- Service Stream (SSM) has delivered a resilient performance over the last 12 months, despite ongoing turmoil brought on by the COVID-19 pandemic
- The network services company posted a nine per cent increase in revenue for the 2020 financial year, from $852.2 million to $929.1 million
- Earnings before interest, taxes, depreciation and amortisation (EBITDA) was also up 15.9 per cent, or $14.8 million, compared to the year before
- The company ended the year with a net cash position of $19.5 million and is anticipating a consistent performance for the foreseeable future
- Service Stream shares are up 3.02 per cent to $1.88 today
Service Stream (SSM) has delivered a resilient performance over the last 12 months, despite ongoing turmoil brought on by the COVID-19 pandemic.
The essential services company posted record earnings of $108.1 million during the 2020 financial year, representing a 15.9 per cent, or $14.8 million, increase compared to the prior period.
Telecommunications and utilities earnings before interest, taxes, depreciation and amortisation (EBITDA) improved 7.8 per cent and 36.7 per cent respectively, which contributed to improved margins and supported overall earnings. Unallocated corporate costs also fell roughly $500,000 to $5.8 million compared to the year before.
Total revenue for the year also saw an increase of nine per cent, from $852.2 million to $929.1 million. This was driven largely by a full year of contributions from Comdain Infrastructure.
However, any further increases in revenue were held back by metering services and new energy activities, which remained largely flat due to moratorium across gas and electricity disconnections and delays in contract awards.
Service Stream finished the year with a net cash position of approximately $19.5 million, consisting of $79.5 million in cash on hand net of $60 million in borrowings.
Leigh Mackender, Managing Director of Service Stream, said the business is benefiting from a broader strategy to progressively diversify across critical utility infrastructure markets and to expand its service offerings.
“These markets are well understood by Service Stream, and hold positive long-term outlooks associated with increased urbanisation and consistent expenditure associated with maintaining and upgrading critical infrastructure,” Leigh stated.
“Although there has been some impact to the business due to COVID-19 restrictions, we have been able to continue supporting our clients since the start of this pandemic,” he added.
Service Stream outlined a number of these impacts in yesterday’s release, which included increased costs to support specific safety-related protocols, reduced residential land development activity, project delays, and the deferral of some proactive maintenance activities.
While the global COVID-19 situation remains on edge, Leigh seemed optimistic about the company’s standing for the future. He noted the company’s strong balance sheet and drew attention to its “significant contract base of strong annuity-style revenues.”
Over the next 12 months, the company intends to secure additional organic growth opportunities, re-instate a number of agreements that are due to expire, and support ongoing growth and diversification.
Service Stream shares are up 3.02 per cent to $1.88 at 11:27 am AEST.