How Will EPX’s UK Acquisition Shape Its Growth Amid Rising Losses?

Financial Performance Highlights

EPX Limited, a provider of building energy management solutions, announced its preliminary final results for the year ended 30 June 2025. The company reported a 17.2% increase in revenue to $15.27 million, reflecting growth in contracted sites and recurring revenue streams. Despite this top-line growth, the net loss after tax widened by 18.7% to $5.75 million, driven by ongoing investments and operational costs.

Underlying EBITDA, a key measure excluding one-off items such as acquisition and restructuring costs, showed a marked improvement with losses narrowing by 58% to $0.64 million. This suggests operational efficiencies and cost control measures are beginning to take effect, even as the company continues to invest in growth initiatives.

Strategic Acquisition and Market Expansion

During the year, EPX acquired the technology and related business assets of Coda Cloud Limited, a UK-based company specializing in energy management for transport depots, train stations, and other energy-intensive sites. The acquisition, completed in October 2024, added over 200 sites to EPX’s portfolio and opened new opportunities within the UK rail network, which comprises over 2,000 mainline stations.

The purchase consideration included cash, shares, and contingent performance-based payments, underscoring EPX’s commitment to expanding its technological capabilities and geographic footprint. Early contracts post-acquisition have already generated an initial annualised contract value exceeding $500,000.

Capital Raising and Growth Outlook

To support its growth strategy, EPX successfully raised $3 million in equity during the financial year through placements, followed by a further $2 million raised in August 2025. These funds are earmarked for sales expansion, further mergers and acquisitions, and technology enhancements.

Key operating metrics improved, with Annualised Contract Value (ACV) rising to $17.6 million and Annualised Recurring Revenue (ARR) increasing to $15.5 million. The company added 193 new contracted sites, bringing the total to 740, signaling strong market demand and customer acquisition momentum.

Operational and Risk Considerations

EPX continues to focus on operational efficiency, including departmental restructuring and the rollout of a new ERP system, which became fully operational in July 2024. The company also exited its Hong Kong office, consolidating operations to better align with market conditions.

Risks highlighted include macroeconomic uncertainties across its key markets (Australia, UK, Middle East), competitive pressures, cybersecurity threats, and the challenge of meeting guaranteed energy savings for clients. The directors remain confident in the Group’s ability to continue as a going concern, supported by positive operating cash flows and capital reserves.

Governance and Remuneration

The report provides detailed disclosures on executive remuneration, including fixed and variable components aligned with performance metrics such as ACV growth and operational productivity. Share-based payments remain a key incentive mechanism, with options granted to executives and employees to foster alignment with shareholder interests.

No dividends were declared for the year, reflecting the company’s focus on reinvestment and growth.