I would like to introduce today's presenters, Mr. David Macgeorge, Managing Director, and Mr. Roger Lee, CFO. I would now like to hand the conference over to Mr. David Macgeorge. Please go ahead.
Thanks, Darcy. First, I would like to welcome everyone to the full year results call for SRG Global for FY 2026. Before I start, I really would like to acknowledge our people. There will be many of you ringing in today, and I really want to acknowledge your efforts in delivering FY 2026. You continue to step up. You continue to live and breathe what we stand for: Live for the challenge; Smarter together; Never give up and Have each other’s backs . These results today are a testament to your hard work over the last 12 months. So thank you. I always like to start with a little bit about us on slide two. Who we are, what we do, and what we are trying to be.
Who we are? We are a diversified infrastructure services company, and the key word there is the diversified nature of what we do in the infrastructure space. What we do is bring an engineering mindset to deliver critical services for major industry. When I talk about engineering mindset, what I am referring to is being smart, technical, innovative, specialist in delivering what are critical services for our clients. It is not about doing the laundry, the landscaping, the catering. It is about delivering critical services for our clients, which makes us critical for them. We do that across the entire asset lifecycle of engineer, construct, and sustain. What we want to be, our vision, is the most sought after in what we do. Some might say number one, market leader.
For us, when our clients have a challenge, a problem, or an opportunity, I want the first people they think of when they pick up the phone is SRG Global and us making the complex simple for them. As we move to slide three, you can see we have two key operating segments, Maintenance & Industrial Services and Engineering & Construction. You can see the diversity of the sectors on which we play. Water, energy, resources, defense, transport, ports and marine, data centers, and health and education. So we are in a very diverse range of sectors, all with strong growth thematics in front of them. As we move to slide four, you can see the profile that we have today. We are a very different business and more than 5,000 people across more than 20 industries.
Revenues are circa AUD 1.7 billion and growing at a market cap of roughly AUD 2.5 billion. We are now an S&P/ASX 200 company. You can kind of see the geographic split, pretty evenly split between the East Coast and the West Coast of Australia, with about 5% in New Zealand. That sort of geographic presence and footprint creates significant opportunity. We move to slide five, which is the key slide of the whole deck. It is the executive summary of the results. What you are really seeing today is evidence. Evidence of us continuing to deliver and evidence of us doing everything that we said we would do. It is a record result. EBITDA of AUD 170.1 million, which is up 34% on FY 2025. EBITA of AUD 131.8 million, up 41%. We have actually exceeded our upgraded guidance that we provided in June. It is an excellent result.
It is a record result, and it translates into terrific returns for shareholders with EPS of AUD 0.138 per share, which is up 34% on FY 2025. We increased the dividend in the second half to AUD 0.04 fully franked, which is up 33% on the second half of last year. I think that is something we have done really well over the journey of really driving and funding the growth of the business, but also delivering good yield, and dividends for shareholders. Another really strong cash generation year. It continues our really strong track record over a long period of time. EBITDA to cash conversion of 101%. Really high free cash flow of just under AUD 93 million. It really continues that strong trajectory of cash generation over a long, long period of time.
Really pleased that we are back in a net cash position of AUD 6.2 million, which is from a net debt position post TAMS of AUD 52.5 million. It really does position us well for the future to keep sort of funding the growth of the business as we move into the future. We continue our really strong track record of M&A. TAMS, which was an acquisition we made during the last 12 months. It was a very strategic acquisition of a marine infrastructure services provider. Very much that full self-performing end-to-end capability, and really pleased to report that they have delivered above business case of just over 10% in the first eight months. That really continues that strong inorganic delivery that we have delivered over the journey.
Which is overlaid to the strong organic growth of the group, where organically in the last 12 months, earnings have grown close to 17% at EBITA level and just under 14% at EBITDA level. I think for us, that really key evidence over a long period of time of growing strongly organically and overlaying that with good inorganic growth where it makes sense and makes us a better business.
