Service Stream Ltd (ASX: SSM) posted an 18.4% increase in adjusted net profit after tax to $81.1 million for the year ended June 30, 2026, as its entry into the defence sector offset softer telecommunications revenue.
Total revenue rose 2.3% to $2.475 billion, while statutory net profit after tax reached $56.9 million, after excluding $21.2 million in systems transformation and SaaS implementation costs. Operating EBITDA climbed 11.8% to $163.4 million, lifting the group EBITDA margin by 60 basis points to 6.6%. Adjusted earnings per share increased 18.0% to 13.1 cents, marking a cumulative 118% rise since FY23.
The company’s share price rose 1.19% to $2.56 following the presentation, within a 52-week range of $1.78 to $2.72. Service Stream maintained a net cash position of $80.7 million and total liquidity of about $400 million, including $445 million in debt and bonding facilities, with $126 million drawn at year-end.
Defence operations contributed $88 million in revenue during the first five months of FY26, following the award of a multi-year Department of Defence Property and Access Services contract covering base infrastructure across the Northern Territory and South Australia. The segment turned profitable ahead of schedule and is expected to generate approximately $240 million annually at full run-rate. Service Stream secured $3.2 billion in new multi-year agreements during the year, with a 93% retention rate for contracts proceeding to market.
Total work-in-hand exceeded $8.2 billion over initial contract terms, with an additional $6 billion in extension options, bringing the potential order book to $14.2 billion—a 49% increase in secured work since FY24. The company mobilised over 1,600 resources and 350 vehicles across 110 sites, alongside new in-field IT solutions.
Utilities revenue rose 4.2% to $1.05 billion, with EBITDA up 34.0% to $60.7 million and margins improving 130 basis points to 5.8%. Asset and facility management revenue reached $367.4 million, including $88 million from defence, with EBITDA up 44.3% to $24.8 million. Telecommunications revenue fell 9.4% to $1.06 billion, with EBITDA down 12.3% to $91.0 million.
Service Stream completed the acquisition of RiE Group in May 2026 to expand industrial maintenance capabilities and enter oil and LPG markets, complementing a contract win at Millmerran Power Station following its closure. The company opportunistically repurchased $13.0 million in shares during FY26 for equity-based incentive programs and reviewed at least 12 potential acquisition targets over the prior 14 months.
The final dividend was increased 18.2% to 6.5 cents per share, fully franked, with total dividends paid during FY26 amounting to $36.9 million. Capital expenditure and SaaS investments totalled $44.0 million, representing 1.8% of revenue.
Service Stream reported a 179% year-over-year increase in First Nations procurement to $33.5 million and a 44% rise in Indigenous workforce participation. The company offset 100% of Scope 2 electricity emissions via Greenpower and deployed 132 hybrid vehicles, with plans to add roughly 100 more.
