AJ Lucas Group (AJL) AI Stock Analysis

• Market Cap: AU$13.76M
• Dividend Yield: N/A
• Average Volume (3M): 889.31K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.09
• Revenue Growth: -8.48%
• EPS Growth: -2080.00%
• Country: AU
• Employees: 331
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Coal
• EPS (TTM): >-0.01
• Shares Outstanding: 1,375,729,600
• 10 Day Avg. Volume: 708,783
• 30 Day Avg. Volume: 889,307
• PEG Ratio: >-0.01
• Price to Book (P/B): -0.09
• Price to Sales (P/S): 0.05
• P/FCF Ratio: 2.34
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 43 Neutral
• Price Target: AU$0.01 ▲(10.00% Upside)

AJ Lucas Group's overall stock score is primarily impacted by its financial instability and poor valuation metrics. The company's high leverage and negative equity are significant risks. Technical analysis offers some short-term positive signals, but these are overshadowed by the negative financial and valuation aspects.

Positive Factors

High gross profit margin

A sustained gross margin above 70% indicates the group or its investee activities capture substantial value at the top line. Over months this margin provides a structural buffer against cost inflation and supports potential profitability recovery if revenues stabilise or monetisation events occur.

Asset-backed investment model (Cuadrilla exposure)

AJ Lucas’s strategic focus on realising value from its Cuadrilla stake provides structural optionality: asset sales, settlements, or production monetisation can deliver material cash inflows over months. This investment vehicle model can generate episodic but meaningful value realisation events.

Positive free cash flow to net income ratio

Positive FCF-to-net-income shows the business or its investment activities still convert losses into cash to some extent. Over a multi-month horizon this cash conversion ability supports liquidity management and creates runway to pursue asset realisations or restructure liabilities.

Negative Factors

Negative equity and high leverage

Negative shareholders' equity and high leverage are structural solvency concerns that impair financing flexibility. Over months this capital-structure weakness increases refinancing risk, raises borrowing costs, and constrains the firm's ability to execute value-realisation or growth initiatives.

Sharp decline in free cash flow growth

An almost 80% fall in FCF growth materially reduces internal funding capacity for obligations or strategic actions. Persisting low FCF growth over months erodes liquidity buffers, limits ability to invest in monetisation processes, and heightens reliance on external financing or asset sales.

Declining revenue and persistent net losses

Negative revenue growth paired with a double-digit net loss margin signals ongoing operating and profitability pressure. Structurally, sustained top-line contraction and losses reduce cash flow prospects, weaken creditor confidence, and complicate long-term value realisation from invested assets.

AJ Lucas Group Business Overview & Revenue Model

Company Description

AJ Lucas Group Limited, together with its subsidiaries, provides drilling services in Australia. The company operates in two segments: Drilling, and Oil and Gas. Its Drilling segment provides integrated professional drilling services primarily for exploration and degasification of coal mines, which includes recovery and commercialization of coal seam gas and associated services. The Oil and Gas segment engages in the exploration, development, and commercialization of unconventional and conventional hydrocarbons in the United Kingdom. In addition, the company offers engineering services, including design of wells, drilling optimisation, professional steering services, and specialised equipment for directional drilling programmes. It serves the energy, mining, and infrastructure sectors. The company was incorporated in 1993 and is headquartered in Brisbane, Australia. AJ Lucas Group Limited is a subsidiary of Kerogen Investments No. 1 (HK) Limited.

How the Company Makes Money

AJ Lucas Group generates revenue primarily through its engineering and construction services, particularly in the drilling sector, where it offers services such as pipeline installation, geotechnical drilling, and tunneling. The company also earns income from project management and consulting services provided to clients in the resources and energy sectors. Key revenue streams include contracts with government and private sector clients for large-scale infrastructure projects. Additionally, partnerships with major players in the industry, as well as participation in joint ventures, contribute to its earnings by allowing AJL to leverage shared resources and expertise to deliver complex projects.

AJ Lucas Group Financial Statement Overview

Summary

AJ Lucas Group faces significant financial challenges. Despite a strong gross profit margin, the company struggles with negative net income and high leverage. The balance sheet shows financial instability with negative equity, and cash flow generation is weak, raising concerns about liquidity and sustainability.