One thing we have done really well over the journey is winning and executing. It is something that I have been asked a lot over our journey as we have grown. Are we buying work? You can really see the really strong growth and track record of not only winning work but also delivering. We have now more than AUD 5 billion work in hand, which is up 42% on this time 12 months ago. That is sort of 80% plus of annuity recurring earnings.
What that gives us is great platform, but also visibility into the future, and with a pipeline of in excess of AUD 11 billion, which is a high-quality pipeline as well. I think one of the important messages out of today is we've delivered a record result. You've seen the evidence today of what we're doing, but we're not stopping here. Today we're upgrading our FY 2027 guidance to AUD 195 million-AUD 205 million EBITDA and AUD 150 million-AUD 160 million EBIT, which is up from AUD 190 million-AUD 200 million guidance that we gave in June of this year. What that really shows is the growth profile of the group, the confidence we have in our future, but also that forward visibility in what we see in front of us. I think that's a really, really positive message out of today.
An exceptionally strong result, but a very, very bright future in front of us about how we're going to grow, not only over the next 12 months, but over the next three to five years. We'll now delve a bit more into the financial details. I'll move over to slide seven, which cuts a bit of the financial detail of the group. Look, as you can see, on slide seven, really strong on every line. Particularly pleased with the margin percentage performance, and you're really seeing the benefits of us being very capital light business and how top line growth is translating into bottom line earnings. Really pleased with EBITA percentage margin now above 10%, which I think some further incremental opportunities to improve from there.
EBIT margins of just under 8%, and you can see from a dividends per share perspective, up 27%, which continues our long track record of continuing to grow the dividend that we're providing to shareholders and EPS growth, as I touched on earlier, of 34%. So a really strong above-market performance. Transition back to net cash, which I touched on before. I think most importantly here, it's just the fundamentals of the group really provide that platform for sustainable growth as we move into the future. In some ways, I don't feel the numbers do justice to the quality of the business we have today. This is very much a quality result, quality earnings, but the quality of the business that we're delivering and servicing our clients is high quality with blue-chip clients.
I really link that back to strategy and us delivering and doing everything that we said we would do. We've had a very clear strategy for a long period of time, and today you're seeing further evidence of us delivering against that strategy. I think the most important message from here is, as we move to slide eight, it's not just another record year for the group. It continues a very strong and long-term track record of delivery. As you can see on slide eight, a very positive trend from a visual perspective. It's just not one year. If you look at profit, EPS, dividend, very positive trends. Slide eight's very much a visual view.
For those more numerically minded, as we move to slide nine, which is probably most of the people on this call, you can really see the track record and the quality of what we've delivered over a long period of time. There is not a metric that we haven't absolutely delivered on over the last five to six years. Really, what you're seeing today is further evidence of the transformation of the company that we are today. EPS growth of circa 320% over the past five years, which is a terrific result for shareholders and a terrific shareholder return over that period as well. We've very much transitioned the business to that 80% annually occurring. It's probably a little bit higher than that now.
You can see that clear evidence of us winning but also executing well, and you can see the uplift in margin percentage performance over the long term has continued to improve and the quality with it, along with a really strong track record of cash generation over the long term. I think cash you can never look in halves or years, but you can see over a long period of time, we've delivered really strong cash- backed profit. Again, I think slide nine is just further evidence of us executing to strategy and doing everything that we said we would do. If we go into a bit more of the financial detail on slide 10, you can really see that positive cash, which is really funding our growth. As I mentioned earlier, EBITDA cash conversion of 101%.
I'd say use 80% as a good proxy for us, as you're also bouncing the growth of the company. But a really strong track record of delivery and again, another positive year from EBITDA cash conversion. Really high free cash flow, which I've touched on earlier, of just under AUD 93 million. Our CapEx at AUD 33 million, which is roughly 2% of revenue, which is very much our profile. From a maintenance capital perspective, it's roughly 2% of revenue, so very much in line with historical, and you can really see that continued strong track record of cash generation, which really translates on slide 11 to the robust financial position that we have today. We've got an exceptionally strong balance sheet, available liquidity of nearly AUD 300 million. Back to net cash, which is really positive from our perspective.
