Welcome everyone to the call today for our FY 2021 results. A very pleasing set of results we'll talk about this morning. Welcome everyone to the call. I always like to start with a bit about us on Slide two, which is very much for our newer investors and people newer to the story. Who are we? We're an engineering-led specialist asset services, mining services, and construction group. Think of us as a diversified industrial stock. Our operating model is end-to-end solutions across the entire asset lifecycle of engineer, construct, and sustain. What we want to be, our vision, is the most sought after in the fields that we play in. Others might say market leader, number one. For us, it's being the most sought after in what we do. If we move to Slide three, a bit of a snapshot of SRG Global.
Probably the key takeaways from this slide is firstly the board and management holding of 12% of the company. It's very linked with shareholders and outcomes. Probably other key things to note is revenue by geography. You can see the splits there of 44% on the east, 45% west, and 11% offshore. From a revenue perspective, quite a good balance of revenue spread. Probably other key point to note on Slide three is our global workforce of 2,300 people. This time 12 months ago, it was about 1,800. That sort of shows you the growth that we've achieved in the last 12 months. Before I get into the FY 20 21 review, I really want to acknowledge our people, our team at SRG Global. It's certainly been a fairly challenging operating environment and a challenging world in which we're living in at the moment.
What we stand for at SRG is live for the challenge, smarter together, never give up, and have each other's backs. Our people have absolutely lived, breathed, and embodied that in the last 12 months. I really want to acknowledge them and thank them. I know there's a number of our people on this call this morning, I'm very proud to be part of the SRG group. Which is a good segue into Slide five, the executive summary of our year. Revenue up 4%, EBITDA up 61%, EBITA up 151%. I think for me, the most pleasing part of this from a financial perspective is the quality of the revenue, the quality of the earnings, and the quality of the business that we now have. That financial performance has translated to really good cash performance, really strong operating cash flow.
We've gone to net cash of AUD 12.2 million from net debt at the end of the last financial year of AUD 8.4 million, which is a terrific achievement, despite making a lot of investment in growth and working capital requirements in the last 12 months. We're well-funded for future growth with available funds of AUD 88.2 million, plus an undrawn equipment finance facility of AUD 27.7 million. We've doubled our fully franked final dividend to AUD 0.01 per share, taking the full-year dividend to AUD 0.02 per share, which is really delivering for our shareholders. We have record work in hand of AUD 1 billion. That's up 41% from this time 12 months ago. Also have a really strong opportunity pipeline in excess of AUD 6 billion in diverse sectors and diverse geographies. I'll touch on that a bit more later on.
We've got an annuity earnings profile of two-thirds annuity in FY 2021 and beyond. Our long-term strategy is on track and we're well positioned for long-term sustainable growth. I'll touch on that shortly. We're not stopping here. We expect FY 2022 EBITDA to be approximately 15% higher than FY 2021 performance. I think it's fair to say we're not satisfied. We're just getting started in terms of where we're going as a company and the growth opportunities in front of us. I think it's really on the back of us executing against our strategy, which is a good segue into Slide six. It's executing the growth phase, which has all been around continuing to transition the business mix towards annuity earnings. We've had a very clear strategy in place for a very long time. We're just delivering and doing what we said we would do.
Probably in my mind, we're a bit ahead of schedule from a strategic perspective in terms of how well we've managed to transition to that annuity earnings profile. It really does position us well for FY '22 and beyond. I think it's really good to see actions, performance meet with the strategic pathway that we're on as a company. I think the execution of strategy is one element, but the key element is Slide seven. It's underpinned by great people, our people, who are the foundation of this business. If I look at this particular slide, probably the key takeaway is that we have a highly skilled workforce, 2,300 people. As I mentioned, that's grown significantly in the last 12 months. We have a very specialist workforce, which is allowing us to both access new labor and also retain key talent.
Pleasingly, as we've grown the numbers of people, we've improved our safety performance significantly with a 31% improvement in TRIFR, which is terrific. I never like to celebrate safety results. I always call it the glass ball in business that you can't afford to drop. It's pleasing to see, as we've continued to grow, that we're really managing the safety and wellbeing of our people as well. Diversity is represented in many forms, and we are a diverse business. I guess we're highlighting here the gender diversity of SRG Global from a corporate perspective. Pretty evenly split between male and female. On the operational side of the business, a much more male-dominated workforce.
