The Service Stream Limited (ASX: SSM) share price will be on watch on Wednesday following the release of its results for FY 2019.
How did Service Stream perform in FY 2019?
The leading essential network services company reported a strong full year result which revealed further significant growth across all key profitability metrics and the first-time contribution from its recently acquired Comdain Infrastructure business.
For the 12 months ended June 30, Service Stream reported a 35% increase in revenue to $852.2 million and a 41% jump in EBITDA to $93.3 million.
Adjusted net profit after tax came in 39% higher than the prior corresponding period and earnings per share rose 33% to 15.14 cents.
Management advised that this strong result was driven by continued growth in demand for its services and the Comdain Infrastructure business contributing to earnings following its acquisition in January 2019.
The acquisition of the Comdain Infrastructure business led to Utilities segment revenue more than doubling to $273.4 million.
This strong growth was supported by a robust performance by its key Telecommunications segment. It grew revenue by approximately 10% to $587.8 million in FY 2019 thanks partly to contracts with the nbn.
Service Stream's managing director, Leigh Mackender, said: "The past 12 months have been transformative for Service Stream with the successful acquisition and integration of the Comdain Infrastructure business, adding diversity and scale into the core business whose financial performance has continued to perform strongly on the back of maintaining a relentless focus on the basics of safety, service delivery, operating disciplines and sound financial management."
Looking ahead, no real guidance was given, but Mr Mackender advised that the company "is focussed on delivering further revenue and profit growth in FY20, subject to a continuation of prevailing market conditions."
Given its strong result and positive outlook, I feel Service Stream could be a good alternative to Superloop Ltd (ASX: SLC) and Speedcast International Ltd (ASX: SDA).