You can see we've got a lot of facilities available to keep funding the growth of the business moving forward. With the balance sheet that we have today, it gives us enormous strength, but also a lot of flexibility to really drive the growth of the business, not only organically but also inorganically into the future, which is certainly part of the strategy. I think that's the financial piece. But if we move to slide 12, there's financials, but there's also the strong foundation of the group. I would say in business, it's not the best widget, it's not the smartest strategy that drives performance. It's people, and it's culture, and it's us living and breathing what we stand for: Live for the challenge; Smarter together; Never give up and Have each other’s backs . That's what's driving our performance.
I always say to investors, that is what you are investing in. You are investing in what we live and breathe and stand for as a business. In slide 13, we touch on some of the things around ESG, and for us, it is about being very pragmatic, being very real, and how we can make a difference. Certainly from an environmental perspective, we have established now a committee at executive level for sustainability, which is really to strengthen the governance and oversight from an environmental perspective. We are ISO 14001 certified, which really is the framework on which we govern the environmental management of the group. We have fully deployed carbon platform software to enable consistent, auditable climate reporting, and we really see climate change as not a risk for the group, but an absolute opportunity.
There are also a lot of great things we are doing around materials, facilities, smarter designs around how do we make our clients' business better. The reality is, SRG, we operate on our clients' sites, and it is about us working with our clients to improve not only their business but the sustainable way that they do it. From a social perspective, really proud of the work that has been done with the Bugarrba Aboriginal joint venture. It is progressing very, very strongly.
Very well led by Angela Bennett and Jess and Gloria Wilson. We are building a special business there and really proud of what has been done to date, and it has got a very exciting future in front of it. We have now launched our Innovate RAP, which is really moving from the what to more so the pathways and the how as we move into the future.
We have increased our investment, from a graduate perspective, to now nearly 30 people, which is all around preparing ourselves for the future growth and the next level of talent coming through the group. From a social perspective, it is about how we operate in the local communities. The reality is we operate in a lot of remote regional communities, about how we are a good corporate citizen and being very much a part of that local community. From a governance perspective, we have got a zero-harm committee operating at both board, executive, business unit, and site level, which really drives the safety performance. Our TRIFR improved to 1.77. I think anything below five is a really good performance from a business. Below two is absolute industry-leading. I always say safety is the glass ball in business. You juggle a lot of balls in business.
They are all rubber, but really, safety is a glass one. It is the one that you cannot afford to drop. I do not like to celebrate it because every day is a new day, but really pleased at the performance. For me, it is about focusing on the critical risks, about what really matters. We have very much got a reporting culture about how we learn. As I have said at the start, every day is a new day. It is a glass ball, and we have to start at ground zero and focus afresh every single day. We put a lot of effort into the frontline leadership. We have had more than 350 leaders through our frontline leadership program from a safety perspective in the last 12 months.
Really proud of some of the work we are doing in the psychosocial space, which is not only an issue in business but also an issue in society. From a group systems perspective as a whole, our Project Evolve is really well embedded from a rollout perspective. Very, very well led by Andrew Bell and the team. It is all around having one platform, standardized business systems to really provide that data and insight to give good decision-making for our frontline leaders in real time. A lot of really good work we are doing in the ESG space, and I think what you are really seeing today is some really pragmatic, practical evidence of what we do in this space. We might switch gears a little bit now and move over a couple of lines to the operating segment update.
I think you can see there really strong performance across both segments and really underpinned by excellent operational execution with really consistent margins. At group level, and I think I might have touched on this at the start, but really strong performance as a group. Organically, we grew EBIT by close to 17%, organically in EBITDA, just under 14%. Then you overlay that with a contribution from TAMS from an eight-month period, which was circa 10% above business case. That is at group level. If we look at the Maintenance & Industrial Services segment, which is the largest part of the group. Again, continuing evidence of delivering step change growth with really consistent industry-leading margins. I touched on the TAMS performance above business case and now fully integrated into the group, and I will talk to that a bit more later on in the presentation.