They're traditionally male-dominated industries. We're looking for new and different ways of attracting more female talent into the group. From a social and community engagement perspective, we do a lot of work with our local communities from a development perspective, from a training perspective, from a sponsorship perspective, but also from linking outcomes, particularly around safety initiatives, with donations to the different foundations of which we're a part of. The local communities in which we operate are very important to us. We are a really good, responsible corporate citizen and contributing to those communities. We've established an Aboriginal joint venture for scaffolding services in the last 12 months called Bugarrba. I think it's the first of its kind in Australia for scaffolding services. It's a 50/50 joint venture with the Njamal people in the Pilbara.
For those that are wondering what Bugarrba means, it means "country" in traditional Njamal language. We're really excited about this joint venture in terms of the future opportunities in front of us. We aim to be a good business with good governance. We've particularly focused on the supply chain governance in the last 12 months around modern slavery, and there's a lot of good work we're doing in that particular space. I think from an overall people perspective, we've made some really terrific strides in my mind in the last 12 months culturally. If you've got good people, you've generally got a good business. The reality is, you're only as good as the people you have, and we've got a terrific level of talent in the business, and we're all working in the one direction. Good strategy, good people translates to good financial results.
Slide eight, that is, I guess, a snapshot of the FY 2021 financial performance. A really solid set of numbers. Probably on this slide, I really just focus on the margin element from a percentage perspective. If we go from left to right, overall, I think probably the key thing to note is the EBITDA percentage margins increased to 8.3% from 5.6%, which is a terrific effort and improvement in the business. If we break down the individual segments, Asset Services, a really solid performance in the last 12 months, which I'll touch on later. EBITDA margins of 11.8%, very much in line with historical levels. I think that's really pleasing given the level of new contracts that we've won in the last 12 months. We're not buying work. It's about adding value through innovation, technology, and smarts.
The mining services business, an exceptional performance, a really disciplined growth, EBITDA margin of 22%, really high utilization levels, which I'll touch on more in a moment, and some really good successful startups in the last period with some of our key clients. On the construction side of the business, which is civil engineering and specialist building, a really improved performance in FY 2021, particularly in the second half. Our EBITDA margin increased to 6.5%. For those of you with good memories, in the first half, our EBITDA margin was 4.8%. I mentioned that as we exit Structures Victoria and really focused on key clients, the margin would improve, and we're seeing good evidence of that, which I think a bit more runway to go. From a corporate perspective, corporate overhead to 2.4% of revenue, pretty low levels. We think there's further scope to leverage that.
We think we can add AUD 2 million-AUD 300 million more on the top line without significantly increasing our corporate costs. We think there's further leverage opportunity there. Look, a really pleasing financial performance. If we move to slide nine, that's translated to really good cash performance, really generating positive operating cash. Our EBITDA to cash conversion was 130%, which is a terrific achievement in the period, and we're really focused on working capital management, converting WIP to cash, getting our payments in on time. I think it's been an exceptional effort, and in some ways, the understanding of cash and how we generate cash runs far deeper in the business now in terms of that level of understanding.
That's been particularly important because we've grown significantly in the last 12 months, and we've had to put a lot of working capital in as starting up all these long-term contracts. That focus on cash has been particularly important for us. I think we've generated some benefit as we've exited certain businesses and the unwinding of that working capital as well. We've continued to invest capital for growth of AUD 17.3 million of CapEx in the period as we start up a number of new contracts which are mentioned in the slide. A really good focus on continuing to pay down debt, lease payments through AASB 16. We've doubled the dividend to AUD 0.02 per share for the year. Just under AUD 9 million worth of dividend payments in the period. Look, a really good performance from a cash perspective, a good financial performance.
What that gives us is a really robust financial position on slide 10. Really strong balance sheet. Available liquidity of AUD 88.2 million, which is comprised of AUD 46.2 million cash in hand and undrawn working capital facility of AUD 42 million.
As I mentioned earlier, we went to net cash of AUD 12.2 million from a net debt of AUD 8.4 million, which is a more than AUD 20 million improvement in the last 12 months. We've got plenty of capacity to grow. We've plenty of bank guarantee and bonding facilities, which have been highlighted there. I think the other key point to note from slide 10 is from a debt perspective, the lion's share of our debt is equipment finance debt. Look, this business is in a very robust position from a financial and balance sheet perspective, which is terrific because we intend to continue to grow, which is a good segue into slide 11.
We have a very strong platform for growth, as I mentioned earlier, we have AUD 1 billion work in hand, which is up 41% on this time 12 months ago. We have a really good pipeline of AUD 6 billion of further opportunities, and we're not stopping here. What I like about our business now, it's a very balanced business in terms of annuity underpinning type work, and then more project-based opportunistic growth. I think that's been the strategic shift that we've made in terms of pure construction companies, at times you can feel that you need to feed the beast, and you have to just keep chasing a tail to get more work. For us, being a very balanced business now with two-thirds annuity earnings, we can be very selective and targeted on that sort of more construction, engineering-based work.
