Thank you for standing by, and welcome to the SRG Global full year results and the Diona acquisition investor briefing. All participants are in a listen-only mode. There will be a presentation, followed by a question and answer session. If you wish to ask a question, please enter it into the Ask a Question box and click Submit. I would now like to hand the conference over to Mr. David Macgeorge, Managing Director. Please go ahead.
Thanks, Darcy, and welcome everyone to the call. Today, it's a really pivotal day for us in terms of SRG Global's journey, very much a transformational day for us as a business. Quite a bit to get through today, so I'll really touch on the key themes of the business and the go forward. But before I do that, I'd really like to acknowledge our people. There will be a lot of SRG Global people on this call. You know, they've done a terrific job, and not only in the last twelve months, but in the last four to five years of really transforming this business and really living and breathing what we stand for: live for the challenge, smile together, never give up, and have each other's backs.
I really wanna acknowledge the great work they've done, and I'm proud to be a part of the team. As I mentioned, there's a lot to get through today, so I will really stick to key themes. If we move to slide 2, which is executive summary, and really what you're seeing here is just evidence, you know, of the delivery of the business. So I'll focus on FY 2024 first, then we'll talk about the acquisition and the way forward, and we'll stick to the key themes. I think from an FY 2024 perspective, it's a record result. You know, AUD 98.5 million EBITDA, up 23%. EBIT up 31% to AUD 65.6 million. You know, a terrific result and a continuation of the growth of the business. Continued strong returns to shareholders.
You know, EPS up 15%. Our second half dividend of AUD 0.025 a share, taking the full year dividend to AUD 0.045, which is 13% up on last year, showing our, you know, dividend yield fully franked to 6% plus. Which really and we've done a great job, I think, in terms of balancing both the growth and the yield dividend for shareholders. Excellent cash generation continues our strong track record of cash generation, which really underpins the business. You know, a terrific result, moving from net debt of AUD 17 million to net cash of AUD 17.8 million. It's off the back of 117% EBITDA to cash conversion, and a really strong result.
We'll go into the detail of the 24 results, but I think overarching, you know, a terrific result and a record result for SRG Global in our history. In terms of the way forward, and today, we're really pleased to announce the transformational acquisition of Diona. You know, they're a market leader in water security. They need to transition, pretty transformative deal for us, and I'll talk through the detail of that. It's circa 10% EPS accretive. You know, it continues on the way forward of our track record of winning and executing work. We now have AUD 3 billion work in hand. You know, we've transitioned the profile of the business to 80% annuity recurring earnings, and really gives us terrific platform and visibility into the future on how we will grow the business.
We've increased guidance for FY 25 to circa AUD 125 million. That includes a 10-month contribution from Diona, and, you know, in the footnote there, really breaks that down and assumes an 11% growth rate for the SRG Global core business, plus a AUD 16 million EBITDA contribution from Diona, which is for a 10-month contribution from them. So it really provides, I guess, some certainty and scale and size of the business that we are today and the business that we are moving forward. But getting into the FY 24 results, so slide 3, always, we've got a great video on our website which talks about the different offices and locations on which we work. This is the West Wind Farm with Meridian Energy in Wellington.
It's probably one of the nicest offices that we have in the business, although I'm sure our people at Jervois Bridge, doing the bridge construction job, would probably argue with that. But, you know, we're really proud on the locations that we work within. We're going into sort of the numbers on slide four. As I mentioned, it's a record financial result. You know, revenue up, EBITDA up, EBIT up, profit up. Really strong margin performance. For those who have followed us for a while, I, you know, was guiding the market with 9% EBITDA margin performance this year. We had some contingencies tipped out at the back end of 2023, which was, you know, took that to a little bit higher.
