Kelly Partners Group Revenue Up 18% to $159.2M on Six Acquisitions

Kelly Partners Group Holdings (ASX: KPG) lifted revenue 18.2% to $159.2 million for the year through June, powered by six acquisitions that added $20.6 million in top line. Underlying attributable earnings rose 18.9% to $10.8 million, and owner earnings climbed 18.4% to $10.0 million, pushing earnings per share on that basis up 18.0% to 23.8 cents.

Acquired revenue accounted for 15.3 percentage points of the group's $24.6 million year-on-year revenue increase. Organic growth contributed 2.9 percentage points, or 4.5% after stripping out the impact of office consolidations and the exit of unprofitable clients. The firm said the adjusted rate showed a stronger underlying trend.

The US businesses now represent about $25.0 million in revenue, roughly 15% of the group total. That bolsters Kelly Partners' strategy of building a broader international accounting platform. The six acquisitions spanned the US, Australia, and the Philippines, with estimated combined annual revenue between $18.7 million and $22.2 million. Annualised group revenue after all completed deals stood at $164.2 million.

Underlying EBITDA before lease-accounting effects rose 16.8% to $40.2 million, with the operating businesses holding an EBITDA margin of 28.4% versus 28.3% a year earlier. The Australian operating businesses generated a 31.9% EBITDA margin, up from 30.5%. The US businesses recorded 8.1%, and the Ireland operation 40.5%.

Parent-level investment increased to about $5.0 million, or 3.1% of revenue, as Kelly Partners continued spending on central capabilities, people, brand, and digital infrastructure to support further expansion.

“Our clients over the next 25 years are all going to have to earn a return on a global basis and will need their accountants to help them operate in this new global world,” chief executive officer Brett Kelly said. “To that end, we have been able to grow our Australian business to $100m+ revenue and we look to expand our international presence to the US and the UK, where we see significant opportunities exist.”

Cash flow from operating activities before lease-accounting effects increased 30.1% to $32.4 million, with cash conversion reaching 104.9% compared with 99.8% a year earlier. Group net debt rose 21.1% to $70.7 million as borrowings funded acquisitions, fitouts, and partner buy-ins. Net debt to underlying EBITDA increased from 1.42 times to 1.52 times.

Kelly Partners ended the year with 711 team members and 105 partners across 43 operating businesses. Revenue per head rose 10% to $224,000. Its Partner-Owner-Driver model has underpinned 83 partnerships since inception and remains central to the programmatic acquisition strategy. The Philippines operation added seven locations and more than 1,150 seats providing global talent to the group. Kelly Partners now services about 8% of McDonald's franchisees in the US and roughly 10% in Australia.

The group plans to pursue an international listing, the company said. It also aims to raise long-dated debt and introduce a dual-class share structure.