Service Stream Limited (ASX:SSM) Releases FY25 Half Year Results
Financial Performance
Service Stream Limited reported total revenue of $1,267 million for the half-year ended 31 December 2024, marking a 7.9% increase from 1H24. Underlying EBITDA from operations rose by 16.4% to $73.6 million, while NPATA surged 49.9% to $37.7 million. The EBITDA margin improved to 5.8% from 5.4% in the previous half-year, and earnings per share increased to 6.1 cps from 4.1 cps.
Dividend Declaration
Service Stream declared an interim dividend of 2.5 cps, a 25% increase on the prior half-year’s dividend. The dividend is fully franked with key dates set as follows: ex-dividend on 20 March 2025, record date on 21 March 2025, and payment date on 4 April 2025.
Performance & Market Conditions
The Group secured over $1.1 billion in contracted works during 1H25, enhancing the work-in-hand pipeline to $5.9 billion. Market conditions remain favourable, driven by ageing infrastructure, population growth, digitalisation, and the energy transition. Service Stream expects solid earnings growth and a strong order book to continue supporting the business in FY25.
Safety Performance
Service Stream achieved industry-leading safety performance with a 20% reduction in Total Recordable Injury Frequency Rates (TRIFR) compared to the prior period, reflecting the company’s commitment to a strong safety culture.
Cashflow and Balance Sheet
The company generated $90.6 million in OCFBIT for the first half, up from $67.5 million in 1H24. The EBITDA to OCFBIT cash conversion rate reached 126.3%. The balance sheet was strengthened with a net cash position of $55.4 million, an increase of $47.5 million from the previous period.
Executive Comments
Managing Director Leigh Mackender stated, “First half performance reflected another period of disciplined execution against Service Stream’s value creation strategy and delivery on our commitments. These positive results were headlined by strong increases in revenue, earnings and profit, coupled with exceptional cashflow generation which has further strengthened the Group’s balance sheet. Continued demand for infrastructure focussed maintenance and upgrades across Service Stream’s core markets positions the business well to deliver against its full-year outlook.”
Chairman Brett Gallagher commented, “The Board is delighted to report another period marking significant improvements in Service Stream’s financial and operational performance. We recognise and congratulate the Management team and all of our valued staff for their hard work and dedication during the half-year. Following a period of solid cash performance, and aligned to the business’s commitment to maintain sustainable dividends for our Shareholders, the Board is pleased to declare a fully-franked interim dividend of 2.5 cps.”
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