But, you know, really pleasingly for me, you can kind of see the flow-through from EBIT and NPAT in terms of the margin flow-through, which is really, I guess, us starting to realize some of the benefits of becoming a much more capital light business as an overall group. I mentioned earlier, dividends per share up 13%, earnings per share up 15%. And look, for me, you know, an absolute highlight is the net cash position we've got to today. But look, I think the numbers tell just part of the story. It's the quality that sits behind the numbers and the quality of the business that we are today, and I really link that back to strategy.
We've had a very clear strategy for a long period of time, and we're really doing everything that we said we were going to do and executing what's been a very, very clear strategy for the business. I'll move into slide five. That really gives you some of the, I guess, the key financial highlights over a bit of a trend. You can see the really positive track record of delivery and the sort of trend around EBITDA, EPS, dividends, you know, along with the terrific growth in EBITDA and cash conversion. Probably for the more detail-minded, on slide six, it really sort of goes into some of the more key financial metrics. And look, I think there's not a metric on this page that we have not absolutely met and exceeded.
I think if there's one slide to take away from this entire deck, it's this slide, which really highlights the long-term track record of delivery for this business. But it also goes to the quality of the business that we are today. You know, we're delivering on every metric. I think the 80% annuity recurring earnings is, you know, a key highlight for us, and I think this is absolute evidence of the transformation of the company, but in some ways doesn't do justice to the quality of the earnings that sit behind that and the quality of the business that we have today. If I move to slide 7, really, you know, in a bit more detail around the positive cash generation of the business, EBITDA cash conversion of 117%.
We've moved from net debt to net cash, you know, really good free cash flow. It really continues our strong record of cash generation in the business, and then which really is a good underpinning of the growth of the company. We've got a really robust financial position from a balance sheet perspective. You know, we're well-funded for growth. Good liquidity has given us the ability to do what we've done today, but also maintain a really strong balance sheet and flexibility as we move into the future. There is more details in the appendix on the FY 24 financials at the back of the presentation, so, you know, given how much we have to go through today, I'd encourage you to look at those post this call. The thing overarching, if we move to slide nine, it's underpinned by a very strong foundation.
You know, running a public company at times, probably in the early days, I used to get worried a bit in terms of, you know, everyone seeing our strategy and they're seeing our performance. But really, it's not the best widget or the smartest strategy that's driving our performance, it's our people and our culture, and that's really driving, you know, what we're doing today and living and breathing what we stand for: Live for the challenge, smarter together, never give up, and have each other's back. So I break down ESG in a bit more detail on slide ten. Look, there's a lot we're doing in this space, and really what we've tried to do here is to give some of the examples of that. Firstly, from an environmental perspective, you know, we've implemented Sustain.Life software platform to track our emissions.
You know, we've got different initiatives such as green concrete, local tree planting initiatives, there's solar-powered facilities, and really, for us, it's about being real and making a difference. It's about having I mean, working with our clients, smarter designs, different innovative ways to doing things to really drive the sustainability of the planet that we live on. From a social perspective, you know, the Bugarrba Aboriginal Joint Venture is progressing really well with both FMG and BHP. We're on our third Reconciliation Action Plan, and we're doing a lot of really good work in the social space from a partnership perspective, you know, and the local communities on which we operate.
You know, particularly proud, proud of the work we're doing with Qantas and Shooting Stars, which is all around driving development opportunities for the young indigenous men, and women, and we really wanna be a local, good community partner into the future. From a governance perspective, you know, it's a continued focus and refinement of our risk management framework. It's a very robust framework. I think it's really... I'd like to call out just the great work we're doing in the psychosocial space. You know, it's not just an issue for, for industry, it's an issue for society, and there's some really good proactive things that we're doing on that psychosocial perspective. I never like to call out safety. I always call it the glass ball in business, that you can never afford to drop.
You know, we continue to make great strides from a safety perspective. Our trip is at three, which is the lowest level it's ever been, but every day is a new day, and it's a glass ball that we can never afford to drop. So a pretty quick summary of FY 24, but, you know, an absolute outstanding result for the business. You know, we're in exceptionally strong position, gives us a really strong foundation, and has us now well poised to do what we've done today, which is to announce the acquisition of Diona. So before I get into the detail of. I'm on slide 11 now. Before I get into the detail on Diona, there will be a number of Diona people on this call. I'd really like to welcome them to the SRG Global family.
