Toronto, Ontario--(Newsfile Corp. - August 5, 2025) - Dexterra Group Inc. (TSX: DXT)
Highlights
Dexterra delivered strong results for the three months ended June 30, 2025, generating consolidated revenue of $249.3 million, compared to $253.6 million for the same period in 2024, with Support Services revenue growth positively impacted by continued strong activity levels, offset, as anticipated, by a decrease in ABS revenue due to a shift in business mix following the successful construction and mobilization of major contracts in Q2 2024.
Adjusted EBITDA for the three months ended June 30, 2025 was $30.0 million (2024 - $29.3 million), an increase of 2.6% over Q2 2024. The increase in Adjusted EBITDA was primarily as a result of strong camp occupancy and mix of business in ABS.
Free Cash Flow ("FCF") for the three months ended June 30, 2025 was a deficit of $3.7 million, compared to a deficit of $0.6 million for the same period in 2024 due to the seasonality of the business and higher working capital investment. Adjusted EBITDA conversion to FCF is expected to exceed 50% for the 2025 fiscal year.
Net earnings for the three months ended June 30, 2025 were $11.8 million, compared to $9.1 million for the same period last year and year-to-date net earnings in 2025 were $20.4 million compared to $5.5 million in 2024. Our continuing operations delivered a return on equity of 15%. Earnings per share from continuing operations was $0.19 in Q2 2025, consistent with Q2 2024.
On July 31, 2025, Dexterra acquired a 40% stake in privately owned, U.S.-based, facilities management provider Pleasant Valley Corporation ("PVC") for US$58.3 million, including an option to acquire the remaining 60% as early as Q3 2027. PVC offers a range of facility services including Integrated Facilities Management ("IFM") primarily to commercial and industrial clients across the United States. The PVC operating platform is a distributed model that incorporates proprietary facility management technology, a quality vendor network, as well as a strong commitment to service and partnership that supports long-standing relationships with clients including Fortune 500 companies. The investment in PVC builds on Dexterra's facilities management offering and brings increased scale and capability to the Corporation's U.S.-based facility management business platform. PVC generated in its most recent fiscal year approximately US$175 million in revenue with margins of approximately 8% with a solid new business pipeline of opportunities that will be a catalyst for future profitable growth in the U.S.
On August 5, 2025, Dexterra signed a purchase and sale agreement to acquire 100% of Right Choice Camps & Catering Ltd. ("Right Choice"), a workforce accommodation provider located in Western Canada for $67.5 million. Right Choice had approximately $75 million in annual revenues and approximately $15 million in Adjusted EBITDA in its most recent fiscal year and has a high-quality fleet of workforce accommodations and ancillary equipment that is currently underutilized. This transaction expands our business, adds capacity for long term growth, and will help Dexterra maintain its position as the leading workforce accommodations provider in Canada. The acquisition is consistent with our strategy to invest in opportunities that have high returns and will be immediately accretive to shareholders, and is expected to close, subject to normal closing conditions, on August 31, 2025.
Both of these acquisitions will be financed using our recently amended banking facility which increased the available borrowing limit to $425 million with an improved pricing grid. Our debt leverage ratio is expected to be under 1.75x of proforma Adjusted EBITDA by December 31, 2025, demonstrating our commitment to maintaining a strong balance sheet.
The Board of Directors also approved an annual dividend increase of 14% from $0.35 to $0.40 per share and declared a dividend for Q3 2025 of $0.10 per share for shareholders of record at September 30, 2025, payable on October 15, 2025. The dividend increase reflects consistent strong financial performance, robust cash flow generation, confidence in our strategy, and recent share price appreciation.
This news release contains certain measures and ratios, such as Adjusted EBITDA, Adjusted EBITDA as a % of revenue, FCF, and Return on Equity that do not have any standardized meaning as prescribed by GAAP and, therefore, are considered non-GAAP measures. The method of calculating these measures may differ from other entities and accordingly, may not be comparable to measures used by other entities. See "Non-GAAP measures" and "Reconciliation of Non-GAAP measures" of the Corporation's MD&A for the three and six months ended June 30, 2025 details which is incorporated by reference herein.
