job, reviewing its complexities and ensuring the project would be delivered to the contract terms. While this was a time consuming and costly exercise, the client is extremely happy with the professionalism and technical ability of EGL in delivering a successful outcome and is likely to lead to significant further work for Airtight in the grain sector.
At the time of the acquisition, we believe that the scope of the works was understated in complexity and overstated in the proportion of completion. As such we have issued legal proceedings against the vendors of Airtight and have recognised a contingent asset in the notes to the accounts expecting a reasonable probability of a successful claim through the court process. Mediation is expected to occur in the coming months.
Chair's Report 2026
We enter FY27, with strengthened management capability, improved systems and greater depth supporting our operating businesses. The Board and executive team are aligned on the priorities ahead and confident in the underlying strengths of the business. These foundations support a more resilient One EGL, united by our purpose of ‘Engineering a Sustainable Future’ and well positioned to pursue sustainable long-term value for our shareholders.
Lynn Richardson
Non-Executive Chair
Dear Shareholders,
FY26 has been a challenging year for EGL and, importantly, a year from which we must learn. The financial result is below the expectations we held at the beginning of the year, although within the revised guidance provided later in FY26.
Geopolitical uncertainty, disruption to international logistics and changing market conditions impacted performance. We also experienced operational issues within parts of the business that affected project delivery, costs and profitability. Whilst a number of these pressures were outside our control, others were not.
At the same time, we have made meaningful progress in strengthening the organisation. Senior management capability has been expanded, recurring service and maintenance revenue has continued to grow, and significant investment has been made in systems and infrastructure that support a more integrated One EGL.
Throughout the year, the Board has worked closely with CEO Jason Dixon and the executive team to understand the issues affecting performance, test our response and support the changes needed for EGL’s next stage of development.
For the financial year, EGL delivered revenue of approximately $112 million, broadly in line with FY25, and normalised EBITDA of $8.7 million, approximately $2.5 million below FY25.
At the half year, revenue and EBITDA before significant items were both ahead of the prior corresponding period. Performance during the second half, however, did not develop as anticipated.
EGL Energy was affected by operational issues and increased input and logistics costs. EGL Baltec experienced disruption to international logistics and delays in anticipated project awards against a backdrop of increasing geopolitical uncertainty. EGL Clean Air and EGL Waste continued to perform broadly in line with expectations.
A significant positive was the continued growth in recurring service and maintenance revenue. Building this revenue base has been a deliberate strategic focus over several years and provides greater consistency alongside our larger project activities.
We recognise the disappointment created by the FY26 result. Shareholders are entitled to expect that growth is translated into sustainable earnings and cash generation.
Strengthening the organisation
EGL has grown considerably in scale, capability, geographic reach and complexity. FY26 reinforced that the systems, resources and management structures supporting the business must develop alongside that growth.
One of the most significant initiatives during the year was the implementation of a Group-wide Enterprise Resource Planning (ERP) system to replace multiple long-standing legacy systems and manual processes.
Considerable due diligence, planning, testing and preparation were undertaken before implementation, giving management and the Board confidence that the business was well prepared for the transition. What we underestimated was the scale of change involved in introducing a new system across a large operational workforce, including technicians working across multiple locations, while continuing to meet customer and project commitments with a relatively lean team.
The transition placed greater demands on the organisation than anticipated and resulted in disruption and additional cost. Our people worked extremely hard throughout the implementation, and I want to acknowledge their commitment during a significant period of change.
The experience has provided valuable lessons around the organisational capacity and support required for change of this scale. Importantly, the ERP platform is now becoming further embedded and is providing improved visibility across the Group. Together with strengthened finance and management capability, it is supporting better forecasting, project oversight, working-capital management and decision-making.
We have also consolidated operations into larger shared facilities in key states, further supporting stronger information flows and greater integration across the Group.
These initiatives represent an important stage in the development of One EGL — creating a business that can share capability more effectively, make better-informed decisions and deliver more consistent outcomes.
A major focus during FY26 has been strengthening management depth and adding specialist capability across the Group.
EGL Baltec: Bypass Exhaust System Desing, Manufacturing, Installation & Comissioning (Ireland)
The appointment of Gareth Nicholls as Chief Financial Officer has strengthened the Group’s finance leadership and brought additional capability in financial strategy, capital planning, analytics and systems transformation.
Rob Chignell joined EGL as General Manager of EGL Baltec, bringing extensive power-industry experience from Engie Australia together with strong project and process-management capability. His appointment adds valuable industry knowledge and operational experience to a business operating in increasingly complex international markets.
