SKS Technologies – 1H25 Results Summary
Overall Report Tone
📈 SKS Technologies has delivered a strong 1H25 performance, with record revenue growth, significant profit expansion, and robust cash flow generation. The company has demonstrated continued execution on its strategic priorities, particularly in the data centre and technology sectors. Additionally, cost discipline, margin expansion, and an inaugural interim dividend highlight the company’s financial strength and commitment to shareholder returns.
📊 Financial Results
| Metric | 1H25 | 1H24 | % Change |
|---|---|---|---|
| Revenue | $115.94M | $53.66M | +116.1% |
| Adjusted EBITDA | $9.81M | $2.99M | +227.7% |
| Operating Cash Flows | $18.99M | $3.80M | +399.7% |
| Adjusted EBT | $8.37M | $1.82M | +359.6% |
| Normalised EPS | 5.16c | 1.66c | +210.8% |
| Dividend (Interim) | 1.0c (first declared) | 0.0c | N/A |
🆕 New Information Provided
✅ Work on hand has doubled since 1H24, reaching $174M, driven by strong demand in data centre projects.
✅ The tender pipeline has tripled from $117.5M in August 2024 to $334.8M in February 2025, reflecting significant market opportunities.
✅ Inaugural interim dividend declared (fully franked, payable on April 4, 2025).
✅ Debt remains at zero, as strong operating cash flow fully funds growth.
✅ EPS grew over threefold, indicating strong bottom-line performance.
🔥 Positive Surprises / Strengths
🚀 Revenue more than doubled YoY, showing strong project execution and industry demand.
🚀 EBITDA grew 227.7%, highlighting operating leverage.
🚀 Cash flow generation surged, supporting growth without external capital.
🚀 Strong balance sheet, with zero debt and growing working capital.
🚀 First-ever interim dividend, reinforcing shareholder returns.
⚠️ Potential Concerns / Risks
🔴 Employee benefits expenses increased by 149.8%, potentially impacting future margin expansion.
🔴 Heavily reliant on data centre projects, which accounted for 61.3% of work on hand.
🔴 Working capital doubled, which, while supporting growth, requires careful cash flow management.
📉 Results vs Market Expectations
📌 Revenue and profit exceeded consensus estimates, driven by strong execution and backlog conversion.
📌 EPS of 5.16c was significantly above prior expectations, reflecting strong operational performance.
📌 Dividend introduction was a positive surprise, indicating confidence in cash flow stability.
📌 No debt despite aggressive expansion was well received by investors.
🔭 Outlook and Guidance
🔹 FY25 Revenue expected to be ~$260M, implying continued strong growth.
🔹 Targeted PBT margin of 7%, consistent with 1H25 performance.
🔹 Significant tender pipeline ($570M as of February 2025) supports strong revenue growth expectations.
🔹 Further investment in expanding work on hand and operating efficiencies.
🌍 Market Positioning
💡 SKS is benefiting from strong demand in the data centre market, which is expected to grow to $40B by 2030.
💡 Company is diversifying across multiple sectors, including defence, healthcare, and corporate markets.
💡 Expanding geographical footprint, leveraging Australia’s attractiveness for data centre investment.
💡 Enhanced operating framework ensures sustainable growth and scalability.
📈 Share Price Performance
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.
Quick Take: H1FY25 ASX:SKSQ