We're excited about the future, and you joining us. I will be around the business over the next couple of weeks to meet with you all, and, you know, it will be a very exciting future for everyone. If I move to slide 12, which really sort of gives you a bit of an overview of the acquisition. Now, Diona are a leading end-to-end provider in water and energy markets. We've acquired the business through AUD 111 million on a cash-free, debt-free basis. It's an implied EBIT multiple of 6 times FY 2024 earnings. It's very capital light business, not a lot of D&A in the business, and, you know, we've transacted well. From a funding perspective, we are doing an equity raise at AUD 60 million. That's fully underwritten.
We're doing a AUD 6 million SPP, and then the balance will be in cash and debt facilities. I guess, what will the business look like as we sit here from a pro forma basis in FY 24? You know, revenues of just under AUD 1.3 billion and EBIT of 84 at circa 10% EPS accretive. It's margin expansionary from an EBIT perspective. It's gonna give us terrific cross-selling opportunities, and we're maintaining a very modest gearing ratio of just under 0.3 times net debt to FY 24 EBITDA, and I think that's a really important measure on FY 24 numbers. And for us, it's about maintaining a really strong balance sheet and having flexibility to continue to grow into the future. We plan to conclude the transaction at the start of September.
As I sort of mentioned at the start of the call, you know, our FY 25 guidance is 125, and that includes a 10-month contribution from Diona. So, Diona on slide 13, to give you a bit of an overview of the business. You know, they are a business we have tracked for some time, and look, in many respects, they've undergone a similar transformation to ourselves in terms of the commercial model and really how they've grown their business. They've been around since 1980. A family owned business, a leading end-to-end partner in design, engineering, and project execution. It's all through long-term program and asset management agreements, and it's with full self-perform capability, which very much aligns to the SRG Global model, where we basically self-perform everything that we do.
They play in two key end markets, water security and energy transition. You know, clearly markets that have got significant tailwinds in front of them. They've got really broad geographic reach. 100% of their work is East Coast, but pretty evenly split between Queensland, New South Wales, Victoria, and SA. A very client-focused, collaborative approach with, you know, long-term partnerships with leading utilities and government agencies. Nearly all their work is with government and utility agency providers. A lot of common and very complementary clients, a lot of common clients to SRG Global that we know today, but some also very complementary ones. Comes with a skilled workforce with a lot of engineering expertise, long-term track record of delivery, and it comes with AUD 1 billion dollars work in hand.
When you think about a business that's turning over just over AUD 200 million, that highlights the visibility of work into the future that's secured. We sort of delve into, you know, why have we done this? Now, we're a very natural owner for SRG Global, as we move through to slide 14. You know, from a strategic rationale perspective, it really strengthens our position in water security and energy transition. You know, they're a leading provider with 40 years of history, very embedded with utility and government agencies, and playing in two key attractive markets of water security and energy transition. It's very complementary capability to SRG Global.
It really adds that whole full service program and asset management, service, and will unlock a lot of revenue synergies in terms of the cross-selling opportunity, which is a very strong part of the SRG Global culture. Comes with a high-quality management team, well led by Tom Melvin and Lincoln Marr and the team. Everyone will transition with the business. This is not a cost synergy play. It's all about revenue synergy and growth moving into the future. Really enhances our annuity recurring profile. You know, it moves us to that eighty-twenty split, which has been our long-term strategic aim, very much in line with our strategy. Comes with AUD 1 billion work in hand, a really strong pipeline of more than AUD 2 billion, which, if I'm honest with you, is probably undercooked in terms of the real size of the opportunity.
