How Did Service Stream Achieve 13% EBITDA Growth and a 22% Dividend Boost in FY2025?

Strong Financial Performance Amid Strategic Execution

Service Stream Limited has delivered a standout financial year ending 30 June 2025, reporting total revenue of $2.42 billion, a modest 1.6% increase over the prior year. More impressively, the company’s underlying EBITDA from operations surged by 13.1% to $146.1 million, reflecting improved operational efficiency and margin enhancement across its core business segments.

The adjusted net profit after tax (NPAT-A) rose sharply by 36.7% to $68.5 million, signaling robust bottom-line growth. This performance was underpinned by strong contributions from the Utilities and Transport divisions, which offset a slight revenue decline in Telecommunications due to the completion of the initial NBN fibre overbuild program.

Dividend Growth and Shareholder Returns

In recognition of its strong earnings and cash flow generation, Service Stream declared a fully franked final dividend of 3.0 cents per share, bringing the total dividend for FY2025 to 5.5 cents per share, a 22% increase from the previous year. The company’s share price also appreciated by approximately 55% during the year, rewarding shareholders with both income and capital gains.

Expanding Work-in-Hand and Contract Wins

Service Stream secured approximately $4.2 billion in new and renewed contracts across its Telecommunications, Utilities, and Transport divisions, lifting its total work-in-hand to $7.6 billion. This strong contract pipeline provides revenue visibility for more than three years, positioning the company well for sustained growth.

Key contract wins include extensions and new agreements with major clients such as NBN, TPG, NSW Telco Authority, Telstra, Urban Utilities, Sydney Water, AGL, and Transurban. The company’s diversified customer base, with around 67% of revenue derived from government-related entities, helps mitigate concentration risk and supports stable cash flows.

Safety and Operational Excellence

Service Stream continues to lead in safety performance, adopting the Human Organisational Performance (HOP) framework to foster a proactive safety culture. The company reported industry-leading safety metrics with a Total Recordable Injury Frequency Rate (TRIFR) below 2.18, underscoring its commitment to workforce wellbeing and operational discipline.

Remuneration Aligned with Performance

The Board approved modest remuneration increases for FY2026, with the Managing Director and CFO receiving a 3% rise inclusive of superannuation adjustments. The remuneration framework remains aligned with the company’s strategic objectives, balancing short-term incentives with long-term equity-based rewards. FY2025 short-term incentives were paid at 106% of target for key executives, reflecting strong financial and safety outcomes.

Robust Balance Sheet and Liquidity

Service Stream ended FY2025 with a net cash position of $73.6 million and total liquidity of $340 million, including undrawn committed loan facilities. The company’s disciplined working capital management and strong cash conversion rate of 104.4% underpin its financial resilience and capacity to fund growth initiatives.

Outlook

Entering FY2026, Service Stream is well positioned to capitalize on its strong contract backlog and diversified portfolio. The company plans to continue optimizing its systems and embedding safety frameworks while pursuing revenue diversification and operational efficiencies. With a solid balance sheet and a growing pipeline, the outlook remains positive, though the outcome of certain tenders, such as the Department of Defence Base Services Transformation Program, remains uncertain.