Ventia Services Group (VNT) H1 2024 earnings summary

Executive summary

• Revenue rose 10.6% to $3,082.5m for HY24, with NPATA up 12.5% year-on-year, driven by strong performance in Defence & Social Infrastructure and Telecommunications, and supported by high client renewal rates and long-term contract stability.

• Upgraded FY24 NPATA growth guidance to 10-12% over FY23, reflecting business momentum and management confidence.

• Interim dividend increased by 12.5% to 9.35 cents per share, 80% franked, with a 75% payout ratio.

• Work in hand at $17.2 billion, with a 93% renewal rate, underpinning future growth despite a slight decrease from HY23.

• Profit after tax increased 14.8% to $101.4m; basic EPS up 14.8% to 11.85 cents.

Financial highlights

• EBITDA increased 9.2% to $245.8m, with margins stable at 8.0%.

• Cash conversion improved to 90.7%, up 180bps year-on-year.

• Net debt to EBITDA reduced to 1.1x, with liquidity at $763.6m.

• Net capital expenditure increased to $28.5m, reflecting investment in core business.

• Free cash flow before tax and dividends rose 12.2% to $140.3m.

Outlook and guidance

• FY24 NPATA growth guidance upgraded to 10-12% over FY23.

• Management confident in continued growth, supported by a strong pipeline and diversified portfolio.

• Targeting work-in-hand balance above $18.1 billion by year-end.

• Addressable market expected to grow at 6.4% CAGR to over $100 billion by FY28.

• Expecting margin improvement in Infrastructure Services in H2 as sector transitions to energy, water, and renewables.