Veris Faces Execution Risks Despite Return to Profitability and Margin Gains
Veris Limited has returned to profitability in FY25, driven by strong growth in its digital and spatial advisory services, while declaring its first dividend in years and strengthening its cash position.
- Revenue rises 5% to $97.2 million
- EBITDA jumps 49% to $10 million with margin expansion
- Profit before tax turns positive at $2 million
- First fully franked dividend declared at 0.2 cents per share
- Acquisition and integration of Spatial Vision enhances digital advisory capabilities
Return to Profitability
Veris Limited (ASX, VRS) has marked a significant turnaround in its FY25 results, returning to profitability after a loss in the previous year. The company reported a 5% increase in revenue to $97.2 million, alongside a 49% surge in EBITDA to $10 million, lifting its margin to 10.3% from 7.2% in FY24. This improvement culminated in a modest profit before tax of $2 million, reversing a $4.4 million loss the year prior.
Strategic Shift to Digital and Advisory Services
Central to Veris’ transformation has been its strategic pivot towards higher-value digital, consulting, and advisory services. These segments now contribute over 25% of group revenue, reflecting the company’s focus on premium client segments and proprietary digital platforms. The acquisition and seamless integration of Spatial Vision, a specialist in GIS and spatial data with deep expertise in government and environmental sectors, has further strengthened Veris’ market positioning and expanded its service offerings.
Operational and Financial Strength
Veris closed FY25 with a robust cash balance of $16.6 million, bolstered by disciplined working capital management and reduced borrowings. The company’s order book exceeds $65 million, with a pipeline valued at over $190 million, providing strong visibility into FY26. The board declared a fully franked dividend of 0.2 cents per share, signaling confidence in the company’s financial health and future outlook.
Outlook and Growth Priorities
Looking ahead, Veris plans to sustain margin-accretive growth by deepening its digital and advisory capabilities, scaling proprietary platforms, and pursuing selective mergers and acquisitions aligned with its strategic priorities. The company’s diversified exposure across transport, government, energy, utilities, defence, and property sectors positions it well to capitalize on ongoing infrastructure investment and digital transformation trends.
Market Implications
Veris’ return to profitability and dividend declaration may attract renewed investor interest, especially given its clear strategy to move away from commoditised services towards higher-margin digital solutions. The integration of Spatial Vision and a strong forward workload underpin a positive growth trajectory, though execution risks remain as the company scales its national delivery model and digital platforms.
Bottom Line?
Veris’ FY25 results set the stage for sustained growth, but investors will watch closely how digital expansion and integration efforts translate into consistent margin gains.
Questions in the middle?
- How will the Spatial Vision acquisition impact Veris’ FY26 earnings and margins?
- Can Veris maintain its margin expansion amid scaling digital platform investments?
- What is the company’s strategy for balancing growth initiatives with shareholder returns?