For an Engineering & Construction business, again, a really strong performance. Really, really excellent execution and really underpinned by the early contractor engagement model, which gives us that upfront insight, visibility, input, and contribution to enable us to execute with certainty. From a corporate perspective, very much aligned with historicals of low 2%. We continue to invest in the things that matter to keep scaling the business to be able to deliver into the future, but run at a very, very prudent level where we value where we spend our money. We delve into each of the segments, firstly starting with Maintenance & Industrial Services on slide 16. You can see the diverse range of services on which we provide. I think if there is a couple of key takeaways on slide 16, it is the quality of the client base.
You can see a very, very blue-chip client base on which we service. It is also the diversity of the sectors and the industries on which we play in. As we move to slide 17, the operating segment update for the year in review. Again, excellent performance and that continued track record of step- change growth. We have secured a number of long-term contracts in the last 12 months, which really does position us for the future. I won't call out each individual contract or client, but you can really see the quality of the client base that we are dealing with and value what we provide. Very, very well now spread out geographically across all of Australia and New Zealand. We are across a diverse range of sectors where we can apply our skills. The successful acquisition of TAMS integration, I will touch on that a bit more.
A lot of really strong growth opportunities as we move into the future, particularly in water, transport, resources, ports and marine, and the energy space, which are all good, strong growth thematics for SRG Global. On slide 18, which is the Engineering & Construction segment, I think again, you can see the core services that we provide, and it is very much that specialist model, early contractor engagement. Again, a couple of key takeaways is, again, the quality of clients that we have, both in public and private land, an absolute blue-chip client base. Most important message, these are all repeat clients. We do not call this recurring earnings, but the reality is all the clients we are dealing with are repeat clients where the commercial model is well established. We are providing early contractor engagement and input, and they are valuing the services on which we provide.
As we move to slide 19, which is the year in review. Again, really strong evidence of strong performance and excellent execution. Really good evidence of execution delivery in the specialist water infrastructure space, particularly in the dam anchoring, mega tank, and water infrastructure space across Australia. Really good evidence of winning and executing in transport, defense, and renewables, which are all good growth thematics. Now, a specialist facades business, an absolute market leader in the space across Australia and New Zealand, primarily playing in health, education, and data centers with key clients. All good, strong growth thematics, particularly in the health and data center areas. The most important piece, which I have really touched on already, is that robust commercial framework. That early contractor engagement model with blue-chip clients, commercial model well-established, early engagement and input around designs, pricing, execution.
You can then lock in the work early and then execute with certainty, which is something that we highly value. Basically, all our work in this space is that early contractor engagement model. I will touch on now TAMS as we move a couple of slides to slide 21. It does feel like TAMS has been in the family for four or five years. The reality is it has only been since November. This was a very strategic acquisition of a market leader in the specialist marine infrastructure space. We completed it at the start of November. It is now fully integrated into the group from a business systems and process perspective. I think most pleasingly for me, it has exceeded business case, in the first eight months, about 11% above business case. But the most important piece for me, it has been an excellent start culturally.
These things generally succeed or fail based on culture, and I spent all my first 12 months very much on the cultural integration of the group. It is exceptionally well led by Abe Faulkner and the team, and that cultural alignment is very strong. There are a lot of really positive opportunities, both in the near term but also the medium term, not just for TAMS as a standalone business, but as part of the broader group. It has been an excellent acquisition for us. I am really proud and pleased to have TAMS as part of the SRG Global family. Which is a great segue into the way forward and the future as we move a couple of slides further to slide 23.
