Ventia Services Group (VNT) H1 2024 earnings summary

Executive summary

• Revenue rose 10.6% to $3,082.5m for HY24, with NPATA up 12.5% year-on-year, driven by strong performance in Defence & Social Infrastructure and Telecommunications, and supported by high client renewal rates and long-term contract stability.

• Upgraded FY24 NPATA growth guidance to 10-12% over FY23, reflecting business momentum and confidence in future performance.

• Interim dividend increased by 12.5% to 9.35 cents per share (75% payout, 80% franked).

• Work in hand at $17.2bn, with a 93% renewal rate, underpins future growth despite a slight decrease from HY23.

• Profit after tax increased 14.8% to $101.4m; basic EPS up 14.8% to 11.85 cents.

Financial highlights

• EBITDA up 9.2% to $246m, margin stable at 8.0%.

• NPATA increased to $106.7m, up 12.5% year-on-year.

• Cash conversion improved 180bps to 90.7%; operating cash flow before interest and tax up 11.3% to $222.9m.

• Net debt reduced to $516.2m, with liquidity at $763.6m.

• Net capital expenditure increased to $28.5m, reflecting investment in core business.

Outlook and guidance

• Upgraded FY24 NPATA growth guidance to 10-12% over FY23.

• Targeting work-in-hand balance above $18.1bn by year-end.

• Addressable market expected to grow at 6.4% CAGR to over $100bn by FY28, providing significant organic growth headroom.

• Positive demand drivers across all sectors, with strong client relationships and contract renewal rates.

• Expecting margin improvement in Infrastructure Services in H2 as sector transitions to energy, water, and renewables.