Provides significant cross-selling opportunities, and is a financially attractive acquisition, circa 10% EPS accretive, pre any synergies or cross-selling opportunities. Very capital light business, with CapEx less than 1% of revenue, and really complements our capability in some very attractive sectors of both water and energy transition. As we move to slide 15, it really highlights probably in a, you know, I think, a fairly simple schematic, the core capability of Diona. It's a full service program management business. You know, from a water perspective, you can see that kind of full service across the different types of structure and infrastructure in the water space. And then from an energy transition perspective, you can kind of see both from an electrical and gas perspective, and a lot of this is in-ground services and substation work.
In some ways, think of them as a connector style business, and it's a full suite of services. Look, in reality, SRG do a lot in both these sectors as well. I think the key thing here is these are critical services for our clients. This is not about, you know, watering the garden, doing the landscaping, doing the laundering, the laundry, or catering. These are critical services to clients, which makes both the owner and us critical to them. If I move to slide 16, it really highlights, you know, two things. One, the absolute unparalleled end-to-end self-perform capability. It is quite unique compared to a number of competitors they play against.
You can see the sort of level of detail and the collaborative nature, and the deeply embedded nature that goes with that in terms of early engagement, advisory work, community engagement, design and engineering, program management, delivery, and asset maintenance work in the entire asset lifecycle. It's deeply embedded. Now, more than 96% of our work is with utility and government agency providers, and these are full program asset management agreements. This gives you a little bit of a split about the makeup of that. You know, 84% of it's cost plus or schedule of rates for certain fixed price elements, but you can see it's a really, really robust commercial model and a low risk commercial model.
I talked about being deeply embedded with clients, and if we move to slide seventeen, I think it really highlights just the low risk, collaborative nature of the business. You can kind of see it's all under long-term agreements. You can sort of get a sense of the tenure that some of our key clients we have, and probably the really obvious opportunity here is they've got a very strong East Coast presence. Now, clearly, SRG Global has a broader footprint, particularly opportunities in the West and New Zealand as well, which will open up opportunities both ways, certainly from a geographic perspective for Diona, but also, I think some of the complementary clients that Diona has today.
I think with the tenure and visibility and collaborative nature of the work we do with our clients, it puts us in exceptionally strong position. If we move to slide eighteen, we really probably touch on some of the key end markets. You know, clearly, these are. When we talk about water security and energy transition, these are key growth markets. They are growth markets that we play in today. There's quite a bit of detail here, so look, I'll try and bring it to life. SA Water is a really good example. We have an eight-year contract out to twenty twenty-nine, which is upgrading and renewal of their water mains, treatment plants, storage tanks, and facilities. In the gas space, APA, an eight-year contract to upgrade and renew gas mains as part of the national mains replacement program.
In the sort of energy space, you know, Ausgrid, which is a relationship that Diona's held since 2006. Term contracts all around upgrading the network assets. So clearly well-embedded with clients on what are two very, very pivotal end markets for Diona.... The next four or five slides are very much on a market overview. You'll have seen that in many different forms. So I really probably, I think the key takeaways, as we move to slide 19, is, you know, growth, tailwinds, and spend. And they're the key three messages of these four or five slides. I'm not going to go into the detail, but clearly, there's significant in spend in both water infrastructure and energy infrastructure as we move into the future.
If we sort of delve down into a little bit more detail, moving to slide 20, you can kind of see from a water infrastructure perspective, you know, some of the macro drivers of that, the population growth and climate change, urbanization, aging assets, and technological advancements. You can kind of see the growth trend in terms of spend. You know, just, you know, there's some very public market information from some key clients. You know, Sydney Water are planning to spend AUD 34 billion over the next 10 years, AUD 9 billion over the next 3, and it really gives you an example of the sort of spend coming up in that particular sector. Really, one of the things driving that as we move to slide 21, climate change is having quite an impact.
