SRG shares up on FY21 forecast

Shares in SRG Global closed up nearly 30 per cent today after the company forecast strong 2021 financials and brought forward its previously-deferred interim dividend.

SRG expects underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the 2020 financial year to be between $20 million and $21 million – down from the previously forecast $30-$34 million, as per the company’s half-year results.

SRG, however, said its FY21 earnings was expected to grow by around 50 per cent on FY20 EBITDA.

The company as a result has brought forward its fully franked interim dividend of 5 cents per share (previously deferred to October) back to July 30.

SRG said it had withstood challenging market conditions as a result of COVID-19, and was “well positioned for long-term sustainable growth”.

Managing director David Macgeorge said the company had implemented a range of safety, supply chain and cost mitigation measures to manage the company.

“COVID-19 came at a very challenging time as we were starting to build strategic momentum in the business,” Mr Macgeorge said.

“The uncertainty caused by COVID-19 made us reflect on what we needed to focus on in the future.

“We have now simplified the business, changed the way that we operate and reduced the fixed cost base, fast tracked what we were not going to do moving forward and focused on core business, core clients and core geographies.”

Mr Macgeorge said SRG had a strong pipeline of opportunities in excess of $6 billion, including government infrastructure projects.

“This has us well positioned for long-term sustainable growth,” he said.

The company says its current work in hand stands at $707 million, with near-term contracts in asset services, specialist civil and specialist facades services.

Shares in SRG closed up 29 per cent to trade at 24 cents.

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