Verbrec Limited (ASX:VBC) provides engineering, asset management, operations and maintenance, and training to the energy, mining, infrastructure and defence industries in Australia, New Zealand, PNG and the Pacific Islands. The company has released its FY25 full-year result delivering revenue of $85.6m (in-line with RaaS’s forecast of $85.4m) and EBITDA (underlying) of $8.8m (11.4% ahead of RaaS’s forecast). The EBITDA upside surprise was driven by stronger-than-expected gross margins in both the Engineering and Training businesses, and ongoing cost discipline. Well-flagged macro headwinds, including tariff concerns, the federal election and Cyclone Alfred, delayed some industry project decisions in FY25, resulting in revenue deferral into FY26. However, the company appears to have navigated the environment well resulting in its strongest gross profit and adjusted EBITDA margins in more than a decade. Solid operating cash flow has allowed VBC to reduce debt and return to a net cash position of $2.3m. The financial position of the business has improved materially over the past two years and prompted management to put acquisitions back on the growth agenda. A small final dividend of 0.1 cps has been declared; its first since 2013. The operating environment now appears to be recovering with management stating, “capex decisions are being made [and things are beginning to] ramp up”. The company didn’t provide numerical guidance, but work-in-hand is up 10% to ~$44m in the past six months and we expect momentum to grow through FY26 with revenue accelerating into the second half. We reduce our revenue forecasts marginally, offset by expanded GP and EBITDA margins. As such, our DCF valuation increases from $0.32/share to $0.34/share, offering material potential share price upside of 243%.