From my brief read of this update, CMP integration is still running slightly behind. That's my only concern so far.

Overall a solid, if unspectacular update from VYS. They came in line with their guidance of ~$10m 2H PBT, but was a slight miss to my expectations given I thought it was too conservative. Looking through the segment breakdowns, the Industrial segment came in a bit stronger, Advisory a bit weaker and corporate costs a bit higher (mostly due to VAM development which is easy to deal with).

As @edgescape said the CMP integration running behind schedule and early performance below expectations is the main concern. James and the team at VYS have acquired exceptionally well in the past with Yield Test Pumping, Project Engineering and Waste Water Services all knocking it out of the park very quickly after being rolled into the broader VYS water services ecosystem.

However, those three acquisitions were all small bolt-ons. All were acquired for <$7.5m and fit into existing VYS segments nicely. CMP is a much bigger swing though, $24m cash and up to another $16m in earn-outs. It also dominates VYS's Advisory segment, with $26.4m revenue in FY24 compared to VYS's $4.7m. Commentary that integration is having some teething issues and early underperformance against expectations is worth a raised eyebrow and closer monitoring in future updates.

That said, the other segments are humming nicely and it sounds like we are getting closer to firmer details on VAM with potential quantities and pricing being known.

Thanks @Wini

I have not had time to post much here.

I had look at the pro forma result and it appears the growth in existing businesses have slowed a bit although i haven't really looked close and vys only has a brief summary

The other thing is the WA water project is in the same location as the Degrey gold deposit which got bought by NST. There appears to be a court case about it. Will find the link and post it

The DEG/NST appeal is interesting as it appears VYS's partner is trying to litigate its first customer into existence. Savvy if they manage to pull it off.

Article in the AFR below

https://www.afr.com/companies/mining/wa-mega-gold-mine-faces-challenge-from-traditional-owners-20250722-p5mgxy

Basically the traditional owners are appealing against the EPA consent for the mine at the Hemi Project because they are concerned the wastewater discharge plan will impact local waterways.

They've shuffled Tanya Plibersek sideways into another portfolio since she blocked RRL's McPhillamys gold project in NSW @edgescape so I'm wondering what the new Australian federal Minister for the Environment and Water, Murray Watt, is likely to do in this circumstance - hopefully the Hemi case gets viewed on its own merits. McPhillamys was on prime farmland that is being profitably farmed. Hemi looks like this:

The fact that the area is mostly low growing scrub - mostly low bushes with a few trees - doesn't change the argument or claim from the indigenous traditional land owners, however there was more than that at play in the McPhillamys case, and in the case of Hemi, it should be more straightforward and less political I would have thought. And relatively easy to plan for fully self-contained TSFs and other waste stream treatment options that would avoid the possibility of groundwater contamination.

NST paid $5 Billion for De Grey Mining to get Hemi, so I can't see them refusing to modify the old wastewater discharge plans. They'll do whatever they have to do to get this thing into production. Including spending a lot more money on waste stream management if they have to.

Hemi won't get built overnight, but it will happen, probably in 5 to 10 years from now I'm guessing. NST have their hands full right now with the KCGM expansion where that Fimiston mill next to Kal is going to be producing more than double what it used to, when that expansion is complete in a couple of years' time - and the mill is running at its new nameplate capacity, which will be 27 million tonnes per annum (Mtpa), was previously 13 Mtpa.  BTW, while a 27 Mtpa mill sounds absolutely massive, and it is, Newcrest announced back in 2019 that they were expanding Cadia in NSW to 35 Mtpa (now owned by Newmont) and Newmont's Boddington gold mine in WA is now running at 40 Mtpa according to their website.

Anyway, it will be interesting to see if Murray Watt intervenes with Hemi like his predecessor did with Regis' McPhillamys gold project.

https://minister.dcceew.gov.au/watt

I don't think its a good comp as RRL was nixed on a section 10 where as NST/DEG is not via a section 10. RRL had passed everything too so being farmland was a hurdle but was passed. It was KO'd by a zealot minister listening to a zealot indigenous person. In fact, the native group had given consent and support for the project as it passed all other prior native processes.

In NST/DEG case, its using enviro concerns to stop usage as they're competing for water rights to turn water into a profitable commodity in parts of the Pilbara.

I think the question is what's more scarce or important. Gold or clean water?

But when I see Sydney water not fixing the water leak on the road near our area making driving tricky maybe there's enough water out there?

Anyway I have feeling the Vysarn share high price multiple is partly from the fact it could be a future provider of water in pilbara. If it was just doing services vys should be lower.

I understand that Hemi is a completely different situation to McPhillamys @BkrDzn however Murray Watt is the Minister for the Environment and Water, and you've just said:

"In NST/DEG case, its using enviro concerns to stop usage as they're competing for water rights to turn water into a profitable commodity in parts of the Pilbara"

- so my point is that the new federal Minister for the Environment and Water may (once again) have input into a decision concerning either how a new mine is built, or indeed whether it gets built at all.

And that NST have more options with Hemi than RRL did with McPhillamys, both because NST have time on their side, and because they are less land constrained and they don't have as much organised local opposition to the project. The issues are different, but they both come down to water. In McPhillamy's case there was also the idea that there may have been some items of cultural significance in the area where RRL planned to build their TSF, but the main issue was the possibility of the contamination of the headwaters (source waters) of the Belubula River which itself held great cultural significance for at least one group of indigenous traditional land owners (and yes, I understand the local indigenous groups differed on that), and Plibersek blocked RRL from building their TSF where they had planned to build it on that basis. RRL said they had zero other options for the TSF therefore the project had been killed by that decision, and my understanding is that Regis are taking legal action to try to have that decision overturned.

Interestingly, since McPhillamys was killed off by Plibersek, Regis' share price had been on quite the run because the market actually liked the idea of Regis not having that massive capex spend looming over them any more, particularly as the project was looking (based on Regis own numbers) to be more expensive to build with a longer payback period and would require a higher gold price for longer than when it was originally proposed years earlier. Basically higher build costs and a higher projected AISC.

But Hemi is a totally different kettle of sardines, agreed. And Hemi will get built. You don't spend 5 Billion dollars to get something and then NOT build it. Different issues but water is still central to both. In Hemi's case, access to water, and what they will do with waste water and tailings. And in that respect at least, McPhillamys issues ended up also being about tailings (their TSF location) and their cost blowouts were in part because of millions of extra dollars they had agreed to spend to pump water to the project rather than source water from underground at the site (land) that the plant was going to built on.