I want to probably switch gears a little bit now in terms of the operating segments of the group. Firstly, starting with Asset Services on slide 13. I think if there's one key takeaway from this slide, it's the quality of the client base. That's probably something we undersell at times. We have very much a blue-chip, tier 1 client base that's valuing what we do and is opening up more opportunities for us. From an Asset Services perspective, that's a terrific recognition of where we're going. If we move to slide 14, in terms of Asset Services year in review. It's had an outstanding year. It's the largest growth and largest earnings segment within the group, with a really strong operational and financial performance. I think if there's one key takeaway from this slide, it's the tenure of the new contracts that we've won.
You can see the quality of the client base. Look at the tenure of the contracts that we've secured, which is a terrific endorsement about where we're going as a company in the future that's in front of us. There's not a silver bullet while we're winning this work. It's really off the back of strong relationships, delivering for clients that's giving us not only repeat work, but new contract opportunities. I think there's no better endorsement of what you're doing than winning new contracts and additional contracts with existing clients. There's a huge focus on innovation, technology, and particularly data and data analytics to differentiate ourselves from the field. I guess it's this entire formula or recipe that's really driving our success in this area.
We've established the guard, as I mentioned earlier, and I'm really looking forward to reporting on our progress over the next periods. If there's a key takeaway from asset services, it's tenure. Our mining services segment, again, highlighting the quality of the client base that we have, an absolute blue-chip client base. Probably the key thing for me with our mining services business is everything we do in mining services is production related, and I think that's really important for everyone to understand. There's construction and exploratory type work. Everything we do is production-based work, and that really sets us up well for the future. If we move into the year in review, really strong performance from our mining services business. Excellent asset utilization in excess of 90%.
We're not a company that will speculatively go out and buy a kit, park it on the fence and try and find work. We run at high utilization levels and really focus on really driving our assets and driving them well. Our key commodity exposure's gold and iron ore, which are very good commodities to be in, particularly when you're a production-based services. We've continued to invest in the fleet, both from a growth perspective and also a sustaining capital perspective as well. We've continued to focus on innovation, high precision GPS, data analytics, semi-autonomous and remote control drilling. Probably 1 thing I really want to highlight is Orbix, which is our bespoke data intelligence software that we've developed in-house at SRG Global. It's now fully integrated both internally and with our clients' system. What it's really driving is good decision making.
This is predictive intelligence software. Not only does it give us insight into what's happened, it gives us insight into what's going to happen, which is highly valuable, not only for ourselves, but more importantly for our clients in terms of making good decisions. That's really driving good performance for our clients and good performance for SRG Global in the mining services space. We do anticipate further growth, both with key existing clients and key sites. There's also a really good pipeline of new opportunities in the mining services space in that drill and blast and geotechnical space. We'll be very targeted. I think if there's a key takeaway from mining services, it's really around that long-term partnerships that we have and how integrated we are with our clients. The third operating segment is construction, which is broken down into civil and engineering and specialist building.
Again, you can see the quality of the client base. In civil and engineering, it's primarily government and government bodies in that transport and water space. From a building perspective, it's really key blue-chip tier one clients such as Multiplex and Lendlease. If we move to the year in review on slide 18. From a civil and engineering perspective, a really solid performance in Australia, a really robust pipeline of government opportunities in that dam, bridge, and tank space. We successfully scaled back our operations internationally in the period in reaction to COVID.
We've really set the business up now that we'll target projects globally from our Australian base and have the civil engineering hub here in Australia, and we'll target projects globally in that dam, bridge, and tank space from Australia and not sort of double up in terms of that resource base that we have. We've had really high demand for the SRG proprietary and engineered products in the period. This is very much a growing part of the group, and we see some really exciting growth opportunities for the SRG products business moving forward. On the specialist building side of the business, our focus here is solely on key repeat clients such as Multiplex and Lendlease, and others. On the specialist facade side of the business, you had a really strong FY 2021, a significant level of work in hand.
I think, Roger, it's the highest level of work in hand.
Yep
that we've enjoyed for this particular business and a really good pipeline of major opportunities over the next three to four years. It's highly visible what the future looks like. The Structures West business performed really well in the period, a really solid level of work in hand, and a good pipeline of growth opportunities. Now we can really see an expanding sector opportunity for this particular business. It's been a really good performer in the period. As I mentioned earlier, we successfully exited the Structures Victoria business, which was primarily in the first half. Look, I think if there's a key takeaway from our construction business, it's really we are delivering world-class engineering projects and landmark sites.