You know, Diona's got a very strong rural presence, so nearly two-thirds of their business is rurally based. And, you know, extreme weather events are certainly placing pressure on these assets, and really provides opportunity for Diona to provide their full program management and maintenance skills. We move into sort of the energy space on slide 22. Look, I think the key messages here, there's obviously an absolute push to renewables, energy security, and modernizing existing networks, and you can kind of see the spend, that's coming up. And Multinet Gas is a good example, you know, AUD 670 million up to 2028, Ausgrid, AUD 3.3 billion up to 2029. It really shows you that growth trend over the next four to five years. But as we move to slide 23, this is not a three- to five-year growth horizon.
This is a 20- to 30- to 40-year spend and growth in front of us. You know, significant tailwinds provides a significant opportunity into very, very attractive sectors that we know and know well today, and it provides further opportunity for us to take it into the future. I'll touch on some of the key pro forma financials. Now, we might flick a couple of slides forward to slide 25. You can see our pro forma revenue and EBITDA there. Revenue just under AUD 1.3 billion, AUD 118 million EBITDA. I think it just gives you a sense of the scale of the group, that we are today. We've obviously called out AUD 125 million for FY 2025 in terms of guidance from an EBITDA perspective.
That includes ten months' contribution for the owner, not the full twelve. We delve into some of the more detailed financial metrics. You can clearly see from an EBIT perspective, being a very capital light business on Slide 26, you can see EBITs move from 65.6 to 84 on a pro forma basis at a 28% uplift. It's expansionary from an EBIT margin perspective. You know, SRG Global, as a group, you know, does punch above its weight in terms of margins we historically get as a group, and this only improves that situation. EPS accretive of circa 10% and, you know, maintaining very modest levels of debt, with gearing, net debt to EBITDA, you know, just under 0.3 times, and these are FY 24 numbers.
Look, it's all for us around continuing to maintain a very strong balance sheet into the future. We move to sort of slide 27, which gives you a little bit of a feel of the business mix. It's a very attractive business mix. Probably a couple of key things I'll call out is the 80/20 annuity recurring earnings mix that you can see there in the middle row. I think from a geographic perspective as well, in terms of the other business that we are today now as a combined group, with 50% of revenue on the East Coast, 5% in New Zealand, 45% West, really well spread. I think you'll see that in a further slide in the deck, just, you know, the really geographic footprint and opportunity that comes with that. That's a bit about Diona.
You know, really excited about that. I think our ultimate focus in the first three to six months will be all around cultural integration and really sort of getting the business to operate. You know, it's a really good performing business today, and it'll be about bringing into the family. In reality, Diona, talk about language, it will be very common language between our two businesses, and I'm really excited about the future of that business. To kind of move gears now to a bit more of the way forward as a company and what we are today, as we move to slide twenty-nine. You know, this is us today. You know, a diversified infrastructure services business, and what we do is bring an engineering mindset to deliver critical services across the entire asset life cycle.
I think the key here is to really remind everyone on this call, it's the critical services that we provide. They're critical to our clients, which makes us critical to them, and what we want to be, our vision's the most sought after in what we do. Others might say, "Number one, market leader." For us, you know, when clients have a challenge, a problem, an opportunity, the first people I want them to think of when they pick up the phone is SRG Global and us making it complex, simple for them. For a profile perspective of the group now, I think you can get a really good sense now on Slide 30 of the scale of the business. You know, more than 4,000 people, and revenue's pro forma of circa AUD 1.3 billion.
You can sort of see the geographic split, an 80/20 mix from annuity earnings perspective. You can kind of see the geographical reach that we now have as a business. Moving to Slide 31, you know, we will report on two operating segments moving forward: maintenance, industrial services, and engineering and construction. That's really to align the profile to the business that we are today, and there's some more detail on that in the appendices. So delving into some of the key services that we have today on Slide 32, you can kind of see the core services that we provide. We're a very diverse service offering. I think, you know, a couple of the key takeaways here, just the quality of the clients that we have today, and that's the diversity of the services and the sectors on which we play.