You see, we've had a very clear strategy for a long period of time, and today you're seeing further evidence of us continuing to deliver and execute against that strategy. I almost feel boring putting up this slide. I think I've been putting up this slide now for more than eight years, but it's probably one of the real strengths of us as a company. We've had a very clear strategy for a long period of time. We've been very disciplined and focused in delivering against that strategy. We're very clear on what we want to be, but also very clear on what we don't want to be. I think that keeping that strategy simple and executing against that with absolute discipline and focus has been the hallmark of our success. The growth phase is now very much morphing into the leadership phase.
We want to be a zero-harm leader and a place that people want to work, and clients want to partner with us. We continue to enhance both innovation and technology to drive sustainable growth and competitive advantage. The reality is we have a lot of in-house software and capability, in SRG Global. I very much see innovation technology as the enabler to execute work and give ourselves a point of difference with our clients that they value. But we have a lot of technology and software within the group. A lot of smart things we're doing around AI, which is really about driving productivity, giving us good insight, data, and reporting to make good decisions.
The reality is, leaders, particularly on the front line, having that data and insight to make good decisions is where really I see AI will continue to make a very strong difference for us as a group. We'll continue to make selective strategic acquisitions that either complement our capability or our footprint. The reality is we've got very strong organic growth profile in front of it, and we will overlay that with inorganic opportunities where they make sense. We've got a very good track record of not only buying really good companies with high value for shareholders, but also integrating and enhancing those companies, but also those companies enhancing us. That trend will continue. We'll keep delivering consistent above-market returns for shareholders.
I touched on at the start, EPS growth of over 320% in the last five years, with extremely high total shareholder return over the same period. Underpinning that's that kind of 80% annuity- occurring profile. The reality is it's probably a little bit higher than that at this point in time. It's not meant to be an exact figure, but what it's all about is having that underpinning foundational earnings, visibility, and platform to be very selective and targeted on all that win and do elements where we have really strong points of difference. So the strategy is clear. The strategy's not changing. You're seeing a very clear evidence of executing against that strategy, and that will continue, which really provides that platform for sustainable growth. You can really see evidence today, again, of that strategic transformation.
We have a terrific platform into the future, and it's about now continuing to leverage the footprint that we now have with the diverse services we can offer to clients that we play with today. We've got more than AUD 5 billion work in hand, more than AUD 11 billion from an opportunity pipeline perspective. Again, today we're upgrading our guidance for 2027. You can really see what that means for the business and that track record of continuing to grow the business into the future, which is a good segue on slide 25 to the positive momentum of the group. Today we're upgrading our FY 2027 guidance, which should provide confidence of the visibility and the momentum in the group. Got more than AUD 5 billion work in hand and an AUD +11 billion pipeline of opportunities.
Positive exposure to a lot of good growth sectors, including water, energy, resources, transport, defense, health, education, data centers, and ports and marine, which really show the diverse sectors on which we play. All have really strong growth tailwinds in front of them. That earnings profile of 80% annuity recurring, which gives that visibility, confidence, and certainty into the future. That strategic transformation to a diversified infrastructure services company will continue to deliver really consistent growth. I think most importantly, high-quality returns. One of the key messages out of today, yes, it's a record result. It's an exceptionally strong result on all metrics.
It's the quality that sits behind it, the quality of the numbers, the quality of the services we provide, the quality of the sectors that we play in, and most importantly, the quality of the people that are delivering the services that SRG provides, which is a great segue into the investment proposition on slide 26 of SRG Global, which is basically the reason we're all here. We have full end-to-end asset lifecycle capability where we self-perform everything that we do. We play across diverse market sectors and geographies. I say that gives us a natural hedge. They're not reliant on one client, one sector, one geography on which to apply our skills. We have a very broad platform on where we can play and where we can grow.