We'll be very targeted and really stick to things that we're good at with clients that we like doing business with in geographies that suit our operational model. I always like to link back to strategy in terms of where we're going as a business, and we'll keep doing what we said we were going to do from a strategic perspective, and that's all around building the most sought-after business in our fields of expertise. We are very much in the growth phase of our strategy, which is underpinned by two-thirds annuity earnings, and we'll slowly converting WIP to cash into the leadership phase of our strategy, where we'll be a zero harm and ESG industry leader and a recognized employer of choice, a key partner of choice in our specialized fields, consistent above market returns for shareholders.
We will look at selective strategic acquisition opportunities that complement us either from a capability perspective or a footprint perspective. Underpinning this will be an earnings profile of two-thirds annuity. I would argue that we're well on the pathway of that leadership phase in conjunction with the growth phase of which we're on at the moment. Looking more shorter term, over the next 12 months on slide 21, from an operating segment perspective, Asset Services is delivering step change growth in diverse sectors with blue-chip clients. Mining Services is operating in high demand, high quality growth commodities, primarily gold and iron ore. Construction is positively linked to government infrastructure stimulus programs. Internationally, we'll focus on specialist civil engineering opportunities in that dam, bridge, and tank space. That's very much more a medium-term play for us.
From an overall business perspective, I really touched on most of these points already. We expect FY 2022 EBITDA to be approximately 15% higher than the FY 2021 result. I think in simplistic terms, if you take the second half run rate and annualize it, we're pretty much there. Hence the level of confidence that we have in calling out the future. We've got regular work in hand of AUD 1 billion and a really good pipeline of opportunities in excess of AUD 6 billion in really positive growth sectors. Supporting that is a really good liquidity and balance sheet position to support that growth and funding requirements. We'll have an earnings profile of two-thirds annuity in FY 2022 and beyond, which makes us a very predictable business as we move into the future.
What we'll do is continue to do what we said we're going to do, and that's continuing to execute what is a very clear strategy, which has us well-positioned for long-term sustainable growth, where we have significant organic opportunities to grow this business over the next three to four years. Which is a good segue to close with the investment proposition of SRG Global. We have end-to-end asset lifecycle capability and an absolute market leader in our fields of expertise. We play in diverse market sectors and diverse geographies, which gives us both very much a broad platform on which to play, but also a natural hedge as different industry cycle, that diversity gives us that natural hedge. We have a high level of annuity earnings profile in the group, which in time will lead to higher multiple valuations.
This is a highly scalable business model where we have multiple levers to grow this business as we move into the future. We're very much a capital light investment profile, which I think is really important to understand as a specialist services business. We're a dividend paying stock, paying off good yields that are fully franked. We're probably in the strongest position that I've ever been in my time with SRG Global. There's absolute momentum in where this business is going, and we're well on the pathway to being the business that I know we can be. I really want to thank our shareholders for their support over the last 12 months. Now we're just getting started in terms of where we're planning to go on the runway in front of us. I again want to really acknowledge our people. Terrific performance in the last 12 months.
We are really working exceptionally well as a team, and I'm very excited with the future in front of us and really proud to be working with the great people at SRG Global. Thank you.
Great. Thanks, David, for that presentation. We're on to the question time at the moment. Excuse me.
I will apologize for Roger. He's feeling a little bit under the weather.
I'll push on.
He's soldiering on.
Thank you for some questions already on the platform. The first one that's come probably through, can you elaborate on the difference between the annuity and the recurring earnings streams?
I think annuity and recurring sort of one and the same.
Yeah
in many respects. Annuity is more just long-term contract-
Yeah
style work. We have multiple year contracts where it is just continuing to come through the door. Well, I guess the question is more about annuity than recurring, which is the same.
Yeah.
Project-based earnings is more, I guess civil engineering and building work where it's project-based for an individual project as opposed to a long-term contract with a customer.
Yeah. I suppose the key takeaway again is that we're two-thirds, one-third, two-thirds in the annuity-
Yeah
Recurring earning space, and a third project-based space.
Yep.
All right. Terrific. Question on dividend policies. Is there a set dividend policy for SRG and traditionally, what have we paid and where do you see that going forward into the future?
Yeah. I mean, we don't have a set policy per se, but traditionally we've paid about 50%- 60% of earnings. If you look at this year, pre-amortization customer contracts, which is I guess a nil sum game, they were about 57%, which is kind of in line with where we've historically paid and sort of given a good balance sheet and good cash generation. Certainly, I think we want to be a good growth stock and a good dividend paying stock. Whilst there's no set policy, sort of that 50%- 60% range is sort of where we've historically been as a company.
