SRG Global (ASX:SRG) outlined what Managing Director David Macgeorge described as an “exceptional” first-half result for FY2026, underpinned by record earnings, strong cash conversion, higher dividends and an upgraded full-year outlook. Speaking on the company’s half-year results call, Macgeorge also provided an update on the recently completed TAMS acquisition and discussed operating momentum across the group’s two core segments.
Record first-half result and upgraded FY2026 guidance
Macgeorge said the company delivered a record financial performance in the first half, reporting EBITDA of AUD 71 million, up 20% on the prior corresponding period. He also cited another earnings measure of AUD 53.2 million, up 26% year over year, and said earnings per share increased 20% to AUD 0.055.
Management upgraded FY2026 guidance, with Macgeorge pointing to an expected full-year EBITDA range of AUD 164 million to AUD 168 million, alongside guidance of AUD 126 million to AUD 130 million for another earnings measure referenced on the call. He said the company typically has a 45/55 first-half/second-half split, and noted a stronger second-half profile aligns with historical seasonality and government spending patterns.
Cash generation and balance sheet position
SRG Global emphasized cash generation as a key highlight of the half. Macgeorge said EBITDA-to-cash conversion was 97%, which he described as evidence of a long-term track record in cash performance.
Net debt declined to AUD 21.2 million, which management said represented rapid deleveraging following the TAMS acquisition and left the company close to a net cash position. CFO Roger Lee added that lease payments appear in the “repayment of borrowing” section of the cash flow statement, and are also shown as a separate line in the company’s cash flow chart.
Macgeorge also pointed to AUD 273 million of available liquidity, describing the balance sheet as “extremely robust” and supportive of both organic growth and future acquisitions.
Segment performance: maintenance leads growth; E&C steady with second-half weighting
Macgeorge reiterated SRG Global’s operating structure, led by two segments: Maintenance & Industrial Services (the largest contributor) and Engineering & Construction. He said both segments delivered strong performance and consistent margins in the half, with Maintenance & Industrial Services showing “step change growth.”
Within Maintenance & Industrial Services, the company cited new long-term contracts secured during the half with:
- Wesfarmers
- South32
- VicRoads
- Tianshi
- Alcoa
- Roy Hill
- Rio Tinto
Macgeorge attributed growth drivers to strategy execution and a market preference among clients to deal with fewer service providers capable of delivering more. He said the company is seeing opportunities across water, transport, resources, ports and marine, and energy.
Engineering & Construction was described as targeted and focused on repeat blue-chip clients with established commercial frameworks. During Q&A, management said E&C margins were around 7% in the half and reiterated that the business has historically targeted margins in the 7% to 8% range, with a view that margins could improve from the 7% level over time.
Macgeorge said Engineering & Construction should be stronger in the second half due to timing of spend, particularly in government-related work. He pointed to activity in water infrastructure, including tanks and dam anchoring, plus transport and defense work, renewables (including the Bonnie Downs Wind Farm with Fortescue), and continued momentum in the company’s facades business across health, education and data centers in Australia and New Zealand.
TAMS acquisition: integration “on track” with focus on revenue synergies
The call included an update on the acquisition of TAMS, which was announced in October and became effective on November 1, 2025. Macgeorge said the integration has started well, particularly culturally, and stated TAMS had delivered “a smidge above” the business case in the first couple of months. He said TAMS is now fully integrated into SRG Global across business, systems, processes and review mechanisms.
Management characterized the deal as a transformational acquisition that establishes a market-leading position in marine infrastructure services, with a capital-light model and capex cited at approximately 2% to 3% of revenue. Macgeorge said the transaction was not a cost-synergy play, with synergies expected primarily from revenue opportunities over time.
During Q&A, Lee addressed contingent consideration for TAMS, saying the company had formed a positive initial view based on early performance and noted there is a 12-month assessment period. He added that TAMS results will be reported over three financial years.
Macgeorge also discussed medium-term opportunity in defense, highlighting Australia’s defense investment program of AUD 330 billion over the next 10 years and said 38% is in the maritime space. He cautioned that defense is a “medium-term play” and described it as a long-term horizon opportunity, while noting TAMS did not operate in defense prior to the acquisition.
Work in hand and strategic priorities
Macgeorge said SRG Global’s work in hand reached a record AUD 4.2 billion, up 24% from the prior year. He reiterated the company’s annuity-style earnings profile of 80%+, which management said supports visibility and predictability.
Looking ahead, Macgeorge said SRG Global intends to maintain a consistent strategy focused on step-change growth in maintenance, targeted execution in Engineering & Construction, and continued discipline in acquisitions. When asked what capabilities the company may pursue in future deals, he said the group is focused on organic delivery and integrating TAMS, while indicating interest in complementary maintenance and industrial services capabilities, including potentially bolstering mechanical capability if the right opportunity arises. He added the company aims to be “ready, but not needing to do anything,” emphasizing nimbleness and selectivity in M&A.
The call also included leadership acknowledgments, with Macgeorge noting the retirement of long-serving directors Peter McMorrow and Michael Atkins, and welcoming incoming directors Mark Foster and Alan Rule.
About SRG Global (ASX:SRG)
SRG Global Limited provides engineering-led specialist asset maintenance, mining services, and engineering and construction services in Australia and internationally. The company operates through Asset Maintenance; Mining Services; and Engineering and Construction segments. The Asset Maintenance segment supplies integrated services to customers in various sectors, including oil and gas, energy, infrastructure, offshore, mining, power generation, water treatment plants, commissioning, decommissioning, shutdowns, and civil works.
