SRG Global’s Profit Upgrade Highlights Growth but Raises Integration Execution Risks
SRG Global has reported a record first half for FY25, posting a 21% revenue increase and upgrading its full-year profit guidance, driven by strong cash flow and successful integration of the Diona acquisition.
- 1H FY25 revenue up 21% to $619.7 million
- Underlying EBITDA rises 31% to $59.0 million; EBIT(A) up 48% to $42.1 million
- Net cash position of $9.1 million post-Diona acquisition
- Interim fully franked dividend increased 25% to 2.5 cents per share
- FY25 EBITDA guidance upgraded to $125–128 million
Record Half-Year Performance
SRG Global Ltd (ASX: SRG) has delivered a standout first half for FY25, reporting revenue of $619.7 million, a 21% increase compared to the same period last year. The company’s underlying EBITDA surged 31% to $59.0 million, while EBIT(A) climbed an impressive 48% to $42.1 million. This robust financial performance underscores SRG Global’s successful execution of its growth strategy and operational excellence across its diversified infrastructure services portfolio.
Strong Cash Generation and Balance Sheet Improvement
SRG Global’s cash generation remains a highlight, with an EBITDA to cash conversion rate of 120% in 1H FY25. The company transitioned from a proforma net debt position of $38.2 million following the September 2024 acquisition of Diona to a net cash position of $9.1 million. This deleveraging reflects disciplined working capital management and operational cash flow strength, providing a solid financial foundation for future growth.
Successful Integration of Diona Acquisition
The integration of Diona, a market leader in water security and energy transition services, has been seamless and accretive. SRG Global highlighted several early wins and strong cultural alignment, positioning the combined entity to capitalize on long-term program and asset management agreements with government and utility clients. This acquisition enhances SRG’s exposure to growth sectors and supports its strategic transformation into a diversified infrastructure services company.
Upgraded Profit Guidance and Dividend Increase
Reflecting confidence in its ongoing performance, SRG Global upgraded its FY25 EBITDA guidance to a range of $125 million to $128 million and EBIT(A) guidance to $91 million to $94 million. The company also declared an interim fully franked dividend of 2.5 cents per share, a 25% increase on the prior year, demonstrating a commitment to returning value to shareholders while funding growth initiatives.
Robust Pipeline and Long-Term Growth Prospects
SRG Global’s work in hand reached a record $3.4 billion, supported by an opportunity pipeline of $8.5 billion spanning water, defence, resources, transport, and energy sectors across Australia and New Zealand. With approximately 80% of earnings expected to be annuity or recurring in nature, the company is well positioned for sustainable, long-term growth. The strategic shift towards diversified infrastructure services continues to deliver consistent growth and high-quality returns.
Bottom Line?
SRG Global’s record half and upgraded guidance signal a confident growth trajectory, but sustaining momentum post-acquisition integration will be key.
Questions in the middle?
- How will SRG Global maintain margin expansion amid integration and market pressures?
- What are the key risks to achieving the upgraded FY25 EBITDA and EBIT(A) targets?
- How will the company leverage its $8.5 billion opportunity pipeline to drive future earnings?
