SKS Technologies Lifts FY26 Profit Forecast on $60M Contract Wins
SKS Technologies Group has upgraded its FY26 earnings forecast following $60 million in new contract awards, including major projects for NEXTDC and Ernst & Young. The company anticipates stronger revenue and profit margins driven by robust demand in data centre infrastructure.
- New contracts worth $60 million boost FY26 revenue guidance to $340 million
- Profit before tax forecast raised from $28.8 million to $34 million
- NPBT margin expected to improve from 9% to 10%
- Key projects include NEXTDC M3 Stage 4 data centre expansion and Ernst & Young Melbourne office
- Work on hand reaches a record $325 million with 94% repeat business rate
Strong Contract Wins Drive Earnings Upgrade
SKS Technologies Group Limited (ASX – SKS) has announced a significant upward revision to its FY26 earnings forecast, propelled by a fresh wave of contract awards totalling $60 million. The company now expects revenue to climb to $340 million, up from the previous guidance of $320 million, while profit before tax is forecast to rise from $28.8 million to $34 million. This improvement is underpinned by a projected increase in the NPBT margin from 9% to 10%, signalling enhanced operational efficiency alongside growth.
Data Centre Sector Fuels Growth Momentum
Central to this upgrade is SKS’s expanding footprint in the data centre sector, highlighted by the award of a substantial contract for the NEXTDC M3 (Stage 4) project. This hyperscale data centre expansion in West Footscray is designed to meet surging demand for AI and cloud computing infrastructure, featuring a 150MW Tier IV facility. The contract, awarded by Kapitol Group, reinforces SKS’s reputation as a leading provider of critical electrical solutions in a sector experiencing rapid growth and technological evolution.
Diversification Across Traditional Sectors
Beyond data centres, SKS continues to secure work across its traditional markets, exemplified by the full suite of electrical, communications, and audio visual services contracted for Ernst & Young’s new Melbourne office tower at 111 Bourke Street. This project, awarded through Shape Australia, underscores the company’s ability to deliver integrated solutions in commercial construction, maintaining a diversified revenue base that balances the high-growth data centre segment.
Robust Backlog and Repeat Business
SKS’s confidence in its outlook is further supported by a record $325 million of work on hand and a remarkable 94% repeat business rate recorded in FY25. CEO Matthew Jinks emphasised the company’s strong visibility of future earnings and its sustainable operating platform, which balances growth with consolidation to capitalise on immediate opportunities in the data centre sector and beyond.
Looking Ahead
While the revised guidance paints a positive picture, investors will be watching closely how SKS manages execution risks on these large-scale projects and converts its robust pipeline into sustained profitability. The company’s ability to maintain margin improvements amid expanding operations will be key to validating this optimistic forecast.
Bottom Line?
SKS’s upgraded forecast signals strong momentum but execution on major contracts will be critical to sustaining growth.
Questions in the middle?
- How will SKS manage execution risks on the large NEXTDC M3 Stage 4 project?
- What is the expected timeline for revenue recognition from these new contracts?
- Can SKS maintain or improve its NPBT margin amid rapid expansion?
