Service Stream (SSM) H1 2026 earnings summary

Executive summary

• Delivered strong first half FY 2026 results with improved profitability, quality of earnings, and exceptional cash flow across all segments, especially utilities and transport, and expanded into the defense sector as a Tier 1 contractor.

• Achieved record contract wins, expanding work-in-hand by 55% to $9.2 billion, and secured a major multi-year Department of Defence contract.

• Interim dividend increased by 20% to 3.0 cents per share, fully franked, reflecting confidence in future growth.

• Maintained a robust net cash position of $87.6 million, supporting organic and M&A growth.

• Major expansion of addressable market, including diversification into utilities, transport, and defense.

Financial highlights

• Group revenue for H1 FY 2026 was $1,194 million, down 5.8% year-over-year due to contract transitions and prior period one-offs.

• Underlying EBITDA rose 2.3% to $75.3 million, with group EBITDA margin up 50 bps to 6.3%.

• Adjusted NPAT was $36.6 million, up 4.6% year-over-year excluding prior year tax benefit; statutory NPAT was $26.8 million.

• Operating cash flow before interest and tax reached $109 million, with a conversion rate of 148%.

• Net cash improved by $14 million since June 2025.

Outlook and guidance

• Confident in delivering earnings growth for FY 2026, with a traditional second half bias and contributions from new contracts, especially in defense expected from FY 2027.

• Ongoing focus on margin improvement, contract optimization, and selective bidding to enhance quality of earnings.

• Investment cash flows expected at the upper end of guidance range due to contract mobilizations and systems transformation.

• Market fundamentals remain positive, supporting ongoing growth across expanded addressable markets.