Moving to Slide thirty-three, which is engineering construction business. You can kind of see the core services we provide. They are very specialist in nature. Again, the quality of the clients that we have in this space. And the lion's share of this work is very much in an ECI long-term partnership arrangement. They're almost like a formal collaborative agreements as well, which gives us really long-term visibility in the engineering construction side of the group. Slide thirty-four, which is our strategy. Almost a bore, boring, putting up this slide in terms of we've had a very clear strategy for a long period of time. You know, we're continuing to deliver against that strategy, and with the Diona acquisition, that takes us to that eighty/twenty split from an earnings perspective, which has, you know, been a key objective of ours, you know, from a strategic perspective.
You know, for us, it's just going to be continuing to delivering against what's been a very, very clear strategy for a long period of time. I think slide 35 really highlights the terrific platform that we have today. AUD 3 billion work in hand, an AUD 8.5 billion pipeline, which is probably a bit undercooked in terms of the real size, gives us a terrific platform to really leverage the footprint, that we have today. I think that's really driving what is significant momentum in SRG Global as we move to slide 36. You know, we've increased guidance to AUD 125 million. You can see the strong growth trajectory from an organic perspective, overlaid with the Diona acquisition, pre-being work in hand, really positive exposure to great sectors in water, defense, resources, transport, and energy.
Now, that earnings profile of 80% annuity and in reality, the transformation to diversifying infrastructure services will continue to deliver results. And for us now, it's head down, bum up, and it's continuing to keep doing what we said we would do. And I think that's really the investment proposition of SRG Global when we move to slide 36. You know, it's end-to-end asset life cycle capability, where we self-perform everything that we do. You know, we play in very diverse sectors and geographies, and I always say that gives us a natural hedge, that we're not weighted to any one client, one sector, one geography, but gives us a very broad platform on which to apply our skills.
We're a highly scalable business and business model with experience, systems, and structure to be a bigger business than we are today, and we continue to show that through the execution of the company. A high level of annuity earnings profile, which gives a lot of visibility and predictability to the future infrastructure earnings of the group. A very capital light investment profile with CapEx, circa 2% of revenue, a really good high yield dividend stock. And I think that's something that we've done really well over the journey, is balancing that growth and dividend elements of the business. Now, it's a really pivotal day in our journey. Today, I'd really like to thank shareholders for all the support that they've given through this journey.
You know, we feel like we're only getting started on where we can go, and I'd once again like to really welcome the Diona people and really thank all SRG Global people for their great efforts in the last twelve months. We've got a terrific platform. It's about staying disciplined and focused, and we'll keep doing what we said we were going to do and building a company that I know we can be. There's a bit of detail post that in terms of the equity raising. I won't sort of go into any of that detail on this call. That'll be for people to read post this call. So perhaps it's an opportunity now to open up for any questions which, Roger, you might host.
Okay, thanks, David. Yep, there's a few questions that's come through, so we'll just go through it one by one. So, a couple of questions here around the EBITDA. So we talk about the EBITDA visibility for FY 2025 on the guidance of 125.25. So what visibility do we have from the EBITDA perspective?
I think if you call it 80/20 as a starting point before we sort of get into the engineering construction side, I think, yeah, clearly, we've got very high levels of visibility in 2025, and we've come out with a, you know, very specific number early for the market, and you know, I think it continues our track record of providing good, clear guidance and delivering against it, so the visibility is high.
Okay, good. One on cash conversion. Good cash conversion this year, 117%. How do we think about cash conversion going forward?
I'm not, I'm not here to sort of provide cash guidance. Yeah, 117% this year, and clearly, there was a bit of flow over from last year into this year. I always say, look, use 80% as a good starting point, and it'll sort of flex a little bit up and down from there. But, you know, look, our cash generation really got to look over the long cycle, and we expect to continue to be really good, strong cash-generating business.
Yep. Okay. Thanks, David. So again, on Diona, AUD 19.5 million EBITDA in FY 2024. How do we think about synergies and the go forward?