We have a highly scalable business model from an experience, a systems, and a structure perspective, and you're really seeing today, again, further evidence of us scaling the business, improving the business, driving the quality of the business. A high- level of annuity earnings profile, which really brings that not only predictability and consistency, but also the forward visibility of how we'll continue to grow the business into the future. A very capital-light investment profile with CapEx circa 2% of revenue, and a really high- growth dividend-paying stock. I think that's something we've done very well over the journey in terms of balancing not only the growth of the business, but also the dividends and returns to shareholders. I really want to thank the shareholders today for your support over the last 12 months. I want to give you reassurance. We're not patting ourselves on the back today.
It's a really strong result. It's a result that our people are very, very proud of. But we're back to work now. It's about delivering a really high-quality result in FY 2027 and beyond. And finally, I again want to thank our people. You keep stepping up. You keep living for the challenge. You keep being smarter together. You never give up, and you have each other's backs. I can't thank you enough for your performance and the result that I've got the privilege to deliver today, and we're well on the way to being the company that I know we can be. So thank you.
That's awesome, David. Thank you for that presentation. We'll now go into Q&A. And again, for those of you that haven't put in questions as you wish to, please feel free to do so. And I'll just start from the very top. So the first one's from Max Andrews, Unified Capital. Max , "Well done, guys. Can you talk to the organic growth in the second half looking like that has picked up materially and unpack some of the drivers behind this? And second part, expectations onto TAMS for FY 2027 and expectations on earn-outs."
Look, I think Max, really strong performance organically over the second half. We're generally a 45/55 split business, and some of the work we pick up early translates into the second half of the year. So I think that's something that's really across the board from an organic perspective, pretty consistent between both Engineering & Construction and Maintenance & Industrial Services, and we expect that to continue. From a TAMS perspective, certainly coming into FY 2027, it'll grow at least in line with the profile of the rest of the group. The reality is they do have some good near-term and medium-term opportunities. So we'll see how those play out over the next 12 months to 15 months from an earn-out perspective. It will grow strongly into 2027.
Okay. Yeah. Excellent. Next one's from Brett Westbury. "Thanks for your outstanding work. I understand it must be immaterial, but could you please comment on the EQ West receivable?" I'll take this one, David. So yes, no, it is clearly immaterial. I can comment to say that the matter's been settled with no financial impact to the group, so it is now dealt with and in the past. The next one is from Joseph House. "Hi, team. Congrats on a solid financial update. Are you able to give us a sense of how the Diona business performed in the second half and how your thinking is about its growth rate in FY 2027 relative to 2026? Understandably, we've seen a lot of new contracts for Diona. Is it reasonable to assume the run rate is higher in FY 2027?"
We'll have to wash the mouth out with soap, Joseph, in terms of very much our utilities business today, not Diona. It's had a really strong 2026. I mean, the reality is SRG Global's historical business has been very strong in water. [inaudible] certainly added to the water thematic. For us, it is now the largest sector within the group. It's had a very strong FY 2026, and we'll continue to see that translate into FY 2027, particularly some of the things that we've picked up in government land about those long-term programs and how we execute against those. So it will be a strong performance in 2027, but very much in line with how the rest of the group performs. I mean, the reality is the growth profile across the entire group in the different sectors we play in, it will all grow pretty consistently.
Clearly, just to add on that too, the commercial framework that utilities brings into the SRG group, which is through the long-term government contracts, is significant for us. Again, speaks to the quality of the business as well. Next one again from Joseph. "Can you provide any color on your M&A pipeline? Any advanced discussions?" Yeah.
Well, I think from an M&A perspective, there's certainly things that we continue to assess. My largest focus is primarily on driving the organic growth of the group and then inorganic where it makes sense. So there's certainly things that we continue to assess, and I think one of the positive pieces of our business, we've got a really strong track record of M&A, but we have a very strong track record of organic growth within the group. The best M&A happens generally when you don't need it. There's certainly things that may enhance our group as a whole, but there's nothing that we want to call out today.
Yep. Next one's from Amanda Kelly from Barrenjoey. "Hi, team. Wondering if you can help us understand how you're thinking about the visibility of E&C pipeline for 2027 and how you might see the phasing of that playing out across the year and any sector mix changes or trends you're seeing in your book."