Kiril Nikitin was appointed General Manager of Total Air Pollution Control during FY26. After nine years with EGL, including as Head of Engineering, Kiril has successfully moved from technical leadership into broader operational management. His early impact has been positive, with initiatives already contributing to improved execution, business performance and the development of future opportunities.
We have also strengthened support around our operating businesses. A dedicated Procurement Lead has been added, together with Financial Business Partners supporting each business unit. These roles provide business leaders with greater access to specialist commercial and financial support while improving consistency and visibility across the Group.
These are important changes already in place.
The Board has supported Jason Dixon and the executive team in identifying areas where additional capability would benefit the business. Directors have also been able to draw on their own industry, financial and professional networks to provide perspectives, connections and access to expertise where useful.
During the year, the Board and executive team continued to test the assumptions underpinning our strategy.
Constructive challenge remains important, particularly following a year in which performance has fallen short of expectations. Equally important is ensuring that the executive team has the people, systems and resources required to respond effectively.
We remain confident in EGL’s direction and the long-term fundamentals of the markets in which we operate. The industries we serve continue to require solutions that improve environmental performance, reduce emissions, improve energy efficiency, recover resources and address increasingly complex waste and water challenges.
EGL also benefits from diversification across technologies, customers and end markets.
EGL Energy has a substantial installed service base and recurring maintenance activity. EGL Clean Air continues to demonstrate its ability to secure major projects in new markets, including the approximately $9 million TAPC contract associated with the Longonjo Rare Earth Refinery Project in Angola.
EGL Baltec retains specialist engineering capability across international power-generation markets. While disruption across the Middle East remains a potential constraint on project timing and new awards, the underlying market opportunity remains significant.
EGL Waste continues to develop opportunities across recycling, resource recovery and waste technologies, while our patented PFAS extraction technology provides exposure to an environmental challenge receiving increasing regulatory and community attention.
Cash flow and working capital became an increasing area of focus during the second half of FY26 and will remain a priority through FY27.
The cash position reflected a combination of factors, including the timing of project receipts and payments, working-capital requirements associated with our project portfolio, normalisation items incurred during the year and cash outflows associated with a legacy onerous contract within Airtight.
Management and the Board have increased visibility and focus on work in progress, project milestones and billing, inventory and the cash implications of commercial decisions across the Group. The ERP platform, strengthened finance team and Financial Business Partner structure are expected to provide increasingly timely information and support better management of these areas.
The continued growth in recurring service and maintenance revenue also provides a more predictable underlying contribution and helps balance some of the cash-flow variability associated with larger project activities.
Sustainable growth must be supported by sustainable cash generation. Cash flow and working-capital performance will therefore remain an important focus for both management and the Board.
Our approach to capital remains disciplined. Investment will be directed towards areas where EGL has a clear strategic and commercial rationale and where we believe the expected return justifies the capital and risk involved.
The year has involved significant organisational change alongside the day-to-day demands of serving our customers and delivering projects across Australia and internationally.
Our teams have managed business relocations, implementation of the ERP platform, changes to established work processes and difficult market conditions while continuing to support our customers.
Safety remains a non-negotiable priority across EGL, particularly during periods of operational change, and we remain focused on ensuring our people go home safely each day.
We enter FY27 confident in the underlying strengths and opportunities of EGL, whilst remaining realistic about the uncertainty surrounding the timing and conditions in which that opportunity will be converted. Geopolitical pressures have the potential to affect supply chains, project timing, investment decisions and costs, and we do not assume these conditions will quickly normalise.
At the same time, opportunities are developing in new markets and geographies, particularly across energy security, critical minerals, emissions management, waste recovery and environmental remediation. Some have the potential to be significant, although their timing and conversion cannot be assumed until contracts are secured.
Our priorities for FY27 are clear: realise the benefits of the strengthened management structure and ERP platform, improve execution and cash conversion, continue to grow recurring revenue and pursue opportunities where EGL has a clear competitive advantage.
On behalf of the Board, I thank everyone across EGL for their commitment. I also thank Jason Dixon and the management team. FY26 has been demanding, and the work undertaken to strengthen EGL during the year has been substantial.
To our customers, suppliers, partners and shareholders, thank you for your continued support.
We enter FY27, with strengthened management capability, improved systems and greater depth supporting our operating businesses. The Board and executive team are aligned on the priorities ahead and confident in the underlying strengths of the business. These foundations support a more resilient One EGL, united by our purpose of Engineering a Sustainable Future and well positioned to pursue sustainable long-term value for our shareholders.
