SKS Technologies has boosted its Melbourne data centre contract to $210 million, reflecting a significant project scope increase and reinforcing its position in the Australian data centre infrastructure sector. The company is also advancing its NSW footprint with a new $3 million electrical upgrade contract.
- Melbourne data centre contract grows to $210 million
- Project capacity increased from 90MW to 126MW
- Work on hand rises to $350 million, supporting FY26 revenue of $340 million
- New $3 million electrical upgrade contract in Western Sydney
- Order book expanded nearly eightfold since mid-2023
Major Contract Expansion in Melbourne
SKS Technologies Group (ASX:SKS) has significantly expanded its data centre contract with construction partner Hickory, increasing the total value to $210 million. Originally secured as a $130 million letter of intent last November, the contract now covers electrical design and construction works for a hyperscale data centre in Melbourne’s west, MEL02A, with capacity rising from 90MW to 126MW.
This scope increase includes additional medium and high voltage electrical works, reflecting the data centre operator’s decision to enlarge the facility under a single contract. Completion is scheduled for the third quarter of 2027, underpinning a sizeable pipeline of work for SKS.
Robust Order Book and Earnings Outlook
The expanded contract contributes to SKS’s current work on hand tallying $350 million, with nearly 69% expected to flow into FY27. This represents an almost eightfold increase in the order book since June 2023, a remarkable growth trajectory that supports the company’s FY26 revenue forecast of $340 million and a 10% profit before tax margin, translating to an anticipated $34 million pre-tax profit.
SKS’s CEO, Matthew Jinks, highlighted the contract as evidence of the company’s ability to convert pipeline opportunities into awarded projects, cementing its status as a key player in Victoria’s hyperscale data centre market. This follows a strong half-year performance driven by the initial $130 million contract win and strategic moves to expand geographically.
Expanding Footprint in New South Wales
Beyond Victoria, SKS is building momentum in New South Wales, bolstered by last year’s acquisition of Delta Elcom, a Sydney-based data centre infrastructure specialist. The company recently secured a $3 million contract to upgrade electrical infrastructure at a major hyperscale operator’s existing facility in Western Sydney, marking an important step in establishing a foothold in the NSW market.
This development aligns with SKS’s strategic intent to grow its presence beyond Victoria, leveraging the acquisition to tap into the expanding NSW data centre sector. The broader market for hyperscale data centres continues to attract significant investment, and SKS’s expanding order book positions it well to capitalise on this trend.
Notably, SKS’s recent contract expansion follows its earlier strong results, including a $130 million data centre contract that helped deliver a 52.5% jump in net profit after tax, underscoring the company’s growing influence in the sector.
Bottom Line?
SKS’s expanded data centre contract and growing NSW presence highlight its rising stature in Australia’s hyperscale infrastructure market, but execution risks remain as the company delivers on this ambitious pipeline.
Questions in the middle?
- How will SKS manage the increased complexity and scale of the expanded MEL02A project?
- What impact will the NSW electrical upgrade contract have on SKS’s regional growth strategy?
- Can SKS sustain its rapid order book growth amid competitive pressures in the data centre sector?