Look, I think as a group, it's generally a 45/55 split first half, second half holistically. It might be a smidge higher than that in the FY 2027 year. I think from an E&C perspective, really positive opportunities across the board, primarily in water, transport, defense, resources, health, and data centers, are probably the primary areas where we see good opportunity across the board. I certainly think, one of the great things that I touched on earlier, that we've kind of got a natural hedge, is we're not relying on any one individual sector. We can grow a lot of different ways, which is pretty powerful from an E&C perspective, where it's very much a win -and -do piece.
There's a lot of different, diverse opportunities we have in front of us, but we're not relying on any one individual project or sector to sort of deliver the earnings growth profile into the future.
Yeah. No, fully agree with that one. Next one also from Amanda Kelly. "Some of these you might have covered off there, but I'll go through it anyway. Just on TAMS, interested to understand the opportunities that might play out for the business this year and the potential you see for margin expansion."
Look, there's some good near-term opportunities and some medium-term ones for TAMS. I mean, Abe and the team have delivered a really strong first eight months. We see that opportunity FY 2027 only increasing from here. I won't sort of call out individual opportunities. From a commercial perspective, I view that as slightly sensitive. But there are some good opportunities. I think margin expansion, probably, I think TAMS' margin performance will be very consistent with where it's historically been. Probably from a group perspective, that we see some opportunities for some incremental margin improvement at EBITDA and EBITA level over the course of FY 2027.
Hmm. Clearly, TAMS' margins are industry-leading.
Yeah, absolutely.
For sure. One from Joseph. Again, your Engineering & Construction segment EBITDA margins were a lot stronger in the second half than first half. Shall we attribute this relative performance to mix of projects delivered or contingencies or, yeah?"
Look, I think we're generally at a 45/55 first half, second half. It's probably more just the timing of different projects. I think there's nothing out of the ordinary from an E&C perspective. I can't quite recall, but I'm pretty sure I might've mentioned it the first half that E&C would be stronger in the second half, and we've really seen that play out.
Perfect. Next one's from Nick Rollinson from Morgans. Organic EBITA growth was up nearly 20% in the second half. I don't have the numbers on hand, but does it feel the company's in the strongest position from an organic growth position as you head into 2027 and beyond? Then the next one's TAMS won its first E&C award in June. Have you won any further E&C awards in TAMS, and what's the tender pipeline look like generally?
Look, I think, if we touch on the first question about the strength of the company. The company's in exceptionally strong position, and the reality is organically we'll continue to grow into 2027, and you're sort of seeing that through the guidance that I've provided. I think, for others to decide, is it the strongest position we've been in? Certainly from my personal perspective, I believe that is the case. The reality is we're growing, and we're compounding. So we're growing from a higher base, again and again. You're seeing further evidence of that in 2026, but also coming forward into 2027. Now, from a TAMS perspective, yeah, we did have its first E&C win in June with BCI Minerals. There are some reasonably positive near and medium-term opportunities in the space.
I think the TAMS business has got some positive things in front of it, but also is executing what is a high-quality scale business from a maintenance perspective as well.
For sure. Next one's from Gavin Allen from Euroz Hartleys. Quick one from me. Team TAMS circa 10% above budget. Was this via stronger -than -expected maintenance works or did you see an increase in project works of both?
It's really more from a maintenance perspective. The translation of E&C will most probably kick in a little bit more in FY 2027.
Next one's from Nick Rollinson. Again, organic EBITA-
I think we've touched on that one.
Y eah. Okay, that one's done. One from John Anderson, long-term shareholder. Great result and great future. Thank you very much to the SRG team from a long-term investor. Yeah, very much appreciate that comment, John. Thank you. One from Phil Pepe from Shaw. Great result, guys. Second half 2026 EBITDA of AUD 99 million makes your FY 2027 EBITDA guidance look conservative, given the usual one- half, second-half split. Can you elaborate on the factors affecting the guidance range, please?