Lynn Richardson
Non-Executive Chair
CEO's Report 2026
The successful integration of Advanced Boilers & Combustion Pty Ltd (‘Advanced’) has established the business as a cornerstone capability within The Environmental Group, creating substantial value through its engineering and manufacturing expertise, while underpinning the delivery of strategic initiatives, including the fabrication and deployment of PFAS treatment plants for EGL Waste Services.
Jason Dixon
Chief Executive Officer
Airtight Solutions Victoria Team
Dear Shareholders,
While it has been a more difficult financial year for The Environmental Group Limited than we envisaged 12 months ago, a great deal was achieved in positioning the business for the future, with the consolidation of sites, the launch of the Group-wide ERP system and significant management changes. At the same time, we faced some challenges, the closure of the Strait of Hormuz impacted several parts of our business through the price of fuel, business interruptions, freight costs and available shipping lines.
Our stated strategic goal has been to reduce the impact of larger projects and to continue to grow recurring service revenue as the bedrock of our business. We have continued to deliver on this goal, with over 55.3% of recurring revenue this financial year, compared to the prior year of 52.8%. EGL Energy generated $47.1 million in service revenue from total revenue of $64.5 million, representing approximately 73%.
Our stated strategic goal has been to reduce the impact of larger projects and to continue to grow recurring service revenue as the bedrock of our business. We have continued to deliver on this goal, with over 55.3% of recurring revenue this financial year, compared to the prior year of 52.8%. EGL Energy generated $47.1 million in service revenue from total revenue of $64.5 million, representing approximately 73%.
Looking ahead, the continued growth of our service and aftermarket business remains a key strategic priority; alongside the supply of new OEM equipment.
The foundations established during the year provide a strong platform from which to improve operational performance, enhance customer outcomes, and support future growth.
As the business continues to grow, we have not just focused on our core culture based on integrity and trust, but we recognise the need to grow and develop our management through both key external hires and internal promotion. Throughout the year we welcomed Gareth Nicholls as our Chief Financial Officer, Rob Chignell as the General Manager of EGL Baltec and appointed Kiril Nikitin, Head of Engineering, as General Manager TAPC. Without great people the business cannot succeed, and we will continue to strengthen and deepen the management team as we grow further. Beyond their individual contributions, these appointments strengthen the depth of leadership across the Group and play an important role in developing the next generation of talent, ensuring we continue to build a sustainable and resilient organisation.
Safety is very personal to me and needs to be part of our culture in all aspects of what we do. Safety is at the heart of the company, knowing that it is not just a basic rule of compliance, but rather a shared team responsibility where everyone actively protects their coworkers. This year we recorded one-lost time injury (LTI). Thankfully, it was a relatively minor injury with no long-term impact, but it does reinforce that any injury to a member of staff in the workplace is unacceptable. Having one LTI across 419,000 hours worked reflects our safety culture and how we put safety as a non-negotiable in everything we do. However, no injury in the workplace is acceptable, and we constantly review our procedures and safe work methods for potential improvements.
From a financial perspective, the business did not meet our expectations. As noted earlier, events in the Strait of Hormuz affected several areas of the business and delayed project deliveries—factors beyond our control. By contrast, the delivery of the ERP system was largely within our control. Despite extensive planning and testing, the system did not perform as expected following its February go live. Issues arising from the data migration, gaps in functionality and complexity for users required substantial remediation and adversely affected our financial results. A significant proportion of these issues had been resolved by the end of the financial year, and we have taken decisive action to isolate them and ensure they are one-off in nature. Our focus is now on improving processing speeds and simplifying the user experience.
For the Financial Year 2026, revenue was $111,963,627, flat year on year (FY25 $111,921,268). EBITDA decreased to $8,656,730 (FY25 $11,101,394), before significant items including impairment ($5,744,727), ERP costs ($2,423,117), relocation costs ($882,794), historical job write-off ($656,175), FX impact ($455,419), restructuring ($186,864) and legal & other costs ($465,658). The Group performed an impairment assessment of Airtight Pty Ltd during the year and determined that the carrying value of the business exceeded its recoverable amount. Accordingly, a charge of $5,744,727 was recognised, comprising a non-cash write-down of goodwill and costs associated with an onerous contract assumed as part of the acquisition of the business. The onerous contract remains the subject of legal proceedings and a contingent asset has been disclosed in relation to the potential recovery. No asset has been recognised at reporting date.
