SKS Technologies Group (ASX: SKS) Profit Nearly Doubles

SKS Technologies Group reported a 93.2% increase in FY26 net profit as data-centre demand lifted revenue and margins. The electrical technologies contractor also forecast another sharp expansion in FY27.

Sales revenue climbed 33.0% to $347.93 million, while profit after tax reached $27.11 million. Profit before tax rose 89.3% to $39.35 million, and earnings per share increased 91.2% to 23.45 cents.

The board declared a 6.5-cent final dividend. That lifted the full-year distribution to 10 cents per share, up 66.7% from FY25.

Data Centres Lift Earnings

Data-centre revenue increased 47.6% to $207.70 million and accounted for almost 60% of annual sales. Revenue from SKS’s traditional markets grew 16.0% to $140.30 million, providing a second source of expansion.

Those traditional sectors include corporate, government, defence, education, aged care and healthcare projects. SKS designs and installs electrical systems, communications infrastructure and audiovisual technology across Australia.

Operating leverage was evident in the results. Total expenses increased 28.2%, below the 33.0% rise in revenue.

Earnings before interest, tax, depreciation and amortisation rose 80.8% to $42.43 million. The profit-before-tax margin expanded to 11.2% from 8.0% a year earlier. It reached 12.3% in the second half, compared with 9.7% in the first half.

Contracted Work Builds Visibility

Work on hand increased 56% during FY26 to $312 million at June 30. The tender pipeline stood at $1.69 billion, with about 87% linked to data-centre opportunities.

The order book includes SKS’s largest contract to date. The $210 million project covers critical electrical systems and infrastructure for a hyperscale data centre in Melbourne.

SKS also completed the acquisition and integration of Delta Elcom. The transaction added a New South Wales operating presence and data-centre infrastructure expertise.

Meanwhile, a new 6,200-square-metre facility in Melbourne will serve as the Victorian major-projects headquarters. It will support engineering, design, off-site prefabrication, deployment and commissioning.

Cash Funds Expansion and Dividends

Operating cash flow increased 30.5% to $45.66 million. However, net cash flow fell 41.2% to $17.13 million, partly reflecting the $10.88 million cash component of Delta Elcom’s purchase.

Year-end cash increased 52.7% to $49.60 million. SKS also expanded its bank facilities by 62.5% to $52 million, adding funding capacity for growth.

The company recorded zero lost-time injuries despite a 22.7% increase in its workforce. Productive hours rose 32.1% during the year.

FY27 Targets Another Step-Up

The board expects FY27 sales revenue of approximately $500 million and profit before tax of $60 million. Those targets imply continued growth from both the contracted order book and broader project pipeline.

The outlook rests particularly on sustained data-centre demand. It also assumes continued activity across SKS’s more established end markets.

The Business at a Glance

SKS specialises in designing and installing electrical technologies and digital infrastructure across Australia. Its services cover audiovisual, communications and electrical solutions for data centres, defence, mining, health, retail and commercial buildings.