All right. Thanks, David. Question here on M&A and inorganic opportunities. Are there any near term or potential imminent M&A opportunities currently being assessed?
I wouldn't say sort of imminent. I mean, from our perspective, we've got significant organic opportunities in front of us over the next three to four years. If the right thing's there that sort of complements us either from a capability or a geographic perspective, we'll certainly look at it. They're probably areas, asset services, particularly on the East Coast of Australia is one area, that sort of whole monitoring, sort of inspection technology type area is another. It's of interest for us, but there's certainly not anything imminent at this point in time.
Okay. Question here on, I think we can summarize this to be potential wins and contract wins on the horizon. Are there any contract wins to look out for?
Look, I think all three operating segments of the group have really good opportunities in front of them. We expect to win all three categories over the next period. I mean, what I will also say is that the contracts that we've won, particularly in that asset services space, you're generally not operating at your optimum in the first 12 months. We certainly see opportunity there to continue to improve the profit performance of those contracts in year two. There are multiple ways that we will grow the bottom line earnings for the business.
Okay. There's a few questions here around labor, cost escalations, potential price rises, and in relation to our contracts. I guess in summary, there's a few of them around here. How are we managing access to labor and potential labor cost escalations, wage inflations, pressure, given quite a lot of commentary in the market of late?
Yeah, it's clearly been a pretty topical item in the last six to nine months in particular. I think the border restrictions aren't making it easy, but we've really shown in the last 12months-18 months that we can manage that, and manage it well from an access to labor perspective. In terms of costs and cost escalations, all our contracts have rise and fall mechanisms in them, and that gives us that level of protection. Without going into sort of too much detail, the lion's share of our contracts, the actual labor element is linked to the labor cost on that particular site. It gives very, very strong protective mechanisms. Certainly, the rise and fall mechanisms give us that protection.
Question here on international work, I guess. International work, when do you think SRG will be able to work effectively internationally again?
Look, for us, to me, we're continuing to run out certain projects internationally as we speak. For me, it's a medium-term play. We're not actively targeting new work internationally that would start in the near term. I think for me, it's a medium-term play, and it's one of the things I really like about our business is the different levers to grow this business over the next three to four years are significant. I'm not really factoring in any growth in the international side of the business in FY 2022 in our outlook. It's more a medium-term play, and I think that's one of the strengths of the business, that we are a global business. We've been operating global for more than 30 years, and the special skill base that we have has traction in the global market, particularly in that dam, bridge, and tank space.
It's one that in that medium term, when the markets open up and the risk profile is appropriate for us, then we'll start actively playing internationally again.
Probably without offending our New Zealand cousins, New Zealand is obviously part of the international, probably nearly all the international business as we speak.
Yeah
I'd probably treat New Zealand slightly different to.
Yeah
to the rest of the world.
Well, it is in the state of Australia, so that's worth. I'll consider that that way.
We do have New Zealand shareholders, Roger. Let's not upset them.
Probably one, maybe slightly unfair to present the question, but I'll ask it anyway, around share price and multiples. Around our share price rise in the last 12 months, it's a substantial rise. Where do you think we are valued as at this point in time, and what do you think the runway ahead is?
I think from our perspective, when you look at where we're trading today, it's effectively about 4x FY 2022 EBITDA. I mean, historically, SRG used to trade about 8 x. If I think of a perhaps relevant peer, like a Monadelphous, they're sort of 9-10 times EBITDA. We're at four in terms of FY 2022. I think there's a significant runway in front of us, both from the growth in earnings, but also in getting the right multiple attached to our business. Look, I'm not one here to give share price. I think it's been a fairly muted reaction to the performance today and I think for us, I'm not going to give anyone share price advice. To me, there's no way we're valued like this in 12 months' time. I think we've got huge runway in front of us.
At the end of the day, the share price will be what the share price will be. What we're focused on is running the business. That's what we've done historically, and that's what we'll do in the future. What I will say is the business has never been in a stronger position. The strategy is really clear going forward. There's huge opportunities to grow this business in multiple ways, and the scoreboard will look after itself at the appropriate point in time.
Yep. I couldn't agree more. Well, I think that covers off just about all the questions we were asked today. I know it's a busy day for everybody, might call it-
Yeah. Appreciate people taking the time to jump on the call and really looking forward to delivering what is an exciting future in front of us. Thanks for the support.