Each of the EGL divisions plays their role in providing ‘The One EGL Solution’ for a sustainable future. EGL Waste for recycling, sorting and baling technologies, as well as water treatment solutions, including technologies to address emerging contaminants such as PFAS. EGL Clean Air for dust, fume, emission and odour controls and EGL Energy for industrial boilers, burners and control systems for energy efficiency while reducing emissions. As waste treatment technologies develop further in Australia into the waste to energy industry, EGL Baltec has the expertise in intake and offtake systems for turbines and thermal dynamics to support the shift.
Strategically, the company is in a strong position, with increasing recurring revenues from service and a high-quality product line-up as we continue to deepen our market position. With the strengthened management team and year of reinvesting into the business now behind us I would expect to see much improved results for financial year 2027. The conflict in the Middle East will continue to impact our business, specifically around EGL Baltec sales in the short-term, however we will closely monitor developments and take appropriate actions to mitigate any associated risks where possible.
The longer-term results have been delivered through the successful execution of our strategy over several years, with a focus on building recurring revenue streams and expanding margin, based on good processes and valuing our intellectual property. We will continue to increase our product range through development or licensing agreements for world-class products and continue to expand the markets in which we operate.
Our team continues to focus on achieving strong results for our shareholders. This has been a testament to their commitment to the company and exceptionally hard work, which I thank them for. Let me assure you that while this year did not deliver the financial result we had expected, the team at EGL continued to work diligently, with integrity on behalf of our shareholders and will continue to do so into the future.
Jason Dixon
CEO, The Environmental Group Limited
Financial Position
FY26 revenue was broadly stable at $112 million, while EBITDA before significant items was $8.7 million. Although this result was below our expectations, it reflects a year in which external disruption and the implementation of the Groupwide ERP system affected project delivery, costs and operational performance. Significant items included the non-cash impairment of Airtight, ERP remediation, site relocation, restructuring, foreign exchange and historical project costs.
Importantly, the Group enters FY27 with stronger foundations. Recurring revenue increased to 55.3% of Group revenue, providing greater earnings resilience and reducing reliance on larger projects. The consolidation of sites, strengthened leadership team and remediation of the principal ERP issues are expected to support more consistent execution, improved processing and better customer outcomes.
During the financial year ended 30 June 2026, the Group did not comply with certain financial covenants associated with its banking facility. As a result, the lender obtained the contractual right to demand immediate repayment of amounts outstanding under the facility. Subsequent to year end, the lender has not exercised this right and has confirmed its ongoing support for the Group and the continuation of the facility. The Group continues to work closely with its lender and remains focused on improving operating cash flows and reducing debt levels.
Our financial priorities are clear: convert the strength of our service and aftermarket businesses into sustainable earnings, maintain disciplined project and cost management, improve margins and selectively invest in products, capabilities and markets that support long-term growth. Together, these actions provide a solid platform to rebuild profitability and create enduring value for shareholders while advancing the Group’s purpose of delivering practical environmental and energy solutions for a more sustainable future.
Case Studies
Bypass Exhaust System
Pelican Point
Adelaide, South Australia
The Environmental Group’s purpose is to engineer a sustainable future. At Pelican Point, that purpose was brought to life through the design, procurement, manufacture, installation and commissioning of a 350-tonne bypass exhaust system built to improve plant flexibility, extend operational resilience and support a more responsive energy market.
Dokon Horizontal Baler
Kadant PAAL
Eastern Creek, New South Wales
In FY26, The Environmental Group delivered an exspansive upgrade to a major resource recovery facility in NSW, helping increase processing efficiency and support Australia’s transition to a circular economy.
A Foundation for Future Growth
Bypass Exhaust System, Pelican Point,
Adelaide, South Australia
Building long-term performance in South-Australia
The Environmental Group’s purpose is to engineer a sustainable future. At Pelican Point, that purpose was brought to life through the design, procurement, manufacture, installation and commissioning of a 350-tonne bypass exhaust system built to improve plant flexibility, extend operational resilience and support a more responsive energy market.
Delivered for Engie in Adelaide, the project required the installation of a diverter damper bypass stack between the GT11 Gas Turbine and its associated Heat Recovery Steam Generator. With a full control philosophy designed to support both open cycle and closed cycle operating modes, the solution enables the plant to transition between modes without interrupting power generation supply.
