AJ Lucas Group (ASX:AJL) Limited has released its quarterly activities and cash-flow report for the three months ended 30 September 2026, setting out lower revenue than a year earlier, a cash outflow from operations and an estimate that its available funding covers about 2.6 quarters at the current rate of outflow. The company, which provides drilling services in Australia and holds onshore conventional gas interests in the United Kingdom, said the figures are unreviewed.

Quarter performance

Revenue for the quarter was A$31.4m, down from A$35.7m in the prior corresponding period. The company said this represented 26 per cent of its FY26 full-year revenue. Australian operations produced EBITDA of A$6.3m, compared with A$7.9m a year earlier. Group EBITDA was A$6.0m, against A$32.6m in the comparable quarter; that earlier figure included a A$25.9m settlement relating to its UK business, and the company said that excluding the settlement the prior-year figure was A$6.7m.

The report also draws a comparison with the immediately preceding quarter, when the company recorded revenue of A$24.0m and an EBITDA loss of A$1.2m. It attributed that weaker result to geotechnical problems at a key client's longwall operation.

Cash flow and liquidity

Operating cash flow was an outflow of A$4.6m, with customer receipts of A$29.1m set against staff costs of A$14.1m and administration and corporate costs of A$18.5m. Investing outflows were A$3.2m, mainly for property, plant and equipment, while financing provided A$5.5m as the group drew A$35.2m of borrowings and repaid A$29.6m. Closing cash was A$5.9m, including A$0.3m held in trust.

Combined with A$6.4m of unused facilities, the company calculated available funding of A$12.3m. On its own estimate that equates to a runway of 2.6 quarters if operating outflows continue at the current rate. No new funding steps were disclosed in the report, and the company gave no formal earnings guidance.

Debt structure

Total facilities stand at A$104.5m, of which A$98.1m is drawn. The senior syndicated facility, provided by Balmain, has a A$50m limit, is a revolving asset-based facility secured by a first-ranking charge over group assets and matures in May 2027. It carries interest of 12.3 per cent, up from 12.0 per cent at June 2026, is classified as current, and the company reported that covenants were met.

The second major component is a subordinated loan from Kerogen, which the report describes as a 56.7 per cent shareholder and therefore a related party. It totals US$49.4m, made up of US$42.3m of principal and US$7.1m of accrued interest. Interest accrues at 16 to 18 per cent a year, falling to 9 to 10 per cent if cash interest is paid before 31 January 2027. Under the extension agreed in June 2026 the loan matures on 30 September 2027.

United Kingdom interests

In the UK, the company said the hydraulic fracturing moratorium remains in force. It said it is progressing conventional gas opportunities on its onshore licences, which it described as unaffected by the moratorium, although it gave no timetable or financial detail for those plans. Site restoration continues at Preston New Road in Lancashire, and the Elswick conventional gas well continues to generate electricity revenue.

What to watch

The report sets out several dated markers. The deadline for paying cash interest on the Kerogen loan at the lower rate falls on 31 January 2027, the senior facility matures in May 2027, and the Kerogen loan matures on 30 September 2027. With the senior facility classified as current, how the company approaches refinancing or extension ahead of May 2027 will be a central question for the balance sheet.

The cash-flow statement also contains a labelling quirk: the net increase in cash line shows 8,293, which appears to match the opening balance rather than a movement, so the line looks mislabelled. Other figures in the report reconcile on that basis.