Babylon Powers Up with Strong Rental Quarter and Strategic Acquisitions

Strong Finish to FY25

Specialist mining services provider Babylon Pump & Power Limited (ASX – BPP) has closed out the 2025 financial year on a high note, reporting its strongest rental segment quarter to date. The company’s rental division saw a notable uptick in utilisation, particularly driven by increased test pumping contracts in the gold sector across Western Australia and the Northern Territory. This surge in activity validates Babylon’s strategic focus on delivering comprehensive water management solutions throughout the mining lifecycle.

Meanwhile, the maintenance segment maintained robust momentum, successfully completing major engine builds for tier-1 client Thiess. This late-quarter surge contributed to strong billing activity and a net operating cash inflow of $108,000, supported by $8.1 million in customer receipts. However, receivables rose to $6.8 million, reflecting the timing of invoicing, with management confident these will convert to cash early in FY26.

Acquisitions Set to Transform Platform

Babylon is on the cusp of completing two strategic acquisitions, Matrix Hydro Services and Blue Hire, which promise to significantly enhance its water and equipment services platform. Preparatory integration work is already underway, with assets and personnel being shared seamlessly between the businesses. These acquisitions are expected to expand Babylon’s rental fleet and customer footprint, positioning the company as a leading player in the water-focused services market as it enters FY26.

Managing Director Michael Shelby expressed optimism about the year ahead, highlighting the company’s commitment to profitability, cash generation, and shareholder value. The integration of Matrix and Blue Hire is anticipated to unlock cross-selling opportunities and drive profitable growth in high-margin rental and technical services.

Financial Discipline and Strategic Flexibility

Supporting these growth initiatives, Babylon completed a $3.5 million equity raise in June 2025, which was strongly backed by shareholders. The capital injection bolsters working capital and provides strategic flexibility as the company navigates its expansion. Babylon also maintains access to $2.4 million in undrawn finance facilities, underscoring its solid liquidity position despite the increase in receivables.

Importantly, the company has no material capital expenditure planned for early FY26, signaling a focus on leveraging existing assets and cash flow to fuel growth. Management remains vigilant on working capital discipline and cost control, particularly within the maintenance division, to sustain operational efficiency.

Looking Ahead

As Babylon transitions into FY26, the company’s priorities are clear – optimise utilisation across the expanded fleet, capitalise on synergies from recent acquisitions, and maintain a disciplined approach to cash generation and debt reduction. With a strengthened platform and growing customer base, Babylon is well-positioned to build a water-focused services business of significance in the resources sector.