Service Stream (SSM) H1 2025 earnings summary

Executive summary

• Achieved strong first-half FY25 performance with disciplined strategy execution, resulting in significant increases in revenue, earnings, and profit, as well as exceptional cash flow generation and a strengthened balance sheet.

• Revenue, earnings, and profit growth were driven by strategic focus on delivery, optimization, and growth across all divisions.

• Expanded work in hand to $5.9 billion, up 17% year-over-year, with 99% of FY25 WIH secured under contract or extension options.

• Renewed 94% of existing contracts that proceeded to market, securing $1.1 billion in major multi-year agreements.

• Workforce safety improved, with a 20% reduction in total recordable injury rates.

Financial highlights

• Total revenue reached $1,267 million, up 7.9% year-over-year, with growth across all three segments.

• Underlying EBITDA from operations was $73.6 million, up 16.4% year-over-year; group EBITDA margin improved to 5.8%.

• NPATA increased 49.9% to $37.7 million; statutory NPAT was $33.1 million, including a $2.7 million one-off tax benefit.

• Operating cash flow before interest and tax (OCFBIT) reached $90.6 million, with a conversion rate of 126%.

• Net cash position improved to $55.4 million, up $47.5 million from June and $52.1 million year-over-year.

• Interim fully franked dividend increased by 25% to 2.5 cents per share.

Outlook and guidance

• On track to deliver solid earnings growth and improved quality of earnings for FY25, supported by a strong order book, improved balance sheet, and favorable market conditions.

• 99% of second-half revenue is secured, minimizing risk and reducing need for new business wins.

• Utilities segment expected to continue incremental margin improvement, targeting 5% EBITDA margin in FY26.

• Expect further improvements in Utility operations and a first-half earnings bias due to strong Telco contributions.

• Strong pipeline of opportunities across current and adjacent markets to support medium- and long-term growth.