Positioning for Future Growth
In FY26, The Environmental Group Limited continued to strengthen its position as a leader in environmental and energy efficiency solutions. One of the standout milestones this year was the successful integration of Advanced Boilers & Combustion (Advanced) into our business – a move that has already begun delivering measurable value to our clients and stakeholders.
The acquisition of Advanced has strengthened our capability to support Australian industry with high-performance combustion solutions that aim to reduce emissions, improve efficiency and assist clients in aligning with the nation’s decarbonisation objectives. Bringing Advanced into The Environmental Group has added new depth to our technical offering and opened up fresh opportunities for collaboration, innovation 30 | and long-term client partnerships.
The integration of Advanced aligns perfectly with our long-term strategy. As Environmental, Social and Governance (ESG ) requirements become more stringent and energy costs continue to rise, the demand for efficient, low-emission combustion systems is growing rapidly. By combining Advanced’s deep combustion expertise with the infrastructure, resources, and reach of The Environmental Group – particularly our EGL Energy division – we are uniquely positioned to meet this demand.
Our clients now benefit from a comprehensive energy and emissions solution: from advanced boiler and burner systems to performance audits, plant upgrades, maintenance and compliance services.
Long-Term Value
For investors, the project demonstrates the Group’s ability to convert specialist engineering capability into long-term value. The 350-tonne bypass exhaust system was designed as a durable, integrated asset that improves plant flexibility, supports more responsive energy generation and creates revenue capture opportunities for the customer over its operating life.
The project also strengthens the Group’s future foundations by showcasing disciplined execution across engineering design, procurement, manufacturing, construction and commissioning. By safely delivering a complex solution built for long-term performance, the Group reinforces its position as a trusted partner in sustainable industrial infrastructure.
Energy Transition
As renewable generation continues to reshape Australia’s energy system, flexible generation assets play an important role in supporting reliability and market responsiveness. By improving the plant’s operability and enabling faster response to changing energy market conditions, the Pelican Point bypass exhaust system contributes to a more adaptable energy infrastructure platform.
For investors, the project highlights the Group’s capability to deliver technically complex infrastructure solutions that are aligned with long-term market needs. It reflects a disciplined approach to growth: combining specialist expertise, safety, project execution and innovation to solve critical challenges for customers while building enduring capability within the business.
Outcomes
- Delivered a 350-tonne bypass exhaust system engineered for long-term operational performance.
- Enabled greater plant flexibility across open cycle and closed cycle operating modes without interruption to power generation supply.
- Strengthened existing foundations to support a larger, more capable system and improve asset resilience.
- Integrated engineering, procurement, manufacturing, construction and commissioning across a multi-location delivery model.
- Supported the Group’s mission by safely delivering a pivotal solution that contributes to cleaner, more adaptable energy infrastructure while generating long-term value.
Sustainability in Action
Enhancing Resource Recovery at Eastern Creek
In FY26, The Environmental Group delivered a major upgrade to a leading resource recovery facility in NSW, helping increase processing efficiency and support Australia’s transition to a circular economy.
The project included the installation and commissioning of a new Kadant PAAL Dokon Horizontal Baler, together with cross-wrap upgrades, weighing and labelling systems, and associated conveying equipment. Designed for Refuse Derived Fuel (RDF) applications, the new system can process up to 39 tonnes per hour and produce up to 50,000 tonnes annually, improving both throughput and bale quality.
By enabling more efficient handling and transport of recovered materials, the upgrade supports greater resource recovery and reduces reliance on landfill. The Kadant PAAL Dokon baler is recognised globally as a leading solution for RDF processing, providing Australia’s Industries with a reliable platform for future growth.
Delivered on time and under budget, the project demonstrates how advanced waste-processing technology can create both environmental and operational benefits, helping organisations recover more value from waste while supporting sustainability objectives.
Project Highlights
Location: NSW, Australia
Capacity: 39 tonnes per hour
Annual Throughput: Up to 50,000 tonnes
Outcome: Improved resource recovery efficiency & processing capacity
Achievement: Delivered on time and under budget
FY26 Sustainability Impact
Supporting Australia’s circular economy through advanced waste-processing technology that improves resource recovery, reduces landfill reliance and enables the efficient production of RDF.
The Environmental Group remains committed to creating long-term value by building from strong foundations: responsible business practices, disciplined governance, sustainable innovation and practical actions that support our customers, people and communities. Our road to sustainability is a staged journey — maintaining the systems and standards that underpin our business, strengthening the base for reliable measurement and reporting, and using that platform to grow our impact over time.
