Southern Cross Electrical Engineering (SXE) H1 2026 earnings summary

Executive summary

• Underlying EBITDA rose 30.8% to $35.4m and underlying EBIT increased 25.5% to $29.1m, both record half-year results, despite a net loss after tax due to the $46.1m WestConnex arbitration settlement.

• Revenue declined 12.2% year-over-year to $349.1m, mainly due to completion of major projects, but gross profit reached a record $65.9m, with gross margin at 18.9%.

• Cash balance ended at $58.8m after significant payouts, including WestConnex settlement and record dividend; group remains debt free.

• Order book increased 6% year-over-year to $710m, with over 85% on the East Coast and $200m in non-electrical disciplines.

• Force Fire acquisition contributed positively, consolidated for the full period, driving commercial sector growth.

Financial highlights

• Underlying EBITDA margin rose to 10.1% (up from 6.8%), and underlying EBIT margin to 8.3% (up from 5.9%).

• Overheads increased 29.4%, mainly from Force Fire consolidation.

• Legal dispute costs of $46.1m from WestConnex led to an NPAT loss of $12.8m, down from a $16.2m profit year-over-year.

• Acquisition amortization of $2.2m included in results.

• Fully franked interim dividend of 2.5 cents per share declared; $13.3m paid in dividends.

Outlook and guidance

• FY26 underlying EBITDA guidance raised to at least $72m, a 31% increase over FY25.

• Expecting further growth beyond FY26, driven by strong pipeline in data centres, infrastructure, and renewables.

• Data centre market expected to see significant order inflow from calendar year 2026.

• Multi-disciplinary offerings and acquisitions to support geographic and sector diversification.

• Gross margin expected to normalize to 16-17% in the second half, with long-term range of 13-15%.