Servcorp (SRV) H2 2025 earnings summary

Executive summary

• Achieved record underlying NPBIT, EPS, and dividend, with underlying NPBIT up 23% to $69.1 million for FY2025 and more than doubling over three years.

• Free cash flow reached $84.9 million, up 17% year-over-year, and net profit rose 23% to $69 million.

• Operating revenue rose 11% to $352.1 million, with underlying operating profit up 27% to $68.4 million.

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

• Major investments in proprietary AI, IT systems, and digital infrastructure upgrades.

Financial highlights

• Statutory net profit before tax reached $62.6 million, up 46% year-over-year; statutory NPAT up 36% to $53.1 million.

• Underlying earnings per share increased 25% to 53.8 cents, a record high.

• Underlying free cash at $84.9 million, unencumbered cash at $143.8 million.

• Final dividend of 14.0 cps (10% franked), total FY2025 dividend 28.0 cps, up 12% year-over-year.

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

Outlook and guidance

• FY2026 underlying NPBIT guidance set at $72.0 million–$76.0 million, midline representing 7% growth.

• Underlying free cash expected to exceed $90.0 million in FY2026.

• Dividends for FY2026 not expected below 30.0 cps, with franking status uncertain.

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

• Guidance subject to stable currencies and global economic conditions.