During FY26, we continued to embed Environmental, Social and Governance (ESG) principles into day-to-day operations through measurable objectives, clearer accountability and improved performance targets across the Group. This work reflects a foundation-based approach: protecting the essential elements already in place, establishing a more consistent data and reporting base through our newly integrated ERP platform, and positioning ESG considerations as part of strategic decision-making for future growth.
Our approach recognises the role our business subsidiaries play in helping customers reduce emissions, improve environmental performance and operate more sustainably. Through clean air solutions, waste-toresource technologies, industrial efficiency and environmental compliance, we are building a pathway from strong operational foundations to measurable environmental outcomes, supporting long-term value creation for shareholders and broader positive impact.
Sustainability Strategy: Building the Road Ahead
- Maintained and strengthened the foundations of ESG performance through improved quality, consistency and transparency of Group-wide reporting systems.
- Established a more solid base for future Australian sustainability reporting through stronger governance, risk management and performance monitoring processes.
- Enhanced supply chain governance through ongoing supplier assessments, completion of the Group’s inaugural Modern Slavery Declaration, and the appointment of an experienced Procurement Lead to strengthen procurement oversight, supplier performance and risk management.
- Continued integrating sustainability considerations into innovation, product development and operational decision-making, supporting growth from a stronger operational base.
- Improved business reporting and data visibility through ongoing ERP implementation and process improvements, creating a stronger foundation for future sustainability performance measurement, reporting and impact tracking.
- Expanded workforce engagement, safety and training programs to support capability, resilience and long-term organisational growth.
We seek to reduce our environmental footprint while developing technologies that deliver measurable environmental benefits for our customers & communities.
We invest in a safe, inclusive and high-performing workplace by strengthening wellbeing, building capability and empowering our people to support sustainable growth.
We maintain strong governance practices that support transparency, ethical conduct, risk management and long-term value creation.
Environment
Environmental Innovation: Building Practical Pathways
- Continued advancement of PFAS extraction and ammonia stripping technologies.
- Waste management projects delivered to support landfill diversion and resource recovery outcomes.
- Ongoing development of energy-efficient filtration and emissions control solutions.
Resource Efficiency: Strengthening the Base
- Established targets to reduce electricity consumption across all facilities by 5% year on-year, normalised for workforce levels.
- Introduced Group-wide monitoring of paper and toner usage, with a FY27 reduction target of 5%.
- Maintained recycling systems across all EGL sites.
Sustainable Product Design: Growth Through Innovation
- Continued design optimisation initiatives focused on reducing material usage and manufacturing waste.
- Product redesign projects delivered improvements in material efficiency and reduced embodied energy.
Sustainable Operations: Foundations for Future Impact
- Commenced assessment of solar installation opportunities across suitable facilities.
- Continued transition planning toward lower emission fleet vehicles, including hybrid and electric alternatives.
- Established sustainable procurement awareness initiatives for employees involved in purchasing decisions.
Environmental performance is a core part of our road to sustainability. Our focus is to maintain effective environmental management systems, build a stronger base of operational data and practical improvement initiatives, and use that foundation to reduce impacts across our operations while helping customers achieve their sustainability objectives.
Health, Safety and Wellbeing:
Maintaining the Core Foundation
- Continued focus on achieving zero major injuries and incidents.
- Ongoing engagement with Health and Safety Representatives across the Group.
- Delivery of regular safety communications, workplace inspections and HSEQ engagement activities.
- Environmental and emergency preparedness training completed across multiple business units.
Diversity and Inclusion
- Continued advancement of gender diversity initiatives, including Board representation.
- Development of workforce data and reporting to support future diversity, equity and inclusion targets.
- Ongoing review of gender equality objectives aligned with WGEA requirements.
Employee Engagement:
Strengthening Connection and Resilience
- Fostered a positive and inclusive workplace culture through a range of employee engagement initiatives, including regular social events, team-building activities and celebrations that encouraged wellbeing, collaboration and connection across the Group.
- Continue to provide flexible work arrangements that enable employees to meet customer needs while maintaining operational effectiveness.
- Continued focus on mental health, wellbeing and employee assistance programs.
- Enhanced communication through regular workforce engagement initiatives and business updates.
Learning and Development: Building Capability for Growth
- Extensive investment in professional, safety and on-the-job training programs.
- Internal development and promotion pathways strengthened to support workforce capability.
Our people are central to sustaining the business for the long term. We are committed to maintaining a safe and respectful workplace, establishing a stronger base for capability and engagement, and supporting employees to grow, develop and contribute to future impact.