Look, it's not a cost synergy play. I mean, a lot of the property, for example, is actually, you know, our people work in our clients' facilities. Look, from a revenue perspective, you know, clearly, we've called out guidance for 2025. And look, in reality, you know, we expect to grow that business very, very strongly over the journey. And, look, you know, and all things being equal, we should start to see some of that in 2025 and really kick in in 26, 27, 28 and beyond.
All right. Terrific. One around, you know, we talk about EBITDA margins for as a group between 9% and 10%. How do we think about that in the go forward?
I think obviously, Diona, a very capital light business and a lot of... not a lot of debt in the business. Another call out in the presentation, it's EBIT margin expansionary. So, and clearly, it's you know, really good EBIT margins are continuing to improve the profile, the overall margins of the group.
All right. Terrific. One specific one around lease repayments and where they've shown. So on the, in the cash flow statements, they're shown within the, financing activity section, and we do call it out in our cash flow statement in our investor deck of AUD 12.9 million. So that's the number for that. One around, Diona looks like an amazing acquisition. What rate do you think this business can grow under SRG's leadership?
... Look, I think for us, you know, we've, you know, continued to grow the underlying business, to go forward to a circa 10%, and, you know, I think, that would be a reasonable, profile for Diona as well. I mean, I've, in reality, we've called our base case for FY 25, and look, I'm a massive believer, bring a business in, integrate it well, get it operating and, part of the, part of the overall group. And, you know, to me, it's not about the first three to six months, it's about how we build and grow this business over the, long term. But, in reality, we're expecting to, to grow it well into, into the future.
All right. One around Diona's work in terms of the mix between infrastructure spend from a new build perspective versus existing asset maintenance. And I think it's a good mix between the two?
Yeah, it's a good mix, but, you know, primarily more towards that asset, maintenance elements or any kind of upgrades, renewals, and maintenance-
Yeah
Work under a program management framework.
I think it's important to emphasize that definitely with that capability, well-placed to actually capture the transmission network upgrades that are about to come through.
I think if you look at some of the different things that we do, you know, we've had a relationship with Transpower New Zealand-
Yeah
For more than thirty years, and then you think about some of the other different businesses we play in. I'm pretty excited that finally, I'm gonna talk to someone about dam anchoring, and they're gonna be as excited as I am. And look, yeah, we do a lot in the water energy space, and particularly, we've got quite a bit in the maintenance from a renewables perspective. And look, I think there will be more and more opportunities. You know, Asset Care is another great business. When you think about Diona services, a lot of in-ground services, some of the biggest spends are more in that asset monitoring, inspection, testing, advanced non-destructive testing. So it's, you know, really good opportunities for the cross-selling of that.
Okay, one around acquisitions. Just a general question on how do we make sure that this acquisition is a success, I guess?
Look, I think it's ultimately down to culture and, you know, it's all about that's where things succeed or fail, and, you know, time on the team, you know, really, really strong leadership team. I think we're a very natural fit for that business. It will create opportunities for people within the Diona group, and, you know, that to me will be my focus.
Yeah. Terrific. The next one's around revenue synergy examples. We kind of touched on this.
I think I probably touched on that enough.
So one around where Diona previously lived within a larger ownership structure, I guess, with other sister companies, and how do you think its performance can improve even further, given its new association with us?
Because obviously, it's a family-owned business since 1980, and then got taken over by Calibre and then reverse management buyout. It's the last of the assets that the O'Connor family was holding. You know, for us, I think, you know, what does SRG do? It pretty much opens up a bigger footprint, perhaps a bigger balance sheet. And I think as a combined offering, it really, you know, it really puts us up as an absolute key player in the space. And look, I think I'm at pains to point out, this is a very, very well-run business. It's not for me to walk in and help them. They know what they're doing. They're running a really good business. They've done an amazing transformation.
Yeah.
And, you know, I think, you know, we can add some things in terms of perhaps unlocking further opportunities in the broader group, but vice versa, probably opening some doors that weren't open to this point in time.
Yeah. All right. Perfect. Just some commentary around Diona's past performance over the last few years.