Second Quarter Financial Summary
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| (000's except per share amounts) | 2025 | 2024 | 2025 | 2024 | ||||||||
| Revenue | $ | 249,340 | $ | 253,624 | $ | 489,071 | $ | 485,519 | ||||
| Adjusted EBITDA(1) | 30,031 | 29,277 | 55,205 | 48,856 | ||||||||
| Adjusted EBITDA as a % of revenue(1) | 12.0% | 11.5% | 11.3% | 10.1% | ||||||||
| Net earnings from continuing operations(2) | 11,818 | 12,162 | 20,439 | 16,597 | ||||||||
| Net earnings(2)(3) | 11,818 | 9,080 | 20,439 | 5,512 | ||||||||
| Earnings per share: | ||||||||||||
| Net earnings from continuing operations per share, basic and diluted | 0.19 | 0.19 | 0.33 | 0.26 | ||||||||
| Total net earnings per share, basic and diluted(3) | 0.19 | 0.14 | 0.33 | 0.08 | ||||||||
| Total assets | 561,372 | 647,025 | 561,372 | 647,025 | ||||||||
| Total loans and borrowings ("Net Debt") | 93,353 | 139,770 | 93,353 | 139,770 | ||||||||
| Free Cash Flow(1) | (3,734 | ) | (585 | ) | (2,300 | ) | 10,057 | |||||
(1) Please refer to the "Non-GAAP measures" section for the definition of Adjusted EBITDA, Adjusted EBITDA as a % of revenue, and Free Cash Flow, and to the "Reconciliation of non-GAAP measures" section for the related calculations.
(2) Acquisition costs in pre-tax earnings for the six months ended June 30, 2024 were $0.4 million. Please refer to the "Non-GAAP measures" section for additional details.
(3) Net earnings for the three and six months ended June 30, 2024 included net loss from discontinued operations of $3.1 million and $11.1 million, respectively (2025 - $nil).
Second Quarter Operational Analysis
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| (000's) | 2025 | 2024 | 2025 | 2024 | ||||||||
| Revenue: | ||||||||||||
| Support Services | $ | 205,353 | $ | 200,286 | $ | 404,128 | $ | 385,826 | ||||
| Asset Based Services | 43,987 | 53,338 | 84,943 | 99,693 | ||||||||
| Total Revenue | $ | 249,340 | $ | 253,624 | $ | 489,071 | $ | 485,519 | ||||
| Adjusted EBITDA: | ||||||||||||
| Support Services | $ | 20,484 | $ | 20,499 | $ | 39,362 | $ | 35,773 | ||||
| Asset Based Services | 16,520 | 14,453 | 29,978 | 24,476 | ||||||||
| Corporate expenses | (6,973 | ) | (5,675 | ) | (14,135 | ) | (11,393 | ) | ||||
| Total Adjusted EBITDA | $ | 30,031 | $ | 29,277 | $ | 55,205 | $ | 48,856 | ||||
| Adjusted EBITDA as a % of Revenue | ||||||||||||
| Support Services | 10.0 % | 10.2 % | 9.7 % | 9.3 % | ||||||||
| Asset Based Services | 37.6 % | 27.1 % | 35.3 % | 24.6 % | ||||||||
Support Services
Revenue for Q2 2025 was $205.3 million, an increase of 2.5% over Q2 2024, and 3.3% over Q1 2025, primarily driven by strong camp occupancy at camps mobilized in Q2 2024, partially offset by lower IFM project work as expected compared to same period last year.
Adjusted EBITDA for Q2 2025 was $20.5 million, consistent with Q2 2024 and compared to $18.9 million in Q1 2025. Adjusted EBITDA margin for Q2 2025 was 10.0%, compared to 10.2% in Q2 2024 and 9.5% in Q1 2025. The increase in Adjusted EBITDA and margin compared to Q1 2025 is due to the factors mentioned above, plus continued improvement of Facilities Management margins above 6% and the mix of business. Adjusted EBITDA margins are expected to continue to exceed 9% in the long term.
For the six months ended June 30, 2025, Support Services revenues were $404.1 million, an increase of 4.7% over the same period in 2024, primarily driven by high occupancy at new camps that came on-stream in the second half of 2024 and the acquisition of CMI which was acquired on February 29, 2024. Adjusted EBITDA for the six months ended June 30, 2025 was $39.4 million, an increase of 10.1% over the same period in 2024, generating Adjusted EBITDA margins of 9.7% and 9.3%, respectively. The increase in Adjusted EBITDA and margins is attributable to the same factors.
Asset Based Services
Revenue for Q2 2025 was $44.0 million, a decrease of 17.5% over Q2 2024, primarily driven by lower volume of camp construction and installation associated with two large contracts that were mobilized in Q2 2024. Q2 2025 revenue increased 7.4% compared to Q1 2025, partially due to stronger access matting activity as utilization levels returned to over 90% by quarter end and workforce accommodations structures utilization was also over 90%.
