Service Stream Secures $4.2bn in Contracts, Posts 37% Profit Surge
Service Stream has delivered a robust FY25 performance with revenue growth, record profits, and a landmark $1.6 billion Defence contract, setting the stage for continued expansion.
- FY25 revenue rises to $2.42 billion, up 1.2%
- NPATA surges 36.7% to $68.5 million
- Secured $4.2 billion in new multi-year contracts
- Expanded work in hand to $7.6 billion, a 40% increase
- Awarded $1.6 billion Defence base services agreement
Strong Financial Momentum
Service Stream has reported an impressive set of financial results for FY25, underscoring its steady growth trajectory in the infrastructure maintenance and operations sector. Total revenue edged up 1.2% to $2.42 billion, while underlying EBITDA climbed 13.1% to $146.1 million. Most notably, net profit after tax and amortisation (NPATA) soared 36.7% to $68.5 million, reflecting improved operational efficiency and margin expansion.
The company’s net cash position strengthened significantly, rising by $65.7 million to $73.6 million, providing a solid financial foundation to support strategic initiatives and growth opportunities.
Contract Wins and Order Book Expansion
Service Stream’s success in securing new business was a highlight of the year, with $4.2 billion in contracts awarded across multi-year operations and maintenance agreements. This includes a remarkable 98% retention rate of existing contracts that proceeded to market, demonstrating strong client trust and contract stability.
The company’s work in hand expanded by approximately 40% to $7.6 billion, reflecting both contract renewals and new wins. This robust pipeline is underpinned by a diversified portfolio spanning utilities, telecommunications, industrial sectors, and government clients.
Strategic Defence Contract
A standout development was the award of a $1.6 billion base services agreement with the Australian Department of Defence. This long-term contract, spanning six years with options to extend, covers extensive property and asset services across Northern Territory and South Australia. While mobilisation is underway, earnings contribution is expected beyond FY26, positioning Service Stream for future growth in a new sector.
Operational Excellence and Safety
Operationally, the company improved its EBITDA margins across all divisions, with the group margin reaching 6.0%, up 60 basis points on the prior year. Utility segment margins are on track to hit a 5% target in FY26. Safety performance also improved markedly, with significant reductions in injury frequency rates, reinforcing Service Stream’s commitment to industry-leading safety standards.
Outlook and Growth Prospects
Looking ahead, Service Stream has started FY26 on a solid footing, with early trading reflecting continued momentum. The company anticipates earnings growth driven by its strong order book, margin improvements in utilities, and ongoing infrastructure investment. The Defence contract adds a new dimension to its portfolio, although its financial impact is expected to materialise in later periods.
Overall, Service Stream’s disciplined strategy execution and diversified revenue base position it well to capitalise on market opportunities and deliver sustainable shareholder value.
Bottom Line?
Service Stream’s FY25 results and contract wins lay a strong foundation, but eyes will be on Defence contract execution and margin sustainability in FY26.
Questions in the middle?
- How will the Defence contract mobilisation impact Service Stream’s operational capacity and margins?
- Can the company sustain margin improvements amid competitive pressures in utilities and telecommunications?
- What are the risks and opportunities in expanding further into adjacent markets beyond current sectors?
