Saunders International reported a half-year loss for H1 FY2026 despite a 13.7% revenue increase driven by its acquisition of Aqua Metro. The company’s project pipeline expanded to a record $4.9 billion, signalling growth potential amid operational challenges.
- Revenue rose 13.7% to $143.6 million, boosted by Aqua Metro acquisition
- Adjusted EBITDA fell sharply to $0.4 million from $9.9 million prior year
- Net loss after tax of $4.15 million, impacted by acquisition and integration costs
- Project pipeline grew 22.5% to $4.9 billion, reflecting strong market demand
- No interim dividend declared; new CEO Angelo De Angelis appointed
Revenue Growth Masks Profitability Challenges
Saunders International Limited has released its interim results for the half-year ended 31 December 2025, revealing a complex picture of growth tempered by integration costs and operational pressures. The company’s revenue climbed 13.7% to $143.6 million, largely driven by the strategic acquisition of the Aqua Metro group, which expanded Saunders’ footprint in the water infrastructure sector.
However, this top-line growth belies a significant decline in profitability. Adjusted EBITDA plummeted to $0.4 million from $9.9 million in the prior corresponding period, while the company recorded a net loss after tax of $4.15 million. These results reflect acquisition-related expenses and the costs associated with integrating Aqua Metro’s operations into Saunders’ broader business.
Strategic Acquisition and Market Positioning
The acquisition of Aqua Metro, completed with an effective date of 1 July 2025, marks a pivotal expansion for Saunders into the water sector, a key growth market. Aqua Metro’s established relationships with Victorian utilities and government agencies complement Saunders’ existing multi-sector capabilities across Defence, Energy, and Resources & Industrials.
The purchase consideration included $14.1 million in cash and $7 million in equity, with contingent consideration of up to $12 million dependent on future earnings targets. Goodwill recognised from the acquisition totals $20.2 million, reflecting anticipated synergies and market opportunities.
Leadership and Operational Momentum
Leadership continuity was secured with the appointment of Angelo De Angelis as Managing Director and CEO in September 2025. Under his stewardship, Saunders has focused on improving earnings resilience and operational stability. The company reports improved project award momentum in the first half of FY2026, securing $155.8 million in new contracts and maintaining a robust tender pipeline valued at $4.9 billion, up 22.5% since June 2025.
This pipeline growth underscores strong demand across Saunders’ key markets, including ongoing government investment in fuel infrastructure, water asset renewal, energy transition projects, and critical minerals development.
Financial Position and Dividend Policy
Saunders’ balance sheet remains solid, with cash and cash equivalents increasing to $26.7 million and borrowings drawn to fund the Aqua Metro acquisition. The company complied with all debt covenants and continues to manage liquidity prudently.
Reflecting the current earnings profile and integration phase, the Board declared no interim dividend for H1 FY2026, a pause from prior distributions. This decision aligns with the company’s focus on reinvesting in growth and stabilising operations.
Outlook and Market Implications
Looking ahead, Saunders enters the second half of FY2026 with increased work-in-hand of approximately $549 million and a record opportunity pipeline. The company’s ability to self-perform and engage early with clients through contractor involvement positions it well to convert pipeline opportunities into revenue and earnings growth.
While the acquisition integration presents short-term challenges, Saunders’ expanded capabilities and diversified market exposure offer a promising platform for future performance improvement.
Bottom Line?
Saunders’ H1 loss highlights integration costs but a strong pipeline signals potential for a turnaround.
Questions in the middle?
- How will Saunders manage integration risks and realise synergies from Aqua Metro?
- What is the timeline and likelihood for achieving contingent consideration earn-out targets?
- How will Saunders balance growth investments with returning value to shareholders?