Governance
1 Laying Solid Foundations for Management and Oversight
We have clearly defined the roles and responsibilities of the Board and executive management, ensuring a structured delegation of authority. Regular performance evaluations were conducted to assess and enhance the effectiveness of both governance and operational leadership.
2 Structuring the Board to Be Effective and Add Value
Our Board composition reflects a balanced mix of skills, experience and industry knowledge. We undertook a skills matrix review and succession planning to ensure the Board remains well-equipped to guide strategic direction and deliver long-term value.
3 Instilling a Culture of Acting Lawfully, Ethically and Responsibly
We reinforced our commitment to ethical conduct through updated codes of conduct, mandatory compliance training and regular communication of our core values. Leadership continues to model and promote a culture of integrity across all levels of the organisation.
4. Safeguarding the Integrity of Corporate Reports
Robust internal controls and verification processes were maintained to ensure the accuracy and reliability of all corporate disclosures. Our Audit and Risk Committee provided independent oversight of financial reporting and compliance.
5. Making Timely and Balanced Disclosure
We reinforced our commitment to ethical conduct through updated codes of conduct, mandatory compliance training and regular communication of our core values. Leadership continues to model and promote a culture of integrity across all levels of the organisation.
6. Respecting the Rights of Security Holders
We enhanced shareholder engagement through timely updates, accessible communication channels, and digital platforms that support participation in meetings and voting. Feedback mechanisms were also strengthened to better understand and respond to investor concerns.
7. Recognising and Managing Risk
A comprehensive risk management framework was reviewed and updated during the year. We conducted regular risk assessments and scenario planning to address emerging threats and ensure business resilience.
8. Remunerating Fairly and Responsibly
Our remuneration strategy is designed to attract and retain high-calibre directors and executives. It aligns performance incentives with long-term shareholder value and incorporates ESG and risk management objectives.
Strong governance underpins every stage of our sustainability journey. The Environmental Group is committed to maintaining disciplined corporate governance, ethical conduct, risk management and regulatory compliance, while strengthening the systems and oversight needed to support future ESG reporting, growth and impact.
The following persons were Directors of The Environmental Group Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:
Ms Lynn Richardson
Chair (Non-Executive)
Mr Michael Constable
Independent Director (Non-Executive)
Chair of Audit and Risk Committee
Mr Vincent D’Rozario
Independent Director (Non-Executive)
Ms Lucia Cade
Independent Director (Non-Executive)
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the ‘Group’) consisting of The Environmental Group Limited (referred to hereafter as the ‘Company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2026.
Ms Lynn Richardson
Chair (Non-Executive)
Appointed to the Board: 21 May 2015
Elected Chairman: 23 November 2017
Ms Lynn Richardson is an accomplished non-executive director known for enhancing shareholder value through fostering a positive corporate culture, driving innovation and achieving strategic objectives. With extensive governance experience, including nine years with ASXlisted companies, Ms Richardson has successfully guided the company through a significant growth phase and has demonstrated exceptional leadership during multiple acquisitions.
Ms Richardson’s broad expertise spans ASX-listed organisations, not-for-profit entities and government boards.
A graduate of the Australian Institute of Company Directors, Ms Richardson possesses an MBA from the Australian Graduate School of Entrepreneurship and postgraduate qualifications in professional accounting and educational research from the University of Melbourne. Her 20-year career is marked by a dedication to continuous improvement and a passion for entrepreneurial leadership.
Before becoming Chair, Ms Richardson served on the executive committee of Baltec IES, where her strategic leadership significantly contributed to the company’s growth.
Mr Michael Constable
Independent Non-Executive Director Chair of Audit and Risk Committee
Appointed to the Board: 24 August 2023
Mr Michael Constable was appointed to the board as a non-executive director in August 2023. Michael has significant financial management experience and board exposure gained within large ASX-listed companies over the last 20 years. Michael is a Chartered Accountant who has had senior executive finance roles within Nylex and Programmed Maintenance Group and was CFO of Tox Free Solutions Ltd. for over 10 years. Michael was also CFO of Millennium Services Group Ltd. for 4 years.
Michael’s industry experience spans labour and equipment hire, industrial services, waste management and contracting businesses, and he has had significant experience in high-growth environments. Michael has developed and successfully executed business organic and inorganic growth strategies, governance, risk management, equity and debt funding initiatives, and has driven significant shareholder value.