Income Statement

AJ Lucas Group's income statement shows a mixed performance. The company has experienced a decline in revenue growth with a negative rate of -7.50% in the latest year. Gross profit margin is strong at 71.03%, indicating efficient production, but the net profit margin is negative at -10.31%, reflecting ongoing profitability challenges. EBIT and EBITDA margins are relatively low, suggesting limited operational efficiency.

Balance Sheet

The balance sheet reveals significant financial leverage with a negative debt-to-equity ratio due to negative stockholders' equity, indicating financial instability. Return on equity is positive, but this is primarily due to negative equity, which is not sustainable. The equity ratio is negative, highlighting a concerning capital structure.

Cash Flow

Cash flow analysis indicates a sharp decline in free cash flow growth at -79.72%, which is concerning. The operating cash flow to net income ratio is low, suggesting limited cash generation relative to net income. However, the free cash flow to net income ratio is positive, indicating some ability to generate cash despite net losses.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	145.61M	145.61M	159.10M	157.61M	123.23M	111.09M
Gross Profit	28.18M	103.43M	40.27M	19.61M	13.09M	111.09M
EBITDA	13.72M	14.39M	28.98M	-135.61M	13.63M	20.58M
Net Income	-15.01M	-15.01M	-702.00K	-152.06M	-11.32M	3.34M
Balance Sheet
Total Assets	89.07M	89.07M	108.32M	104.14M	220.70M	232.00M
Cash, Cash Equivalents and Short-Term Investments	3.87M	3.87M	16.85M	14.04M	3.06M	5.14M
Total Debt	123.81M	123.81M	126.38M	126.91M	110.12M	107.39M
Total Liabilities	162.71M	162.71M	166.16M	161.20M	143.88M	137.56M
Stockholders Equity	-73.55M	-73.55M	-57.79M	-57.03M	75.66M	93.27M
Cash Flow
Free Cash Flow	2.94M	2.94M	17.78M	-4.46M	9.28M	17.89M
Operating Cash Flow	13.07M	13.07M	32.03M	1.39M	12.56M	19.62M
Investing Cash Flow	-9.26M	-9.26M	-13.75M	-5.84M	-3.27M	-1.65M
Financing Cash Flow	-16.94M	-16.94M	-15.46M	15.35M	-12.84M	-15.88M

AJ Lucas Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
JAL	46 Neutral	AU$53.98M	-45.63	-2.71%	―	―	40.74%
AJL	43 Neutral	AU$13.76M	-0.92	―	―	-8.48%	-2080.00%
WEC	40 Neutral	AU$19.87M	-0.39	―	―	―	-57.46%
NCR	38 Underperform	AU$768.61K	-33.33	―	―	―	57.14%

AJ Lucas Group Corporate Events

AJ Lucas Group Announces Successful AGM Resolutions

AJ Lucas Group Limited announced the results of its Annual General Meeting held on November 6, 2025, where all resolutions were passed by a poll. The successful resolutions, including the re-election of directors and approval of additional issuance capacity, indicate strong shareholder support and may positively impact the company’s governance and strategic initiatives.

AJ Lucas Group Overcomes Challenges with Strategic Debt Restructure and Innovation

AJ Lucas Group faced significant operational challenges in the 2025 financial year, resulting in lower earnings compared to the previous year. The company successfully completed a debt restructure, reducing total debt by $17.2 million, which improved financial flexibility and allowed for more focus on growth initiatives. Despite disruptions, AJ Lucas maintained operational momentum through investment in innovation and safety, recording zero environmental incidents and a low injury frequency rate. Looking forward, the company remains focused on deleveraging and capturing market opportunities, with a positive outlook for the metallurgical coal market and a successful unveiling of a new drilling rig.

AJ Lucas Group Reports Strong Start to FY26 with New Drilling Technology

AJ Lucas Group reported a quarterly revenue of $35.7 million, slightly down from the previous year, but showed improved EBITDA figures due to a settlement in the UK. The Australian operations benefited from reduced maintenance and weather disruptions, while the UK operations resolved a significant dispute, allowing the company to focus on conventional gas opportunities. The introduction of a new multi-purpose rig in Australia is expected to enhance service offerings and support future growth.