Yeah, look, it's probably a business not that dissimilar to ourselves, more project-based business historically, and in the last sort of few years, it's really in some ways shrunk back to sort of change the commercial model to start growing, and made really good growth in the 23- 24-
Mm.
cycle. And you know, there's you know significant further opportunity to go. But you know what I see with the sort of revenue visibility and the kind of term that they have, it's you know they've got an amazing foundation on which to build.
Okay, one around, I guess, a specialist drill and blast business, which is a mining services division in the past, and obviously is now amalgamated into the maintenance and industrial services section. So how was the performance last year compared to this year?
Really strong performance, and I think it probably, you know, it is not a mining services business. It's specialist drill and blast and geotech-
Yeah.
-specialist drill and blast in resources, water, and civil, and geotechnical maintenance in civil, and resources. Terrific performing business, you know, well led by Nathan Steiner and the team. A lot of good software, with that particular business. That plays out primarily in the gold space with great clients. But, you know, in terms of the overall profile of the group, and it is an industrial service that sits in the maintenance industrial services segment, and it's probably been pegged wrongly.
Yep. Perfect. What was the process around acquiring Diona? Was it a competitive process, and why, why are they selling now?
Yeah, look, I'm not going to go into too much detail on the process, but these were exclusive discussions-
Yep
through bringing this opportunity to us and executing the opportunity. And look, I think as I called out earlier, you know, this is the last of three assets that were held, Calibre, G&S, and Diona, and this is the last of those assets. And ultimately, you know, that's, you know, it's been under an exclusive arrangement.
Yeah. What's the share price for the AUD 60 million equity raise?
You probably take on that one.
AUD 0.83, is that one? Simple. Talked a bit about a SRG commercial framework. Can you provide some color around Diona's commercial framework, and, how do we manage the risks, particularly within those sort of contracts that are fixed price?
I might save my voice for a second. Roger, do you want to touch on?
Yeah. So I think it's important to note that almost all of Diona's work is actually secured under the long-term type agreements, and even the fixed price elements there are actually secured within that framework. So you actually get a chance to work through the clients in a very, in a very collaborative manner, to work through the profile of works, whether it be under whichever commercial framework it is. And I think to David's point, I think a great example of why that is the case is that the embedment within the client's offices, where you know the Diona personnel are sitting with the clients to actually construct the program, to actually design the solution, to actually come up with the program of work over the coming period, whether it be the next six months, one year, two years, three years, is really important to note.
And I think that's again amazing testament to the transformation and the journey that Diona has undertaken over the last few years. So very much a very controlled and disciplined environment, and I guess you know very pleased to say that the disciplines that you expect to see in a business from a reporting and from a controls perspective, we certainly saw as evident within the Diona team. What are some of Diona's biggest competitors?
I think some of the key players, you know, Ventia, Downer, UGL, are probably some of the key players that they play against.
Yeah. Under SRG's ownership and expanded balance sheet footprint, what type of contracts can Diona compete or that it previously couldn't?
Well, I think it just probably opens up more opportunities with the balance sheet that we, that we have on the scale of the overall group, which, you know, to me, is going to give you know, further opportunity for for Diona. You know, I, I'd probably use the Water Corporation as a great example in the West, which we've got very, very close relationships with, and it will open up opportunity, opportunity there. And, you know, we've probably got more balance sheet flexibility as a, as a public company to really grow and fund the growth of that business than under perhaps private ownership.
All right. Terrific. Will the recording of this presentation be available later on? Yes, the answer to that's yes. Have you been approached as a takeover?
Not myself personally, no. But no, we've not been approached for a takeover.
Yeah. Okay, well, that's kind of it. Sorry, I'm just reading through the list one by one. I think we covered everything off on that basis, so thanks, David, and thanks, everyone, for the call.
I wanna really thank, once again, everyone. You know, it's a really exciting day, and I'm really exciting about what we've got in front of us, so thank you for calling in.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.