Adjusted EBITDA for Q2 2025 was $16.5 million, an increase of 14.3% over Q2 2024 and 22.7% over Q1 2025. Adjusted EBITDA margin for Q2 2025 was 37.6% compared to 27.1% in Q2 2024 and 32.9% in Q1 2025. Adjusted EBITDA and margins were higher in Q2 2025 as a result of the change in business mix, specifically the margin differential between camp rental in Q2 2025 and camp mobilization related work in Q2 2024. Adjusted EBITDA margins in this business in the future are expected to remain between 30% to 40% depending on mix of business.
For the six months ended June 30, 2025, ABS revenues were $84.9 million, a decrease of 14.8% over the same period in 2024, primarily driven by lower camp construction and installation revenue, and lower demand in Q1 2025 for access matting sales and rentals. Adjusted EBITDA for the six months ended June 30, 2025 was $30.0 million, an increase of 22.4% over the same period in 2024, attributable to the change in business mix compared to the same period last year as described above. Adjusted EBITDA margin for the six months ended June 30, 2025 was 35.3% compared to 24.6% in the prior year.
Liquidity and Capital Resources
Net debt was $93.4 million at June 30, 2025 compared to $81.5 million at Q1 2025 and $67.9 million at December 31, 2024. The increase in debt from Q4 2024 was primarily due to the larger investment in working capital which experiences seasonal fluctuations. Adjusted EBITDA conversion to FCF is expected to exceed 50% in fiscal 2025, with Q3 and Q4 experiencing the highest conversions to FCF as a result of the seasonality of the Support Services business.
Additional Information
A copy of Dexterra's Condensed Consolidated Interim Financial Statements ("Financial Statements") for the three and six months ended June 30, 2025 and 2024 and related Management's Discussion and Analysis ("MD&A") have been filed with the Canadian Securities Regulatory authorities and are available on SEDAR at sedarplus.ca and Dexterra's website at dexterra.com. The Financial Statements have been prepared in accordance with International Financial Reporting Standards and the reporting currency is in Canadian dollars.
Conference Call
Dexterra will host a conference call and webcast to begin promptly at 8:30 a.m. Eastern Time on August 6, 2025 to discuss the second quarter results.
To access the conference call by telephone the conference call dial in number is 1-844-763-8274.
A live webcast of the conference call will be accessible on Dexterra's website at ir.dexterra.com/events-presentations by selecting the Q2 2025 Results webcast link. An archived recording of the conference call will be available approximately one hour after the completion of the call until September 6, 2025 by dialing 1- 855-669-9658, passcode 3972185.
About Dexterra
Dexterra employs more than 9,000 people, delivering a range of support services for the creation, management, and operation of infrastructure across Canada and the U.S.
Powered by people, Dexterra brings best-in-class regional expertise to every challenge and delivers innovative solutions, giving clients confidence in their day-to-day operations. Activities include a comprehensive range of integrated facilities management services, industry-leading workforce accommodation solutions, and other support services for diverse clients in the public and private sectors.
For further information contact:
Denise Achonu, CFO
Head office: Airway Centre, 5925 Airport Rd., Suite 1000
Mississauga, Ontario L4V 1W1
Telephone: (905) 270-1964
You can also visit our website at dexterra.com.
Reconciliation of non-GAAP measures
The following provides a reconciliation of non-GAAP measures to the nearest measure under GAAP for items presented throughout the news release:
Adjusted EBITDA
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| (000's) | 2025 | 2024 | 2025 | 2024 | ||||||||
| Net earnings from continuing operations | $ | 11,818 | $ | 12,162 | $ | 20,439 | $ | 16,597 | ||||
| Add: | ||||||||||||
| Depreciation and amortization | 9,692 | 8,601 | 19,270 | 16,703 | ||||||||
| Share based compensation | 2,187 | 762 | 4,165 | 1,476 | ||||||||
| (Gain) loss on disposal of property, plant and equipment | (97 | ) | (17 | ) | (68 | ) | 3 | |||||
| Finance costs | 1,973 | 3,528 | 4,032 | 7,358 | ||||||||
| Income tax expense | 4,311 | 3,915 | 7,070 | 5,593 | ||||||||
| Equity investment depreciation | 147 | 326 | 297 | 765 | ||||||||
| Restructuring and other costs(1) | - | - | - | 361 | ||||||||
| Adjusted EBITDA | $ | 30,031 | $ | 29,277 | $ | 55,205 | $ | 48,856 | ||||
(1) Restructuring and other costs for the six months ended June 30, 2024 related to the CMI acquisition.
