Service Stream (SSM) H2 2024 earnings summary

Executive summary

• FY 2024 delivered strong double-digit growth in revenue, earnings, and profit, with significant improvements across all key metrics, despite inflationary pressures.

• The group returned to a net cash position, exceeding expectations, and maintained high cash flow conversion rates.

• Strategic repositioning of the utility segment is substantially complete, creating a strong platform for growth in FY25 and beyond.

• Acquisition and integration of Lendlease Services expanded market exposure and diversified the client base.

• Secured $2.2bn in new contract works, with a work-in-hand (WIH) of $5.5bn, providing momentum for future growth.

Financial highlights

• Group revenue reached AUD 2.4 billion, up 11.2% year-over-year.

• Underlying EBITDA was AUD 129.2 million, up 13.2% on the prior year; EBITDA margin at 5.4%.

• NPATA increased 36.4% to AUD 50.1 million; statutory NPAT was AUD 32.3 million, reversing a prior year loss.

• Operating cash flow was AUD 131.2 million, with an EBITDA to OCFB conversion rate of 101.6%.

• Net cash position at year-end was AUD 7.9 million, a AUD 43.6 million improvement.

• Fully franked dividend increased to AUD 0.045 per share, a 200% rise year-over-year.

Outlook and guidance

• Work in hand exceeds AUD 5.5 billion, with multi-year extension options adding another AUD 3 billion.

• 85% of FY 2025 revenue is already secured under contract or extension agreements.

• Expecting further earnings growth in FY 2025, especially from the utility segment as margin targets are achieved.

• Strong pipeline of infrastructure investments across all major markets to support organic growth.

• Priorities include maintaining safety performance, realizing utility margin improvements, and pursuing organic and external growth opportunities.