K-Bro Linen (KBL) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue reached CAD 150.4 million, up 33% year-over-year, driven by the Stellar Mayan acquisition and strong performance in healthcare and hospitality.

• Adjusted EBITDA rose 25.6% to CAD 29.8 million, with adjusted net earnings increasing to CAD 10.1 million.

• Healthcare revenue grew 50% to CAD 86.6 million, now representing 58% of total revenue; hospitality revenue increased 15%.

• Integration of Stellar Mayan is progressing, with about 40% of anticipated synergies achieved and the remainder expected over the next 12–24 months.

• Management maintains a positive outlook for both Canadian and UK operations, supported by steady volume trends and strategic growth opportunities.

Financial highlights

• Q2 2026 consolidated revenue: CAD 150.4 million, up 33% year-over-year.

• Adjusted EBITDA: CAD 29.8 million, up 25.6% year-over-year; adjusted EBITDA margin decreased 1.2% to 19.8%.

• Adjusted net earnings: CAD 10.1 million, up from CAD 7.8 million in Q2 2025, with CAD 2.5 million in adjusting items.

• Distributable cash flow: CAD 14.7 million; payout ratio: 26.6% for Q2 and 27.3% trailing 12 months.

• Dividend payout: CAD 0.3 per share (CAD 3.9 million total); 58,039 shares repurchased for CAD 2.5 million.

Outlook and guidance

• Combined adjusted EBITDA margins expected to remain at seasonally adjusted historical levels, with UK margins lower due to Stellar's profile.

• Diesel price volatility expected to impact margins by about 0.5% for the remainder of 2026.

• No new energy hedges since Q1; 50% of UK diesel and natural gas usage hedged, all floating in Canada.

• Capital spending for 2026 guided at CAD 20–22 million, including Stellar Mayan integration investments.

• Organic growth and M&A remain strategic priorities, with a strong pipeline of potential acquisitions, especially in the UK.