Free Cash Flow
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| (000's) | 2025 | 2024 | 2025 | 2024 | ||||||||
| Net cash flows from continuing operating activities | $ | 3,257 | $ | 5,695 | $ | 9,124 | $ | 22,465 | ||||
| Sustaining capital expenditures, net of proceeds from the sale of property, plant and equipment and intangible assets | (894 | ) | (1,367 | ) | (1,335 | ) | (2,031 | ) | ||||
| Finance costs paid | (3,681 | ) | (3,278 | ) | (5,584 | ) | (7,210 | ) | ||||
| Lease payments | (2,416 | ) | (1,635 | ) | (4,505 | ) | (3,167 | ) | ||||
| Free Cash Flow | $ | (3,734 | ) | $ | (585 | ) | $ | (2,300 | ) | $ | 10,057 | |
Return on Equity
| Trailing twelve months ended June 30, | ||||||
| (000's) | 2025 | 2024 | ||||
| Net earnings from continuing operations | $ | 41,383 | $ | 38,790 | ||
| Average total shareholders' equity(1) | 278,498 | 283,821 | ||||
| Return on Equity | 15 % | 14 % | ||||
(1) Average total shareholders' equity is calculated as the average of beginning total shareholders' equity and ending total shareholders' equity over the period from June 30, 2024 to June 30, 2025 for 2025 and from June 30, 2023 to June 30, 2024 for 2024.
Forward-Looking Information
Certain statements contained in this news release may constitute forward-looking information under applicable securities law. Forward-looking information may relate to Dexterra's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "continue"; "forecast"; "may"; "will"; "project"; "could"; "should"; "expect"; "plan"; "anticipate"; "believe"; "outlook"; "target"; "intend"; "estimate"; "predict"; "might"; "potential"; "continue"; "foresee"; "ensure" or other similar expressions concerning matters that are not historical facts. In particular, statements regarding Dexterra's future operating results and economic performance, including return on equity and Adjusted EBITDA margins; capital allocation priorities, acquisition strategy; its capital light model, market and inflationary environment expectations, asset utilization, camp occupancy levels, its leverage, FCF, wildfire activity expectations, timing for the closing of the Right Choice acquisition, expected benefits from the Right Choice and PVC acquisitions, investments in technology, U.S. tariff impacts, and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions, including expected growth, market recovery, results of operations, performance and business prospects and opportunities regarding Dexterra. While management considers these assumptions to be reasonable based on information currently available to Dexterra, they may prove to be incorrect. Forward-looking information is also subject to certain known and unknown risks, uncertainties and other factors that could cause Dexterra's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information, including, but not limited to: the ability to retain clients, renew existing contracts and obtain new business; an outbreak of contagious disease that could disrupt its business; the highly competitive nature of the industries in which Dexterra operates; outsourcing of services trends; reliance on suppliers and subcontractors; cost inflation; U.S. tariff impacts; volatility of industry conditions could impact demand for its services; a reduction in the availability of credit could reduce demand for Dexterra's products and services; Dexterra's significant shareholder may substantially influence its direction and operations and its interests may not align with other shareholders; its significant shareholder's approximate 51% ownership interest may impact the liquidity of the common shares; cash flow may not be sufficient to fund its ongoing activities at all times; loss of key personnel; the failure to receive or renew permits or security clearances; significant legal proceedings or regulatory proceedings/changes; environmental damage and liability is an operating risk in the industries in which Dexterra operates; climate changes could increase Dexterra's operating costs and reduce demand for its services; liabilities for failure to comply with public procurement laws and regulations; any deterioration in safety performance could result in a decline in the demand for its products and services; failure to realize anticipated benefits of acquisitions and dispositions; inability to develop and maintain relationships with Indigenous communities; the seasonality of Dexterra's business; inability to restore or replace critical capacity in a timely manner; reputational, competitive and financial risk related to cyber-attacks and breaches; failure to effectively identify and manage disruptive technology; economic downturns can reduce demand for Dexterra's services; its insurance program may not fully cover losses. Additional risks and uncertainties are described in Note 23 to the Financial Statements contained in its most recent Annual Report filed with securities regulatory authorities in Canada and available on SEDAR at sedarplus.ca. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Dexterra is under no obligation and does not undertake to update or alter this information at any time, except as may be required by applicable securities law.
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