Yeah, look, we're generally a 45/55 first- half, second-half split, so the second-half result is generally not always the way to think about coming into the following year. The reality is we're in a great position. Guidance of AUD 195 million- AUD 205 million. Look, really, I think the key swing factor is kind of going to be less around what's locked in and what's visible. It's more about timing of when certain things are spent.
Yeah. One from Matt Chen from Moelis. Thanks, Matthew, for your question. Morning, guys. Well done. Just on the cash conversion. Anything to call out on the strong FY 2026 cash conversion?
Look, nothing out of the ordinary. Look, I always say use 80% as a good proxy from a cash perspective. We've got a really, really good track record of delivering cash back profit, and we expect that to continue. The reality is it's not going to be 100% every single year. I think 80 is a very, very good proxy to hold against this.
This one's for you too, David. The one from Albert Landman, obviously a private investor. Having been invested with a client and managed accounts since 2020 and start of turnaround when AUD 0.5 dividend kicked in, you have not failed to deliver sustainable growth through every reporting period. Curious how you maintain the rage and the discipline when the potential for hubris and resting on laurels is a human nature default after such a successful period.
Well, I think to me, Albert, it's a really good point and one that, when I talk about what we stand for: Live for the challenge; Smarter together; Never give up and Have each other’s backs . These are not words on a wall or on a page. That's how we live and drive our performance. I think that's something that I'm really conscious of as we've got bigger. To really focus on what matters. The reality is, you get bigger, there can be a lot of peripheral initiatives that you can focus on. For us, it's about maintaining that discipline, about really focusing on what matters. For us, this is not a one, two, three-year horizon. We've seen evidence over six or seven years. The reality, Roger and I started in 2014. We're a AUD 30 million market cap with a few hundred people.
I can assure you that we'll be disciplined and focused as we deliver into the future. You'll keep seeing evidence of that. It's really about us living and breathing our culture. We take it seriously. I'm very real when I say that's what's driving our performance, because it is.
Yeah. All right. Thanks everyone for your questions. Sorry, one more has just popped in. From DFDSF: What are the barriers to entry in winning more defense work? Do you expect this to drive organic growth higher in 2027 and beyond?
Look, it's interesting in defense. It's one that's very much a medium-term play. For us, my experience tends to be that it just tends to get pushed to the right. It's probably one of a number of different sectors we play in, of which we can continue to grow from. The reality is our probably near-term opportunities are in other spaces. We play well in defense. I don't see a material uplift in FY 2027. I sort of see it more as probably an FY 2029, FY 2030 story. The reality is we're ready. We've got the footprint and, when the real spends come, we've hopefully got a position that we've got a point of difference where we can play.
Mm-hmm. One more has just popped in as well. From David Funaro SRG has achieved impressive growth while improving margins. As the business continues to scale, what do you see the biggest challenge is to maintain that performance and how can people on projects like us help address it?
Look, I think from our perspective, from a margin, you have really seen over the journey, we have got industry-leading margin that they have continued to expand from a quality and a financial perspective. Certainly, some of the great work we are doing in terms of insights and data to provide real-time data to make good decisions. I think through AI and other things will only help the decision-making moving forward. It then comes down to people and leadership. You can have all the information, all the data, all the metrics, but it is really driven by leadership. We put a lot of effort into our leadership, particularly at the front line. To me, it is about culture. That is really how it is going to keep driving the performance.
The reality is I spend most of my time in thinking on how do we keep enhancing, maintaining, improving, the culture that we have, and we take it seriously. Because that is what drives the performance.
Mm. Clearly someone like yourself, Dave, who works on a project for us, you care for us, you care for the project, you own your stuff. All I can say as well, reiterate what David is saying, is that keep doing what you are doing, which is keep owning your stuff and through that ownership is where the company improves and performs. That is the end of our questions. Thank you everyone for joining the call. We will call it an end.
Thank you.
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