Ventia Services Group (VNT) H2 2023 earnings summary

Executive summary

• FY23 revenue rose 9.8% to $5,676.4m, EBITDA increased 10.8% to $465.2m and NPATA grew 12.5% to $202.1m.

• Growth across all sectors, an 87% contract renewal rate and $18.1b Work in Hand supported confidence for 2024.

• FY24 guidance: NPATA growth of 7–10% vs FY23.

Financial highlights

• Revenue was $5,676.4m, up 9.8% YoY; EBITDA was $465.2m, up 10.8% on the previously disclosed FY22 pro forma comparative.

• NPATA reached $202.1m, up 12.5% YoY; growth absorbed a $15.5m increase in finance costs.

• EBITDA margin was 8.2%, up 0.1 percentage points; cash conversion was 88.8%, down 0.1 percentage points.

• Operating cash flow was $412.9m vs $373.3m; free cash flow before tax and dividends was $256.6m vs $224.9m.

Outlook and guidance

• FY24 NPATA growth guidance is 7–10% compared with FY23.

• $8.9b of Work in Hand is scheduled for FY24–FY25, supporting strong revenue secured for FY24.

• Four Defence Estate contracts and Land and Social Housing contracts are forecast for government decisions in 2024–25; all signed short-term extensions in FY23.

• PPA utilisation in 2024 is expected to be significantly lower than FY23; remaining balances are expected to decline in small increments over 15 years.