Servcorp (SRV) H2 2025 earnings summary

Executive summary

• Achieved record underlying NPBIT, EPS, and dividend, with underlying NPBIT more than doubling over three years.

• Free cash flow reached $84.9 million, with net profit up 23% to $69 million year-over-year.

• Expanded global footprint with six new operations and net capacity increase of 221 offices.

• Major investments in technology, including Smart Office upgrades, enterprise messaging, data platforms, and proprietary AI avatar.

• Maintained robust net cash position and strong operational efficiency across mature segments.

Financial highlights

• Statutory revenue rose 11% year-over-year to $352.1m; underlying operating revenue up 11% to $332.9m.

• Underlying NPBIT grew 23% to $69.1m; underlying operating profit up 27% to $68.4m.

• Underlying free cash reached $84.9m, up 17% year-over-year; unencumbered cash at $143.8m.

• U.S. operations turned profitable, with July profit of $300,000 versus a $19,000 loss last year.

• Final dividend of 14.0 cps (10% franked), total FY25 dividend 28.0 cps, up 12% year-over-year.

Outlook and guidance

• FY26 underlying NPBIT guidance set at $72.0m–$76.0m, midline representing 7% growth.

• FY26 underlying free cash expected to exceed $90.0m; dividend not expected below 30.0 cps.

• Australia is expected to be a normal contributor again, with the first half projected as the best in six or seven years.

• Management prefers to upgrade guidance at the half rather than downgrade.

• Middle East markets have a long runway, with strong youth demographics and ongoing investment.