How Will Saunders Capitalize on a $4 Billion Pipeline After EBITDA Slump?

Financial Performance Under Pressure

Saunders International Limited closed FY2025 with a revenue figure of $214.5 million, a slight 0.7% decline from the previous record year. More notably, adjusted EBITDA plunged by over half to $9.3 million, reflecting a challenging operating environment marked by unforeseen project delays, adverse weather, and cost pressures. These factors combined to erode margins, particularly in the second half of the year.

Despite these setbacks, Saunders maintained a strong balance sheet, increasing cash reserves by 11.5% to $22.1 million. The company also declared a final dividend of 0.25 cents per share, down from 4.25 cents the prior year, signaling a cautious approach to capital returns amid operational headwinds.

Strategic Acquisition and Growth Prospects

A key highlight was Saunders’ strategic acquisition of Aqua Metro, a specialist in water infrastructure. This move added $135 million in revenue and expanded the group’s order book to a record $529 million; up nearly 180% year-on-year. The pipeline of potential projects also doubled to $4.0 billion, underscoring the company’s enhanced market positioning, especially in the Water sector.

Management emphasized that Aqua Metro’s integration is underway with a focus on business continuity and leveraging the acquisition’s strategic benefits. This diversification is expected to help Saunders scale operations without a significant increase in overheads, positioning the company well for future growth.

Operational Challenges and Market Outlook

The FY2025 period was marked by operational challenges including the cancellation of a major project by bp and cost pressures from complex project delivery. Saunders responded by implementing efficiency measures and cost reductions. Safety performance remained strong, with a Lost Time Injury free year and a 34% reduction in the Total Recordable Injury Frequency Rate.

Looking ahead, Saunders anticipates continued external challenges, particularly in the Defence sector, but remains optimistic due to robust tendering activity and a strong pipeline. The company plans to leverage its multidisciplinary capabilities across Defence, Water, Energy, and Resources sectors to capitalize on emerging opportunities.

Leadership Transition

Adding to the year’s developments, Managing Director Mark Benson announced his intention to step down by the end of the calendar year. The Board is actively progressing the appointment of a successor, signaling a new chapter for the company’s leadership as it navigates its expanded scale and market opportunities.