Mr Vincent D’Rozario
Independent Non-Executive Director
Member of the Audit and Risk Committee
Appointed to the Board: 9 March 2021
Vincent D’Rozario is a senior executive and non-executive director with over 25 years of experience in engineering, resources and aviation across ASX-listed and global companies. He is currently Chief Operating Officer of Austin Engineering Ltd (ASX:ANG), leading global operations for a mining equipment manufacturer, and Non-Executive Director at Environmental Group Limited (ASX:EGL), supporting strategic growth and governance.
Vincent’s executive career includes senior leadership roles with CHC Helicopter, Aker Solutions and Jacobs, where he managed large-scale operations, capital projects and business transformations across Asia-Pacific. He has extensive experience in operational turnarounds, international expansion, and building high-performance teams in safety-critical, capital-intensive industries.
He brings strong expertise in corporate governance, ESG, M&A and stakeholder engagement, with a proven track record of delivering value in both growth and restructuring environments. His board contributions reflect a pragmatic Nil Nil Nil and disciplined approach to risk, strategy and long-term value creation.
Vincent holds a Bachelors Degree in Electrical Engineering and has completed the Australian Institute of Company Directors course (AICD).
Ms Lucia Cade
Independent Non-Executive Director
Member of the Audit and Risk Committee
Appointed to the Board: 26 September 2024
Lucia is an experienced non-executive director and chair with professional engineering and commercial executive experience. Over 20 years her director portfolio has spanned utilities, infrastructure, waste recycling, advanced high-tech manufacturing, renewable energy research and investment in the private, listed and government sectors.
Lucia has a focus on board leadership that creates value through business growth, delivering both sustainable financial and societal impact, and that delivers value to customers and creates places where people want to work.
Prior to becoming a non-executive director, Lucia held engineering, executive and advisory roles in infrastructure, utilities and professional engineering services, working in global technical services, listed companies, significant government organisations and private enterprises. Lucia is a Fellow of AICD and of Engineers Australia.
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Mr Andrew Bush has held the role Company Secretary since 1 July 2017. Andrew is a Fellow Certified Practising Accountant, Associate Member of the Institute of Chartered Management Accountants.
Ms Kate Goland of CSB Corporate Services was appointed joint Company Secretary on 27 October 2022. Kate is a BCom, CPA and a GIA (Affiliate).
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Review of operations and material business risks
Please refer to the Review of Operations report (page 18) for the operating and financial review, including the material business risks.
Matters subsequent to the end of the financial year
No matter or circumstance has arisen since 30 June 2026 that has significantly affected, or may significantly affect the Group’s operations, the results of those operations, or the Group’s state of affairs in future financial years.
Likely developments and expected results of operations
In the opinion of the Directors’, no other significant changes, not otherwise disclosed in this report or the consolidated financial statements, occurred in the state of affairs of the Group during the financial year under review.
Environmental regulation
The Group’s operations may have an environmental impact. Where the Group undertakes site work it is typically incumbent upon the Group to address environmental issues in relation to those sites. This usually involves the preparation and implementation of an Environmental Management Plan for the site. Activities of this nature and environmental issues generally are addressed by and carried out under The Environmental Group Management System.
No significant environmental issues were reported or recorded on any EGL sites during the financial year and the Group met all its obligations in this area.
Contact
The Environmental Group Limited
Suite 2.01, Level 2/315 Ferntree Gully Rd,
Mount Waverley, Victoria, 3149, Australia
Phone: +61 3 9541 8699
Email: admin@egl.com.au
Mount Waverley, Victoria, 3149, Australia
Phone: +61 3 9541 8699
Email: admin@egl.com.au
Shareholding Enquiries
Level 12, 225 George Street,
Sydney, NSW 2000
Web: www.boardroomlimited.com.au
Email: enquiries@boardroomlimited.com.au
Sydney, NSW 2000
Web: www.boardroomlimited.com.au
Email: enquiries@boardroomlimited.com.au
Contact
The Environmental Group Limited
Suite 2.01,
Level 2/315 Ferntree Gully Rd,
Mount Waverley, Victoria, 3149, Australia
Phone: +61 3 9541 8699
Email: admin@egl.com.au
Shareholding Enquiries
Level 12, 225 George Street,
Sydney, NSW 2000
Web: www.boardroomlimited.com.au
Email: enquiries@boardroomlimited.com.au
Sydney, NSW 2000
Web: www.boardroomlimited.com.au
Email: enquiries@boardroomlimited.com.au
Download the full FY26 Annual Report
Explore The Environmental Group’s FY26 performance, strategic progress and outlook.
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